Sohn Investing 2018: An Insider's Recap
Always a spectacle.

Many of the biggest hedge funds - including more than one activist portfolio manager - made presentations on Monday at a top industry event - the annual Sohn Investment Conference.

European and U.S. online food delivery companies Takeaway.com and Grubhub (GRUB) were hot picks, particularly with M&A expected in the sector. And technology was a central focus for many top investors: Light Street Capital's Glen Kacher suggested that Palo Alto Networks (PANW) is a winner, given that we may see a cyber warfare driven financial crisis in the years to come.

There was also a mixed bag of other suggestions -- Rashmi Kwatra, the founder of Sixteenth Street Capital, liked Brac Bank, which is listed on the Dhaka stock market in Bangladesh. It is the 12th largest bank in Bangladesh, but the most profitable with the highest credit rating. John Khoury of Long Point Capital LP sees a 50% upside at homebuilder D.R. Horton (DHI)  and Oleg Nodelman likes U.S. biotech firm Ascendis Pharma. (ASND)

Here's a recap of some of the other big picks of the day:

Doubleline's Gundlach Launches Facebook Short Campaign

Jeffrey Gundlach
Jeffrey Gundlach
 

Doubleline Capital CEO Jeffrey Gundlach urged investors to short Facebook (FB) shares, adding that the social media giant's chart looked "terrible." The well-known investor, known in some circles as the bond king, focused part of a presentation on Facebook CEO Mark Zuckerberg, who he suggested hasn't been apologetic enough for a series of scandals to befall the social media company. In a presentation Gundlach suggested that Facebook's 2.2 billion users should be called "2.2 billion compliance breaches."

Facebook is a holding in Jim Cramer's Action Alerts PLUS.

"Here's the chart of Facebook, it looks terrible," Gundlach said, showing a chart of the social media giant's share price fluctuation since a scandal involving data miss-use by British political consulting group Cambridge Analytica emerged recently. Facebook shares are down from a recent high of about $185 a share, trading recently at $167 a share.

"He [Zuckerberg] doesn't even say that he did anything wrong," Gundlach noted.

Whitbread Likely to Launch Spinoff Effort Soon, Ackman Protégé Says

Scott Ferguson
Scott Ferguson

Bill Ackman Protégé Scott Ferguson of activist fund Sachem Head Capital Management suggested that the market might soon hear news of a break up of Britain's Whitbread plc., a hotel and coffee chain he his fund is currently targeting.

"The CEO is a reasonable, smart person and recently said it is not a matter of if we are going to separate, it's sort of when," Ferguson said.

The activist investor has been pushing for months to split off Whitbread's Premier Inn dominant budget hotel chain from its smaller Costa Coffee stores division. He said at the conference that Sachem has been in talks with the company's management and ex-employees, as well as others.

In his presentation, Ferguson said Sachem Head is keeping a close eye on the company's full-year earnings announcement on Wednesday, adding that it was possible that its CEO, Alison Brittain, will make an announcement about strategic alternatives for the business soon.

Greenlight's Einhorn Launches Shorting Campaign at Assured Guarantee

David Einhorn
David Einhorn

Embattled activist David Einhorn on Monday unveiled a new short-selling campaign focusing on Assured Guarantee, (AGO)  a bond insurer he argues has large losses "baked in" across creditor groups.

"You can't get blood from a stone," Einhorn said. "Their pre-tax income looks likely to collapse."

Einhorn's latest campaign follows his unsuccessful effort last year to drive General Motors Co. (GM)  to split its shares into two classes of stock. That endeavor was defeated by an overwhelming margin, ending a boardroom skirmish that left many stockholders scratching their heads. It also comes after his Greenlight Capital's main fund dropped 13.6% in the first quarter of 2018, driven by negative performance with both short and long positions.

Nevertheless, Einhorn appears to be going back to his once-successful short-selling approach to insurgencies, which has had some big success over the years. One shorting campaign at Allied Capital, which prompted him to write a book, "Fooling Some of the People All of the Time," produced significant positive results for the fund.

Einhorn said Assured Guarantee has exposure to significant Puerto Rico debt and he estimates that it has billions in "implied losses" that the company hasn't appropriately factored in. Costs related to Hurricane Maria, which devastated the region, are a key factor, he suggests.

Glenview's Robbins Likes Cigna-Express Scripts

Larry Robbins
Larry Robbins

Larry Robbins and his Glenview Capital Management LLC said he is supportive of health insurance titan Cigna Corp.'s (CI) acquisition of Express Scripts Holdings Co. (ESRX) , the country's largest benefits management group, in a deal announced in March worth $67 billion.

Robbins made the comment during his presentation at the Sohn conference, adding that he was refuting speculation that he was opposed to the deal. Glenveiw Capital owns a 1.2% of Cigna, according to FactSet. Robbins added that he likes Express Scripts, CVS (CVS) and McKesson Corp. (MCK) .

Cat Rock's Captain Eyes M&A for Takeaway.com in Europe

Online food delivery company Takeaway.com could be an absolute whale for investors and may also be a takeover target in the not-too-distant future, according to Cat Rock Capital Management LP's Alexander Captain.

"Its valuation is such that this could be a whale over the next ten years," Capital said. "It is the most attractive online food delivery company. It is well on its way to becoming the dominant player in Germany."

Captain, who spoke as one of the "next wave" of up-and-coming investors, cited reports suggesting that the company could be acquired in the months to come as part of consolidation among Europe's largest online food delivery companies. These include Just Eat, of the U.K., Delivery Hero of Germany and Takeaway.com, which is headquartered in the Netherlands.

In January, Takeaway.com CEO Jiste Groen suggested in an interview in a German daily newspaper that a merger between it and Delivery Hero could be an option. Groen told German daily newspaper Tagesspiegel that "in each country, there can only be one supplier.

-- Lisa Botter contributed to this story

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