Sohn Conference, Part I

All the Long ideas

Part I of Random Walk’s notes from the Sohn Conference. Very high idea density, condensed even further for your enjoyment.

---

👉👉👉Reminder to sign up for the Weekly Recap only, if daily emails is too much. Find me on twitter, for more fun. 

---

Notes from Sohn, Part I

First some throat clearing:

• Most (but not all) of the presentations were company-specific. Presentation format varied a bit, ranging from quick, 5 min lightening round presentations, to longer 15-30 minute deep(er) dives.

• Presentation styles also varied a good deal, with some people keeping it simple, and others throwing up slide after slide (and more content than anyone can reasonably digest from an audience).

• Given that, I’ve decided to reorganize my notes to favor consistency, rather than try to blurb every presentation in the order and style in which it appeared. I also included links to video where available, but most of the presentations are not available.

Very simply, here’s how I’ve organized the notes:

Part I: Longs

• Hidden gems

• Good, but even better than the market thinks

• Contrarian Longs

Part II: Shorts & General Discussion

• Shorts

• non-specific stock discussions, e.g. AI, Macro, Reflections of an Asset Manager

• General reflections

Where my notes were simply useless (either because I was distracted or otherwise had a hard time following the conversation), I might just skip the presentation entirely. Everyone offered more detail and sophistication than reflected by my notes, but I am balancing depth with readability (as per always).

In general, The Sohn Conference is a lot of fun, and definitely worth it. It’s great exposure to a number of different strategies and ideas. There were no bad presentations (which is rare).

Also, picking stocks is very hard.

Long Ideas

---

I. Hidden Gems

---

Eric Wolff - Gumshoe Capital

Pason $TSE:PSI: Electronic Drilling Recorder (EDR) for Oil & Gas

• mission critical software, with dominant market share that’s a relatively small share of the overall cost stack for clients—translates to pricing power.

• Can’t drill without an EDR, but it represents ~1% of costs, so industry will pick the known-commodity—can’t get fired for using Pason.

• Trades with O&G multiple, not a software one.

• Downside is still uncertainty around rig count, which is a topline driver.

RW take: sounds interesting, but would need to understand sales pipeline and current valuation a lot better.

Nikhil Daftary - NK Capital

$TSE:ATD (Alimentation Couche-Tard): Circle K convenience stores (Full video here)

• Big gap between perception and reality. Perception is a brick n’ mortar retailer selling disfavored consumer goods, like gas and cigarettes. Reality is a unique “on demand” retailer, with an enviable network, industry fragmentation (ripe for consolidation), and steady long term growth.

• Barriers to entry are high because of permitting, etc.

• Fading gas sales is an opportunity for consolidation, just like tobacco was for Altria. See also Valvoline and AutoZone. Gas demand has already “peaked” and CircleK sales are still growing. Currently, largest player has less than 10% of market.

RW take: also sounds interesting, but issue with EVs is that people will charge at home, skipping the convenience store entirely. Didn’t address. Also, rise of Buc’ees, etc.

Michelle Ross - StemPoint Capital

Crinetics Pharma CRNX 0.00%↑ : Endocrine disorder drugs (i.e. GLP-1 pipeline)

• endocrine disorder drugs are just getting started. Excluding obesity, 10% of nation has an endocrine disorder.

• CRNX is a pioneer in endocrine disorders, since 2008. Pipeline is massive and 3 successful trials in last 6 months alone, with effect-sizes large enough that you don’t need to squint.

• Cushings and Adrenal Hyperplasia are on tap, with $200B TAM.

• ~4x upside from current price

RW take: no idea how to evaluate these companies. Also, I find the business model of persuading the FDA that “effects exist,” in order to require insurance companies to pay for those effects (at whatever price) to be icky.

Gor Ter-Grigoryan - Sellaronda Global

Schibsted $OB-SCHA - Norwegian marketplace for mobility, jobs and houses

• 200 year holding company that recently restructured to focus on marketplace businesses

• market dominant in jobs, housing, and mobility

• marketplace margins currently well-below peers because the company is ending an investment cycle, but substantial margin upside going forward.

• stock still has a “conglomerate discount” but new ceo, and new focus, will erode that discount with time.

RW take: underpriced marketplace is an interesting idea, but I have no idea how big these end-markets are, and what the longer term growth looks like.

Greenlight Capital - David Einhorn