* Conference seen as must-attend for wealthy investors
* L'Oreal may gain as aging populations spend on cosmetics
* Porsche seen trading at a big discount
By Laurence Fletcher
LONDON, Nov 19 Top hedge fund managers picked
stocks as diverse as News Corp, holding company Porsche
, and cosmetics maker L'Oreal on Monday at
a hedge fund event seen by investors as revealing the industry's
top stock picks.
The Ira Sohn Conference, being held for the first time in
London, attracted such speakers Chris Cooper-Hohn, the media-shy
founder of The Children's Investment Fund Management (TCI),
Kynikos Associates founder Jim Chanos, Egerton Capital's John
Armitage, and Muddy Waters' Carson Black.
Cooper-Hohn named Porsche and News Corp as two stocks that
were being unfairly marked down by the market.
The trader, well known for taking activist stakes in
companies, said that Porsche trades at a 40 percent discount to
net asset value, while Volkswagen, of which it owns nearly
one-third, is also cheap.
"VW is on five times earnings. With Porsche you get it at a
p/e (price to earnings ratio) of three," he said. "It's a
discount on a discount."
He also said that legal claims by hedge funds against
Porsche are likely to be dismissed or settled for around 1
billion euros. Net claims amount to around 5 billion euros, he
Investors accuse Porsche SE of concealing a move in 2008 to
acquire VW, and of covertly amassing a majority interest in
Europe's biggest carmaker.
Cooper-Hohn also favors News Corp, despite market concerns
over a telephone hacking scandal that prompted it to close
Britain's News of the World newspaper.
"People think it's a cyclical business with lots of
advertising. It has lots of steady fees," he said. "It's a
business with massive pricing power. It shouldn't be trading at
four times EBIT (earnings before interest and taxes)."
The conference, a charitable event that raises money for
paediatric cancer research, is seen in the United States as a
must-attend event for wealthy investors.
Egerton Chief Investment Officer John Armitage named News
Corp, Samsung, Apple, Richemont and Volkswagen as his favorite
Nicolai Tangen, founder of $5.8 billion AKO Capital, said
French cosmetics group L'Oreal will benefit from aging
populations spending more on cosmetics, and said the stock was
at the low end of its historical value range.
He added that his firm's research showed that L'Oreal
products continue to increase market share.
Meanwhile, Algebris head Davide Serra was upbeat on the
outlook for so-called "CoCos" - contingent convertible bonds,
which bolster a bank's capital in times of trouble.
He said Lloyds was his largest position. "You're paid 10
times the risk-free rate. It's an absolute no-brainer."