(Bloomberg) — Hedge fund managers including Diego Megia and famed short seller Carson Block pitched investment ideas at the Sohn conference in London Wednesday as the industry gears up to navigate a new investment landscape brought on by the re-election of Donald Trump as US President.
More than a dozen money managers spoke, presenting a diverse range of investment ideas at the event — from activist campaigns, short wagers and long bets on companies they expect to do well.
Here were the key takeaways:
Envestra Capital
Ali Benzakour, chief investment officer of Envestra Capital, pitched a long bet on utility company Pennon Group Plc. He noted the UK water regulator Ofwat will publish its final proposal for price controls on Dec. 19, which he believes will remove uncertainty for the sector and boost the stock.
CIAM
CIAM’s co-founder Anne-Sophie d’Andlau said her hedge fund plans to vote against Vivendi SE’s spinoff plans at the firm’s shareholder meeting next month. She said she doesn’t agree with French billionaire Vincent Bolloré plans for breaking up his sprawling media and entertainment empire, which include listing the Canal+ broadcasting business on the London Stock Exchange and the Havas advertising agency in Amsterdam.
Muddy Waters
Short seller Carson Block, the chief executive officer of Muddy Waters Capital, said he’s shorting the shares of cosmetics brand Elf Beauty Inc. because he has concerns linked to the Oakland, California-based firm’s revenue.
Shares of the company fell as much as 16% after he unveiled the wager. A representative for the beauty company did not immediately respond to a request for comment.
Islander Capital
David Semenza, co-founder of Islander Capital Partners, pitched a long bet on Spotify Technology SA saying the streaming company is in a position to continue to raise prices, which he said will boost margins higher than many investors expect. Spotify is now his firm’s biggest holding, Semenza said.
Taula Capital
Diego Megia, the chief investment officer of Taula Capital Management, threw his weight behind the market for EU bonds, noting the debt looks cheap compared to similarly rated sovereigns.
His comments come after the region’s joint-debt issuance program has faced setbacks recently: The EU had been lobbying index providers to reclassify the securities as sovereign debt, a move they argue will bolster their appeal, but MSCI and ICE have both rejected the proposal.
Megia started his new hedge fund with $5 billion earlier this year, with as much as $3 billion of the capital raised from Millennium Management.
High Ground Investment Management
Edgar Allen, founder of High Ground Investment Management, pitched a short bet against the Canadian air-cargo shipper Cargojet Inc. He argued that the company has an aging fleet and noted the firm trades at a relatively higher valuation than its peers.
A representative for Cargojet rejected the assessment, saying Allen doesn’t understand its business and that it has maintained its aircraft engines routinely. Regarding the valuation, the spokesperson said the firm has no direct peers.
Lancaster Investment Management
James Hanbury, a portfolio manager at Lancaster Investment Management, pitched his long thesis on Ubisoft Entertainment SA, sending shares of the video game maker up as much as 3.6% on Wednesday.
Hanbury noted that Ubisoft has been focused on cutting costs and believes that work, combined with non-core asset sales, should improve the company’s outlook. The stock ultimately pared the earlier gains and traded down.
Gatemore Capital
Liad Meidar, Gatemore Capital Management, said the market research and data analytics firm YouGov plc should run a sale process after its stock plummeted 62% this year. The activist investor believes the stock slump is partly due to mishandled communications with investors.
“Urgent actions are needed now to help the company chart a path towards realizing its intrinsic value,” Gatemore said in a separate statement.
White Creek Capital
Malte Heininger, the chief investment officer of White Creek Capital, is shorting the Swedish commercial real estate firm Sagax, citing concerns around the company’s valuation, operations, balance sheet and governance.
Sagax didn’t immediately respond to Bloomberg News’s request for comment.
Amati Global Investors
Amati Global Investors’s Mikhail Zverev tipped buying Bruker Corp., saying the company is a leader in the post-genomic life sciences industry and is profitable despite heavy investment in research and development.
“It’s a real business not a science project,” Zverev said.
BlueDrive Global
Oscar Hattink, the founder of BlueDrive Global Investors, pitched his long bet on the potato processor Lamb Weston Holdings Inc., which he believes will benefit from price increases in the coming years.
Lamb Weston was spun out of ConAgra Foods Inc. about eight years ago. Shares of the company have slumped about 30% this year as the company struggled with a drop in demand for its goods.
North Rock Capital
Stephen Shields, a portfolio manager at North Rock Capital, said he believes shares in the packaging behemoth Smurfit WestRock could double as executives focus on “value over volume” shutter older mills.
Shields believes the firm is also poised to benefit from price increases in North America. The company — which provides everything from corrugated storage boxes to beer carriers and e-commerce shipping materials — was created from a merger of Smurfit Kappa Group and WestRock earlier this year.
Granular Capital
Thiago Mordehachvili, the founder of Granular Capital, said Borr Drilling’s share price could quadruple as global oil demand remains strong. Borr is the “best operator in the industry,” the money manager said.
Mordehachvili founded Granular Capital, which already owns roughly 18% of Borr Drilling, in 2018 and previously was a partner at Dynamo Capital.
Bluebox Asset Management
William de Gale, co-founder of BlueBox Asset Management, said he “would leave a big chunk” of money in Lam Research, one of the biggest suppliers of equipment to the technology industry.
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