Axel Capital Management’s Anna Nikolayevsky said she likes chipmaker Micron Technology Inc., saying it benefits from government subsidies and is considered strategic by the US.
(Bloomberg) — Axel Capital Management’s Anna Nikolayevsky said she likes chipmaker Micron Technology Inc., saying it benefits from government subsidies and is considered strategic by the US.
Nikolayevsky was speaking Wednesday at the Capitalize for Kids Investors Conference in Toronto.
Prominent hedge fund managers and some of their biggest clients have gathered at the two-day event to pitch their best trade ideas and discuss the investment outlook amid an environment of rising rates, volatile markets and war in the Middle East.
Scheduled speakers at the event include Elliott Investment Management’s Paul Singer, Balyasny Asset Management’s Dmitry Balyasny and Bridgewater Associates’ Karen Karniol-Tambour. For the full agenda, click here.
(All times New York)
Axel’s Nikolayevsky Likes Micron (5:05 p.m.)
Axel Capital Management founder Anna Nikolayevsky pitched a long bet on semiconductor company Micron Technology Inc.
The company is the only memory manufacturer in the US, is considered strategic by the government and is a recipient of domestic and international subsidies, she said.
That will help the company with its construction projects and expand its revenue potential, Nikolayevsky added.
Cliff Asness Says AI Will Change How We Work (3:45 p.m.)
AQR Capital Management founder Cliff Asness said artificial intelligence technology will “change all our jobs,” adding that his firm is still working on how to use the technology for its investments.
His firm has been using natural language processing for years, but is “still working out” ways it can use technologies like ChatGPT to help it make investments, he said.
“You can use it to write code and debug code,” Asness said. “But then you give ChatGPT your code, and your compliance and security area doesn’t necessarily like that.”
Still, he thinks such concerns will ultimately be resolved, and it will be a hugely important tool for everyone. For now these technologies can be used in processing corporate statements and in combining investment factors, he said. Machine learning for example can help in finding correlations among certain factors.
“A lot of ways of combining signals can be made better,” Asness said.
Ariel’s Hobson Sees Recession ‘At Some Point’ (2:50 p.m.)
Ariel Investments Co-Chief Executive Officer Mellody Hobson said she thinks the US will face a recession “at some point” but doesn’t anticipate a hard landing, as businesses are financially stable and corporate balance sheets are strong.
“No one wants a recession,” Hobson said. But if it does, she doesn’t see “the kind of contagion that leads to real-world problems.”
Hobson also said she thinks geopolitical polarization is “dangerous” and poses risks to capitalist democracies, citing Middle East tensions, the Covid pandemic and US debt-ceiling deadlocks as key risks right now.
“All of this has profound effects on real-life people who don’t get a paycheck as they need it,” she said.
Smith Touts Bloomin’, Algonquin Investments (3:15 p.m.)
Starboard Value co-founder Jeff Smith said Wednesday that restaurant chain Bloomin’ Brands Inc. is undervalued and boasts strong discretionary cash flow.
Bloomin’ is attractive because one of its brands, Outback Steakhouse, is experiencing operational difficulties that are causing the stock to trade at almost half the multiple of its peers, Smith is expected to say. The hedge fund firm disclosed in September that it holds a 9.6% stake in the company.
Smith is also bullish on Algonquin Power & Utilities Corp., another previously disclosed long position, because he sees value in the company’s renewables business that’s up for sale, the person said. Proceeds from that deal could be used to pay down debt, repurchase stock and boost profit, said Smith, who thinks the company will “re-rate” when utility investments bounce back.
“Until then, this creates this amazing opportunity to be able to buy a great company at a massive discount to its peers,” Smith said.
In July, Starboard said it acquired a 7.6% stake in Algonquin.
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