Spring 2014

Orion Marine is positioned to benefit from increased demand for marine construction due to the need for deeper ports in the U.S. and the upcoming projects from the Army Corps of Engineers. The stock is currently trading at approximately $13, which is about 40% above the buy point, but the target price is set at $20, indicating significant upside potential if purchased at lower prices.

The investors have identified value in gold miners, which have been significantly discounted due to the decline in gold prices. They bought a diversified basket of gold mining stocks at the end of the year, believing they were undervalued and set to recover as the market stabilizes.

We recommend investors buy Allegion equity with a base case price target of $75, representing ~50% upside from the current share price. The investment thesis is supported by expected accelerating topline growth from a rebound in non-residential construction spending, significant margin improvement opportunities in Europe, effective tax optimization strategies due to Irish domiciling, and strong free cash flow generation that can be used for buybacks and M&A.

We recommend shorting Cablevision (CVC) with a potential return of +52%. The investment thesis is based on the real and accelerating threat from Verizon FiOS, which is expected to lead to significant subscriber losses for Cablevision. Additionally, Cablevision faces continued margin erosion due to an over-leveraged balance sheet and limited pricing power, while takeover speculation has artificially inflated its valuation.

We recommend a long position in Carnival Corp. (CCL) with a two-year target price of ~$57, representing ~53% upside from the 4/17/14 share price of $37.32. The stock is trading at a significant discount to its intrinsic value due to one-time setbacks, and we expect a reversion to positive industry trends and operational improvements under a new CEO to drive substantial margin upside.

We recommend investors buy Clean Harbors, Inc. (CLH) stock with a 12-18-month target share price of $85-95, representing ~50-70% upside. The investment thesis is based on the fair valuation of the core hazardous waste management business, which more than covers the current share price, and the mispricing of shares due to transitory issues. Additionally, divesting non-core assets will generate cash for buybacks and refocus management on the core business.

Naspers is undervalued as the market is attributing a negative value to its unlisted assets while its publicly traded interests are worth significantly more than its market cap. The investment thesis suggests buying Naspers and shorting its publicly traded assets to exploit this mispricing, with a projected net return of 738%. The 'stub' representing Naspers' unlisted assets is estimated to be worth over $20 billion, indicating a substantial upside.

Cott Corporation is the largest manufacturer of private label beverages in the world, and despite a troubled past, recent management changes and a return to its core strategy have led to a significant recovery in its stock price from under $3 to $9. The company has also instituted a dividend and a stock buy-back program, indicating a positive outlook for its financial health.

Dover became incredibly interesting after a selloff, with a fair value estimated between $80 and $90. The spin-off of Knowles is expected to add significant value, and the company has a strong business model providing acoustic systems for various devices.

Knowles is seen as an orphaned spin-off with a strong business in acoustic systems for mobile devices. The company is expected to improve margins significantly as it consolidates facilities and benefits from increasing average selling prices.

Rayonier's upcoming spin-off of its specialty chemical business is expected to unlock significant value, with the spin-off potentially valued at $25 to $35 per share. The parent company is also expected to have a strong dividend yield, making it an attractive investment.

The spin-off of Rayonier's specialty chemical business is expected to be undervalued due to its initial leverage and the perception of its business. However, it has high cash flow potential and should de-lever quickly, making it an attractive investment opportunity.

Liberty Media is undergoing multiple spin-offs that are expected to unlock value across its disparate businesses, including the creation of a tracking stock for Liberty Broadband, which is seen as a positive development.

The spin-off of Liberty Interactive into two new entities is expected to unlock value, particularly for QVC, which is viewed as an underappreciated business.

Liberty Ventures is essentially a publicly traded hedge fund that is expected to unlock value through its spin-off, which could be beneficial for investors.

Philippe Jabre mentioned that he invested 10% of his fund in Russia after a collapse in valuations, indicating that he believes the current prices reflect the negative sentiment and that there is potential for recovery over time.

In 2009, Jabre noted that he bought US banks, including JP Morgan, after hearing positive comments from the CEOs about their profitability, which signaled a buying opportunity as the market was overly pessimistic about the sector.

Similar to his investment in JP Morgan, Jabre bought Citigroup in 2009 after hearing the CEO's positive outlook on the bank's financial health, which indicated a significant opportunity as the market had a negative view of banks at that time.

Jabre invested in European financials ETFs when they were trading at 60% of book value, anticipating a recovery supported by strong actions from the ECB, which ultimately led to a significant increase in value.

The Japanese government is implementing policies that could lead to significant market growth, with potential for the Nikkei to rise to 16,000-18,000 if reforms such as corporate tax cuts and labor liberalization are successful.

Despite many macro funds being short on Chinese shares, if the Chinese authorities stimulate the economy, there is potential for the Chinese market to increase by another 10%.

Jacobs Engineering is well-positioned to benefit from significant capital spending in the chemical industry, driven by lower natural gas prices and structural shifts in production. The company is considered one of the best-run firms in the engineering and construction sector, making it a favorable investment for the long term.

Orion Marine specializes in marine construction and dredging, and while the company faced challenges post-2008-09 due to declining revenues and intense competition, it is expected to recover as the industry stabilizes. The company is on the radar for potential investment if the stock price declines further.

Allegion is a strong investment due to its solid fundamentals and position in the security products market, which is expected to grow as demand for safety and security increases globally.

The investor believes that Cablevision Systems Corporation is overvalued and expects its share price to decline.

Clean Harbors is poised for significant earnings growth due to the introduction of a new incinerator and $200 million in growth capital expenditures expected to generate a 20% return on invested capital. This growth, combined with the elimination of valuation discounts from re-refining operations, suggests a substantial upside in share price, with a target price of $93.05, representing a 68% upside from current levels.

Naspers is considered a long position due to its strong market position and growth potential in the digital and e-commerce sectors.

Aeropostale is primarily a teen retailer facing difficulties in the current market. The turnaround they are attempting would be better accomplished in a private setting, either under a financial sponsor or as part of a larger company, where they can operate without the pressures of public scrutiny and quarterly evaluations.

Starz was incredibly cheap and trading at a steep discount to its peers post-spin. The investment more than doubled in just over a year and a half.

Liberty Ventures will spin off Liberty TripAdvisor Holdings, which will hold a significant economic and voting stake in TripAdvisor, potentially simplifying the structure and creating value.

TripAdvisor is part of the spin-off from Liberty Ventures, which is expected to simplify the structure and create value as the market recognizes the underlying assets.

Stephen Lieu pitched XPO Logistics as a deep-value opportunity during the Moon Lee Prize Competition, highlighting its potential for significant upside.

Patrick Stadelhofer pitched World Acceptance Corporation, identifying it as a compelling investment opportunity during the Moon Lee Prize Competition.

Akhil Subramanian pitched Pandora as a valuable investment opportunity during the Moon Lee Prize Competition, focusing on its growth potential.

Jackson Thies pitched Post Holdings as a strong investment opportunity during the Moon Lee Prize Competition, emphasizing its market position and growth prospects.