New York Value Investing Congress 2008 Day 1: Part II
Bill Ackman, Pershing Square, LP
Hedge Fund legend Ackman laid out an interesting case for Wachovia. While many investors may believe that this company is dead money, Ackman suggested that there’s a lot more to Wachovia than meets the eye.
Ackman’s analysis broke Wachovia into several parts, and put a valuation range on each part. Ackman’s analysis was thought provoking, and well constructed. When all was said and done, Ackman came up with a total value for Wachovia shares of between $7 and $19 per share.
Ackman’s sum of the parts valuation was intriguing. Of course, Wachovia’s fate is still up in the air between Citi’s initial bid and Wells Fargo’s subsequent offer, but Ackman, for one has purchased a lot of Wachovia shares—180 million in recent weeks, and currently owns about 8%.
Atticus Lowe and Lance Helfert , West Coast Asset Management
Lowe and Helfert run very concentrated portfolios, and look for: Margin of safety, catalyst, management quality and strong cashflow.
Lowe and Helfert also espoused the following
- Prioritize the margin of safety—i.e., what’s the worst that can happen?
- Base investment decisions on what you see, not on what you hear
- Good ideas are hard to come by, so bet big when the odds are in your favor
One of Lowe and Helfert’s ideas was energy company ATP Oil and Gas (ATP)
- $475 million mkt cap
- Enterprise Value: $1.8 billion
- Selling off $600 million in assets
- Estimated 2009 CF: $700 million
- Oil: 200 million barrels
- Currently trading at $12.50, could be worth $75-$88
Jonathan Heller, CFA
Disclaimer: I have no positions in any of the companies mentioned