Here are the top investment ideas out of the Sohn conference, including an e-commerce play
The 2024 Sohn Investment Conference took place in New York took place Wednesday, with a slew of hedge fund managers highlighting their top ideas. Among the stocks mentioned are an e-commerce platform, a semiconductor name and a chemicals company out of Europe. The event also features ideas from rising stars within the hedge fund industry. It also included the Sohn “Idea Contest Winner.” Here are some of the top picks mentioned: Vijay Shilpiekandula, Duquesne Family Office Investment Idea: ASML Vijay Shilpiekandula of Duquesne Family Office, who was named the Sohn Idea Contest Winner, presented ASML as his best stock idea. The Dutch semiconductor company is an “R & D powerhouse” and “high-quality business” that looks attractive on a growth-adjusted basis compared to peers, the investor said. A future potential catalyst he’s looking forward to is ASML’s investor day on April 17, where Shilpiekandula expects management commentary about opportunities in high-bandwidth memory and generative AI. “What I find like good opportunity for investors in the market to think about right now is to be creative about the long-term capacities and the long-term earnings potential of this company based on this gold rush that all these memory makers and large language models are chasing,” Shilpiekandula said. Shares of ASML are up 29.5% this year. The company beat fourth-quarter revenue and profit expectations, but said its revenue for this year will be similar to that of 2023. Jesse Cohn, Elliott Investment Management Investment Idea: Etsy E-commerce platform Etsy is an undervalued company, according to Elliott Investment Management managing partner Jesse Cohn. His firm owns over 10% of outstanding shares, which he said has a “really good business model” as it has proved to be highly profitable and extremely cash-generative. While he maintains that Etsy is a durable business, he noted that Etsy has meaningfully underperformed the broader market, as the company has lost 19.6% year to date due to ongoing macroeconomic struggles in consumer spending since the Covid pandemic. That should be an opportunity for investment, according to the activist investor, however. Etsy “trades in-line now with load and no growth peers across internet, e-commerce and traditional retail,” Cohn said. “On a cash flow basis, it trades at a discount to Bath & Body Works, Gap. … It’s relatively early in its operational and monetization process.” Seth Fischer, Oasis Management Investment Idea: Kao There’s an underappreciated buying opportunity in Japanese global chemicals company Kao, according to Seth Fischer, founder and CIO at Oasis Management. Kao, the company behind Biore, Curel and other cosmetics brands, has an attractive portfolio of products that have yet to realize their full potential, Fischer said. This can be changed with more global marketing initiatives, he noted. The Japanese stock is flat on the year, even as the Nikkei 225 is higher by more than 17% as the Japanese index scaled fresh all-time highs this year. “They have great technology, many interesting products, but they have yet to translate that into any sort of growth mindset,” Fischer said. “But we think it’s a Sleeping Beauty.” David Einhorn, Greenlight Capital Investment Investment idea: Solvay Greenlight’s David Einhorn unveiled Solvay as his top investment idea , saying the European chemicals company is a market leader with an attractive valuation. “Solvay is an essential chemical company that holds the number one position across all of its markets” Einhorn said. “While all of these are thought of as commodity businesses, they are higher margin and much more stable than most commodity chemical businesses.” Solvay shares are down more than 3% year to date. Over the past year, they have tumbled more than 70%. Michael Buckley, Duquesne Family Office Investment idea: Natera Natera, a medical diagnostics company, could have huge upside based on the strength of its oncology business, according to Michael Buckley, portfolio manager at Duquesne Family Office. Natera shares are higher by more than 47% this year. Buckley said the firm’s oncology segment, which he said has the potential to detect cancer earlier in patients than has a CT scan, can drive the company’s revenues going forward. Currently, two-thirds of the company’s revenue comes from its women’s health business, he said. What’s more, he expects that the company will be able to reach profitability sooner than the Street currently anticipates. “Not only is it an exciting stock with incredible growth potential, but it’s one of the few healthcare companies that can both dramatically improve patient outcomes while lowering total system costs,” he said. Mohammed Anjarwala, Advent Global Opportunities Investment Idea: Carpenter Technology Carpenter Technology is an underappreciated business in the aerospace industry that can also be a play on the backlog of planes from Boeing and Airbus, said Mohammed Anjarwala, managing director at Advent Global Opportunities. “We think Carpenter is one of the best ways to play the growing backlog of planes at Boeing and Airbus, as they ramp up their billing rates,” Anjarwala said. Carpenter is a leading supplier of specialty alloys for the aerospace industry, a market with high barriers to entry given stringent testing requirements for parts, Anjarwala noted. The investor said Carpenter, one of just three suppliers, has cornered roughly 40% of the market. What’s more, the company can benefit from the rise in travel as global incomes rise. The managing director expects the stock could trade at $200 per share, or 20 times forward P/E, around the same level of its peers. Currently, it trades a little above $70 per share, roughly at a 17 times forward P/E. The stock is up by 3.6% this year. They jumped 3% on Wednesday.
