Sohn Foundation 2019 London Review

Activism, ESG and accounting analysis

Hamlin Lovell

The eighth annual Sohn London Investment Conference showcased seven long ideas, four short ideas, and a regional strategy, from ten fund managers and one business school student, who won the third Sohn London Investment Idea Contest.

Activist longs 

Trian Fund Management LP owns over £900m of stock in plumbing distributor, Ferguson. Trian Partner and Senior Analyst, Brian Baldwin, argues that it is misunderstood and undervalued, but should get re-rated when it relists in the US. The firm gets 80% of its sales from branches, which are relatively insulated from e-commerce because Amazon cannot supply components as quickly in a business that requires speed and reliability. Around 75% of sales relate to repairs, maintenance and improvement (RMI), which are less cyclical. End customers are contractors, who are less price sensitive since labour costs typically make up 75% of total costs. 

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