Alexander Roepers on Constructive Shareholder ActivismVW Staff
Alexander Roepers, Atlantic Investment Management is speaking on the topic of ‘Insights from 25 Years of Constructive Shareholder Activism’ at the 9th Annual Value Investing Congress.
Alexander Roepers is the President of Atlantic Investment Management, which he founded in 1988. Atlantic Investment Management is a $1.7 billion, global equity hedge fund, which concentrates on a limited number of high quality, undervalued, out-of-favor companies, and using activism approach to unlock value. Atlantic has played a successful activist role in companies including; Kennametal, Dole Food, SPX, ITT, TNT, Dai Nippon Printing, Kurita Water, and Del Monte Foods. Prior to founding Atlantic, Roepers was Director of Corporate Development at Thyssen-Bornemisza Group and Dover Corporation. You can find more about Roepers and his strategy from a recent shareholder letter obtained by ValueWalk.
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Alexander Roepers live coverage
[10:40am] 5 new ideas coming from Alex today… Runs a concentrated portfolio (generally 6-7 stocks representing 10-20% of capital) with use of constructive shareholder activism. Today’s ideas include: Baker Hughes, Faurecia, Harman, Lanxess, and Itochu
1. Baker Hughes (FHI) – third largest oilfield services company behind Haliburton and Schlumberger.
Thesis centered on free cash flow generation for first time in several years, margin improvement, and better capital allocation including share repurchases. Sees downside support around $40-45 per share and has a price target of $71 (43% upside).
2. Faurecia (EO) – French automotive parts company
Deleveraging and improved operating margins will drive the stock higher. Price target of EU31 per share.
3. Itochu Techno-Solutions (4739 JP) – Japanese information technology company (third largest IT service provider)
Price target of JPY5800. IT spending recovery in Japan, healthy balance sheet (net cash equals 25% of market cap), share buybacks and M&A contribute as well.
4. Lanxess (LXS GY) – German specialty chemicals company. Performance polymers (global tire industry)
Solid management team, strong pipeline for growth and pent-up demand in Europe. Target price at EU75 in next 12-18 months (45% upside potential).
5. Harman International (HAR) – Makes speakers and now focusing on speaker systems in auto
Targeting $84 per share from today’s $66. Massive order backlog, at inflection point of higher sales growth and profitability, margin improvement and greater earnings power (chance to double earnings in next 3 years).
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