Value Investing Congress Blog

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

At the 3rd Annual New York Value Investing Congress on Wednesday, Bill Ackman announced that he expects the holding companies of MBIA and Ambac Financial to fail as soon as next year. Further more, he stated that he will donate the hundreds of millions which he expects to earn from those short positions to charity.  You can view Bill Ackman’s presentation at pershingsquare.valueinvestingcongress.com .

Bill Ackman, one of America’s best-known activist investors, will be speaking at our Value Investing Congress at Time Warner Center in New York on Wednesday, November 28. Bill’s done a great service to the investing public while making outsized returns for his investors by pushing corporate managers to behave in ways that build shareholder value. For several years, Bill has been studying financial guarantors such as MBIA and Ambac, who insure municipal bonds, mortgages and other financial instruments. Though he is keeping a tight lid on his remarks before the upcoming Congress, his presentation earlier this year at the Ira Sohn Investing Conference, “Who’s Holding the Bag?” could very well be a small taste of what’s to come.

At the first New York Value Investing Congress, his presentation on McDonald’s impacted the market significantly, and many investors profited from his intervention (I certainly did!). Bill has told us that his upcoming presentation at the 2007 Value Investing Congress next week will be one of the boldest public statements he’s ever made and will have significant market-moving implications. There are still a few seats left so if you would like to register please visit www.ValueInvestingCongress.com.

Bill has been kind enough to share his presentation from the Ira Sohn Investing Conference with us. To read it now, click here. I hope you find this as worthwhile as I did. I’d love to hear your thoughts.

John L. Schwartz, MD
CEO
Schwartz Tilson Information, Inc.
www.ValueInvestingCongress.com