These are notes from the current Value Investing Congress West, written by Jonathan M. Heller.
From the Advanced Seminar on Value Investing, conducted by T2 Partners' Whitney Tilson and Glenn Tongue:
Tilson suggested that although now is not the appropriate time to be
long a basket of retailers given the current economic situation, there
are some bargains out there. He presented a bullish (and compelling)
case for Target (TGT):
• buying back stock ($10 billion buyback program)
• selling credit card ops—(interestingly enough, the news of the sale
of 47% of this business to JP Morgan for $3.6 billion broke during the
conference)
• Owns a large percentage of its land and buildings—real estate alone may be worth 70-80% of current market cap
• Potential $5.00/share eps 3 years out (stock currently $53)
Tongue presented the bullish case for Sears Holdings (SHLD):
• Repurchased 33 million shares the past 3 years
• Sum of the parts potentially worth a great deal more than current market cap ($13 billion)
• Real estate alone- 250 million square feet- currently being valued at
less than $10/sq ft assuming conservative $11 billion valuation of
business units
• Trading at significant discount to current $100 price
From Day 1 sessions:
Randall Abramson of Trapeze Capital presented a more technically oriented proprietary method his firm uses to time buys and sells. This unique strategy is based on historical trends and levels of price to adjusted book value, and can be applied to stocks and indices.
Abramson revealed this analysis on a number of stocks, and indices, suggesting that:
• Office Depot (ODP) Ruby Tuesday (RT) and Walgreen (WAG) are significantly undervalued.
• Berkshire Hathaway (BRK.A)(BRK.B) now appears overpriced. (Abramson deserves credit for making such an assertion in a roomful of Berkshire devotees, many of whom were in Omaha last week).
