- Reuters/John Gress
Everyone on Wall Street wants to get ahead.
Investors use algorithms, mathematical models, research, and their gut to come up with investment ideas that will deliver outsized returns.
According to SumZero, the contest represents the best of the best of forward-looking research from SumZero’s community of money management professionals.
The winners were picked out of 150 entrees by a panel of 25 experts. Contestants were judged on their thesis, strength of their argument, feasibility of the trade, and originality.
The 5 winning ideas are featured in a report out January 18 by SumZero and were broken up by 5 categories:
- Special Situations: Event-triggered idea Shorts: idea bets against a company’s stock Ex-US: idea associated with companies that are based on a non-American country Small Caps: idea related to companies with market caps lower than $2 billion Mid/Large Caps: idea related to companies with market caps higher than $2 billion
The winners have earned a free ticket to a global 2017 Sohn Investment Conference event of their choosing, and a free, one-year subscriptions to the Canalyst Equity Model Database. Read on to see the 5 winning ideas:
Winner: Best Special Situation
- Mike Zarrilli/Getty Images
Long on Liberty Media Corp Braves Grp
Winner: Wills Manley of Mitotic Investments
Expected Return: 109.2%
Rationale: “High-growth monopoly trading at 50% NAV. Unique tax shielding benefits + mixed-asset security + underestimated impact from new facilities + company errors in their own valuation.”
Winner: Best Short
- Papa John’s
Short on Wingstop
Winner: Adam Patinkin of David Capital Partners, LLC.
Expected Return: 65.4%
Rationale: “We think richly-valued Wingstop Inc has 70% downside to fair value as (i) same-store sales growth goes from positive to negative and (ii) unit expansion misses expectations.”
Winner: Best Ex-US
Long on Bollore
Winner: Steven Wood of GreenWood Investors
Expected Return: 236.1%
Rationale: “World class assets trading at 60% discount at the exact moment when multiple segments are poised to show substantial improvements in ’17. Run by an outsider in a very attractive market.”
Winner: Best Small Cap
Long on CommerceHub
Winner: Artem Fokin of Caro-Kann Capital
Expected Return: 68.9%
Rationale: “Buy a dominant SaaS player that will benefit from secular tailwinds for years/decades; network effect is the moat; -12x EV/EBITD of its core business; 10x-15x turn discount to peers.”
Winner: Best Mid/Large Cap
- Thomson Reuters
Long on Micro Focus International
Winner: Douglas Ott of Andvari Associates
Expected Return: 83.6%
Rationale: “This public software company employs a private equity-like model of acquiring and managing a portfolio of mature software assets. Shares can easily double within 5 years.”