9:50 Parvinder Thiara, Chief Investment Officer, Athanor Capital, LP: Parvinder Thiara is the founder of Athanor Capital. Previously he worked at D. E. Shaw & Co for eight years. Parvinder Thiara holds a BA degree in Chemistry from Harvard College and an MSc degree in Theoretical Chemistry from Oxford University as a Rhodes Scholar.
Idea: Buy 2-year Brazilian bonds and short the Brazilian real
Benchmark: Long position in money market funds
Thesis: Parvinder Thiara is basically betting on a jump in the prices of Brazilian bonds. He thinks the market is priced in a bunch of interest rate hikes and bond prices are currently depressed as a result. He expects that Balsanaro will bully Brazil’s central bank into rate cuts which will lead to an increase in bond prices.
Since this trade isn’t practical to implement for retail investors, we will be excluding this pitch from our return calculations.
10:05 Angela Aldrich, Managing Partner & Portfolio Manager, Bayberry Capital Partners LP: Angela Aldrich is the founder of long/short equity hedge fund Bayberry Capital. Prior to launching her fund Aldrich spent more than 5 years at Blue Ridge Capital. Angela Aldrich received a BS degree in Economics from Duke University and an MBA from the Stanford Graduate School of Business.
Idea: Short Treasury Wine Estates (TSRYY)
Benchmark: Short position in iShares MSCI Australia ETF (EWA)
Thesis: Global wine market is a mature, slow and steady growth market. USA and China are the biggest regions in terms of wine consumption though Chinese consumption is growing much faster. The $10-$15 a bottle price segment had been growing fast in recent years and “this is really where Treasury has been killing it” said Angela Aldrich. This changed recently though.
Angela Aldrich said that Treasury Wine Estates is dealing with counterfeiters in China, cannibalizing its most popular brand. Aldrich also claims that Treasury Wine Estates was forcing its distributors to buy its other brands which aren’t well received by the Chinese consumers and the company is now looking at high inventory levels in China. The US wine market isn’t growing and Treasury has been stuffing every distribution channel recently and offering discounted wine at places like 7-Eleven, Costco, and Sam’s Club.
“So things are not good. We can see that things are not good. Management even sees that things are not good. With the revenue declines that we are seeing, the increased cost from in-house distribution, and generally negative operating leverage we see at least 50% downside with the stock,” said Aldrich.
We should note that Aldrich recommended shorting the Australian traded TWE-AU ticker, but we will be using the same company’s ADR to measure the performance of this stock pitch. TSRYY shares was trading at $11.49 on May 6th before Aldrich’s presentation and closed the day at $11.34. I thought it was a good presentation. I wouldn’t be surprised if this stock losses 20% of its value in the coming months.
You can read the summary of other presentations on the next page.
