A treasure trove of stock tips, macro bets and overall market wisdom from a variety of high-profile activist investors highlighted the 2014 Delivering Alpha Conference, co-hosted by Institutional Investor and CNBC.
Investors enjoyed their biggest stock feast during the Best Ideas panel. Omega Advisors’ Leon Cooperman, who now thinks the market is fairly valued, served up a dozen ideas. They include three that meet his definition of Growth at a Reasonable Price (GARP): Actavis, Citigroup and Thermo Fisher Scientific. Under Income and Growth, he singled out Atlas Energy, Gaming and Leisure Properties, KKR and Nordic American Offshore. Two are deemed prime for asset restructuring — QEP Resources and Supervalu. Finally, he recommended three for high risk investors: Louis XIII Holdings, Monitise PLC and Sandridge Energy.
Glenview Capital Management’s Lawrence Robbins singled out six stocks: Thermo Fisher Scientific, Monsanto, HCA, Hertz, National Oilwell Varco and Flextronics. He did not mention Carter’s, of which he disclosed on Tuesday he owns 6.4 percent.
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Paulson & Co.’s John Paulson devoted his entire session to M&A ideas and how he plays 2014’s version of merger mania. He offered his thoughts on several high profile deals, including Valeant Pharmaceuticals’ hostile bid for Allergan. Paulson also has stakes in both Shire and its pursuer, Abbvie, spun off from Abbott Laboratories last year. That sets up a variety of possibilities, all of which could make money for Paulson, particularly given the speculation that Allergan, eager to escape from Valeant, might make a bid for Shire, which is trying right now to elude Abbvie. Paulson is also excited about consolidation in the energy business, specifically a group of independent oil companies involved in fracking in North Dakota’s Bakken shale: Whiting, Kodiak and Oasis.
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Citadel founder and CEO Kenneth Griffin called Rupert Murdoch’s 21st Century Fox’s reported bid for Time Warner a “great deal. Great companies. Makes a lot of sense.” Griffin, whose firm holds stakes in both companies, argued that a deal will likely occur if Murdoch presses on because Time Warner has no controlling shareholder.
He also opined about changes on Wall Street. “We’re definitely seeing a transformation of banking,” he said. Banks are pulling back from various trading activities; 2008 revealed how disastrous this area could be for banks. “They were abysmal, except for a few top firms,” says Griffin of banks’ trading returns.
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Stanley Druckenmiller, in a rare public appearance, ripped into Federal Reserve monetary policies, saying that quantitative easing and extended artifically low rates may bring “unappreciated consequences.” The Duquesne Capital founder said the Fed partly caused the 2008 financial crisis and is using the same methods to bring about a recovery. “I’m personally experiencing a sense of déjà vu,” he said. “Does it make any sense to double-down on monetary policy, when monetary policy caused the problem in the first place?”
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In non-conference news, Boston-based Adage Capital Partners disclosed that it owns 7.54 percent of NextEra Energy Partners, a master limited partnership that went public earlier this month.
