We are at the Sohn Conference and the morning session of the Conference is allocated to emerging fund managers. The first presentation was from David Rosen of Rubric Capital Management. Rosen worked at Steve Cohen‘s SAC Capital between 2006 and 2015. His best idea is small chemicals company called Kraton Performance Polymers Inc. (NYSE:KRA). The stock is up 12% today probably because Rosen’s base case price target is $65 or an upside potential of 187%. He also said that Kraton Performance Polymers Inc. could be worth as high as $97.
My first impression is that this is a cyclical company that may lose half of its value when the next recession arrives. We will go through his thesis later this week and determine whether his thesis makes sense.
The second presentation was by Nick Danaher of Domando Capital. Danaher’s best idea is another cyclical stock that may lose more than half of its value: TripAdvisor Inc.(NASDAQ:TRIP). His base case is a 2019 revenues of $3.5 billion and a stock price of $129. His bull case is 2019 revenues of $5.2 billion and a stock price of $230. TripAdvisor shares are down 2.6% in early trading and the market doesn’t seem to find Danaher’s thesis credible.