Published On: Mon, Oct 13th, 2014

Investing Ideas from the GIBI Conference: Pickens, Ackman, Price

 

MFP Investors President Michael Price Interview

 

The following guru investors discussed their ideas at the Great Investors Conference (GIBI), courtesy of Valuewalk.

Boone Pickens, Founder and CEO of BP Capital

The legendary energy investor was bullish on Marathon (MRO) and Clean Energy Fuels (CLNE). The latter has declined a staggering 39% for the year, but Pickens comments that it has grown its stations. He holds 20 million shares in the company. His pick from last year, Diamondback Energy (FANG) returned 40% and Basic Energy Services (BAS) has also risen 40%.

Pickens doesn’t blame low oil prices on overproduction in the U.S., but he added, “We drill too much.” Oil production in the U.S. has increased 35% between 2005 and 2013. At the same time, he welcomed the trend, “hats off to the industry, ” but noted that natural gas prices are 50% cheaper in the U.S. than overseas. Pickens thinks oil could dip under $80, but he doubts he will see $10 natural gas in his life time. Concerning activist investing, Pickens said it can be useful, but added Carl Icahn is as “smooth as a stucco bathtub.”

 

Bill Ackman, Pershing Square

As usual, Ackman was on the war path, and devoted most of the discussion to making his case against the government regarding Fannie Mae and Freddie Mac. He and other hedge fund managers sued the government for violated the Fifth amendment by taking over the mortgage insurers on condition of giving the bailout. He didn’t feel the government justly compensated shareholders. A judge ruled in favor of the government, but Ackman is determined; “I believe we ultimately will win.”

Ackman is bullish on Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Group (FMCC). He owns a 10% stake in each company.

 

Michael Price, Managing Member, MFP Investors

Price recommended FMC (FMC) and Dolby (DLB). Concerning Dolby, the stock was cut in half after the CEO passed away, and it declined on PC sales, but the company is showing signs of recovery. FMC was sold off after it announced an acquisition and Price thinks the stock has been unfairly punished.

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