Value investors touted a variety of stock ideas in different parts of the market, even as geopolitical risks and rising energy prices weighed on sentiment. At the Value Invest Conference in New York on Thursday, Summit Street Capital Management’s Jennifer Wallace highlighted stocks that are gaining attention after the Strait of Hormuz shipping bottleneck has sent liquid fertilizer prices soaring. He touted CF Industries as a structurally advantageous “cash flow machine,” citing its exposure to world-priced fertilizer and low-cost U.S. natural gas inputs. “Fertilizer is priced on a global commodity basis,” Wallace said, adding that CF’s domestic cost advantage positions it as one of the world’s most profitable producers. The investor also highlighted Signet Jewelers as a “cash flow diamond” and argued that the market has overlooked the company’s size and resilience. The company generates the majority of its sales in North America, has a significant presence in fashion jewelry, and maintains a top share of the U.S. bridal jewelry market. Mr Wallace said the combination supported stable cash generation despite investor concerns about consumer spending. Mario Gabelli, Chairman and CEO of GAMCO Investors, highlighted sports stocks as rare assets related to premium live content. He cited the Atlanta Braves, Madison Square Garden Sports and Manchester United as attractive plays based on franchise value. At Madison Square Garden Sports, Gabelli said the stock, which trades at about $310, could be worth “more than 50%,” adding that the planned divestiture could help unlock value. Gabelli downplayed the impact of geopolitical risks on his investment approach. “Are we worried about the Strait of Hormuz? We don’t want to waste our time making moves like that,” he said. “Political dynamics are what we think about, but I don’t necessarily think about it within the framework of our holdings.” Opposite Jonathan Boyer, president of Boyer Value Group, Nifty Fifty positioned his stock as the “opposite of Nifty Fifty,” the then-Magnificent Seven, arguing that investors are overlooking quality companies in the focus on growth stocks. Boyar cited Uber Technologies as one of his top ideas, saying concerns over disruption to self-driving cars have overshadowed the “lightly capitalized cash compound”. He also echoed the case for the value of Madison Square Garden Sports, arguing that the market incorrectly applied a “Dolan discount” to the family’s ownership of the New York Knicks and Rangers, causing the stock to trade for less than the combined value of those two teams. John Rogers of Ariel Investments called the Scotts Miracle-Gro name an undervalued company, citing its strong brand name and potential for shareholder returns. Mr. Rogers expects lawn care companies to put more emphasis on stock buybacks, which he believes could help boost both profits and stock prices.
