Big-name investors like David Einhorn, Bill Ackman and Carl Icahn took the stage to offer a slew of recommendations at the annual Sohn investment conference in New York Wednesday. But the biggest market move came from a plug for an education company from an Indiana University student who won the right to present his idea in a stock-picking contest sponsored by the Sohn Foundation.
A confident Sunjay Gorawara recommended Bridgepoint Education (BPI),
Einhorn, who heads Greenlight Capital, caused the biggest stir when he said Microsoft (MSFT)
Ballmer, Einhorn said, is a poor allocator of capital, pointing to the recent $8.5 billion deal to buy Skype, and the $45 billion offer for Yahoo! (YHOO)
Einhorn also recommended Delta Lloyd (DL.Netherlands), a Dutch insurer whose shares, at around 15 euros ($21.43), trade for 70% of book value, six times earnings and carry a 6% dividend yield. Einhorn ended his presentation with a "Go, Mets!" cheer, an exclamation whose significance became apparent the next day with news that he is close to a deal to buy a sizable minority stake in the New York baseball team for $200 million.
Pershing Square's Ackman talked up Family Dollar Stores (FDO),
Icahn plugged a name with "great management: me." That is Icahn Enterprises (IEP),
Conference-goers would have done well to heed the Tiffany (TIF)
Former mutual-fund manager Michael Price of MFP Investors had good words for Goldman Sachs Group (GS)
Dinakar Singh of TPG-Axon Capital recommended Orkla (ORK.Norway), a conglomerate whose stock, at around 49 Norwegian kroner ($9), could be worth more than 70 NOK in a break-up. He also likes Sprint Nextel (S), and says the No. 3 U.S. wireless provider is solving its operational problems, and could benefit by picking up attractive assets that may have to be sold by AT&T to gain clearance for its T-Mobile merger.
Noted short-seller Jim Chanos of Kynikos Associates said wind and solar stocks are vulnerable because these much-vaunted energy sources aren't competitive now, with natural-gas prices so low. "That has put an economic arrow into the heart of these industries," he said. He's bearish on Vestas Wind Systems (VWDRY),
Mark Hart, of little-known Texas firm Corriente Advisors, outlined a bearish investment case on China, saying that "signs of a bubble are everywhere." He argued that Chinese banks likely are sitting with a rising amount of bad loans contrary to official statistics and that reported Chinese inflation is understated. He challenged the conventional view that the Chinese currency can only go higher. Hart said that the yuan could fall, and that a Chinese economic and financial crisis could dwarf the Asian financial mess of 1997. Yuan puts bearish bets on the currency are very inexpensive now, thanks to near-certainty in the markets that it will appreciate relative to the dollar.
Steve Eisman of FrontPoint Partners recommended property- and casualty-insurance stocks, saying that industry pricing is starting to turn higher, and that many stocks trade at or below book value. Jeff Aronson of Centerbridge Partners likes CIT (CIT),