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Day 1 of this year's Value Investing Congress was as lively as we expected -- with a few twists. During their presentations to a packed house of cheapskate contrarians, investing luminaries ranging from Joel Greenblatt to David Einhorn made cases for the investments and strategies they loved -- or hated -- the most.
A couple of themes played right as we expected, with some speakers making strong big-picture cases for the cheapness of large-cap value stocks. Others, like impassioned bull cases for gold or financials, haven't made an appearance -- but there's always day 2!
3 watchlist ideas
Stock ideas flew fast and furious today. While many ideas batted around the VIC are either too saucy or illiquid for everyday investors to get on board with, there were some intriguing ideas pitched that could be right up your alley. These aren't ideas I've had a chance to thoroughly vet just yet, but they've caught my eye for further research and were presented by some of the brightest value minds out there.
1. CME Group
Ricky Sandler of Eminence Capital pitched CME Group (Nasdaq: CME ) , which is one of the largest derivative and futures exchanges in the world. CME benefits from powerful network effects and, according to Sandler, has wisely used acquisitions over the past few years to strengthen and round out its offerings. The business looks well-positioned to benefit from the rising demand for more targeted investments and risk management tools such as weekly options contracts both here and abroad.
You'd think those tailwinds, competitive advantages, and fat profit margins would be enough to keep investors salivating, but the stock is selling near a 52-week low on short-sighted concerns that trading volumes could fall in a nasty bear market. This one deserves a closer look.
2. DENTSPLY International
Tim Hartch of Brown Brothers Harriman is an investor after my own heart. One of the funds he co-manages, the BBH Core Select Fund, is chock-full of some of my personal holdings and more recent recommendations at Inside Value, including wide-moat digital payment giants Visa (NYSE: V ) and eBay (Nasdaq: EBAY ) .
As great as those businesses are, though, the business Hartch said he'd choose to go with if forced to put all of his money into a single holding for the next 20 years was DENTSPLY International (Nasdaq: XRAY ) . DENTSPLY is the market leader in the fragmented dental supplies market, according to Hartch, and the company is benefiting from the rising tides of an aging populace and a budding emerging markets consumer. Mix in a loyal, fragmented customer base that lacks bargaining clout and a stock price that has recently stumbled, and you have enough to warrant my interest. Hartch thinks the stock is worth around $44, which would make today's price of $32 a bargain.
When he wasn't busy roasting Green Mountain Coffee Roasters (Nasdaq: GMCR ) stock during an epic 110-page slide presentation that sent the shares spilling, Greenlight Capital's David Einhorn was waxing on Sprint (NYSE: S ) and Vodafone (Nasdaq: VOD ) .
I think Sprint is a hellacious value trap given its weak competitive position and crushing debt load, but I agree with Einhorn that the Vodafone thesis is unfolding nicely. The international telecom giant is set to start collecting dividends on its 45% stake in Verizon Wireless, the first of which will be a $4.5 billion check to arrive in January. Mr. Market seems hung up on European exposure instead of the sizable Verizon Wireless dividends about to start flowing Vodafone's way, though, which could make for an interesting opportunity for long-view contrarians willing to ride out a rough couple of years in Europe.
Inside Value members can get my full notes and takeaways from this year's Value Investing Congress on our members-only website. If you're looking for the short, sweet, and filtered versions of tomorrow's big lineup of speakers like Leon Cooperman, Whitney Tilson, and Bill Ackman, though, you can follow along with my real-time coverage on Twitter via @TMFInsideValue. If that's not enough to feed your inner value hunger, though, you can get a $2,300 discount on attending the next VIC if you register today with discount code O12FOOL.