4 Long Ideas From the London Value Investor Conference

Long Investment Thesis on Perrigo Company

Let’s now refocus our attention on Michael Keller’s views on Perrigo Company plc (NYSE:PRGO). Mr. Keller outlined three drivers for the consumer goods and specialty pharmaceutical company’s business in the foreseeable future, which include the positive impact of the aging population on the pharmaceutical industry, the company’s store brand products, as well as the shift of prescription medications to nonprescription over-the-counter status, known as the “Rx-to-OTC switch”. The co-manager of BBH Core Select asserted that Perrigo’s stock performance has been weighed on by the departure of its long-time CEO Joseph Papa, who recently joined embattled Valeant Pharmaceuticals Intl Inc. (NYSE:VRX), pricing pressure in generics, and the not-so-successful acquisition of Omega Pharma Invest. However, the price weakness is well behind the firm according to Mr. Keller. Perrigo has seen its market value drop by 33% since the beginning of 2016. John Paulson’s Paulson & Co. has 2.64 million shares of Perrigo Company plc (NYSE:PRGO) in its equity portfolio as of the end of the March quarter.

Go Long Royal Bank of Scotland Says Nick Kirrage

Last but not least, let’s have a look at the bullish view on Royal Bank of Scotland Group PLC (NYSE:RBS) shared by Nick Kirrage of Schroder Recovery Fund. Mr. Kirrage believes the situation at Royal Bank of Scotland has been slowly getting better in recent years after the bank’s $66.5 billion taxpayer-funded bailout in 2008, but that the investment community has barely noticed the improvement. The bank’s loans have halved since 2008, while its investment banking arm has been nearly closed down. More importantly, Mr. Kirrage claimed that customers have not changed banks, partially due to laziness, while the retail banking business is believed to have great long-term returns, with returns of equity that could exceed 10%. Royal Bank of Scotland Group PLC (NYSE:RBS) plans to cut 450 service jobs amid a shrinking of its operations in the United Kingdom, part of the company’s plans to focus on retail and commercial banking in the country. RBS shares have lost 21% of their value in 2016. Jim Simons’ Renaissance Technologies owns 1.25 million shares of Royal Bank of Scotland Group PLC (NYSE:RBS) as of March 31.

Disclosure: None