Best Ideas Pitched by Bill Ackman, David Einhorn & Others at GIBI Conference

Tom Russo, a managing member of Gardner Russo & Gardner, talked about Wells Fargo & Co (NYSE:WFC). Around a year ago, Wells Fargo got itself in hot water following the revelation that it had opened millions of accounts for customers that didn’t ask for them. As a result, customers were wrongly charged and even had their credit scores affected. The scandal led to the resignation of Wells Fargo’s CEO John Stumpf and the company faced a backlash from the government. However, Tom Russo, whose fund owns around 12.65 million shares of Wells Fargo & Co (NYSE:WFC) (representing around 5.20% of its 13F portfolio’s value), believes that despite the issues stemming from the scandal, the bank looks good, as it wasn’t affected that badly from a financial standpoint.

Wells Fargo & Co (NYSE:WFC) recently posted its financial results for the third-quarter, which showed that the consumer sales scandal had some impact on its performance. The bank posted revenue of $21.94 billion, which declined by 2% on the year and was lower than the expected $22.40 billion. However, its adjusted EPS of $1.04 was better than the consensus estimate of $1.03. The adjusted EPS excludes $1 billion in litigation costs related to Wells Fargo & Co (NYSE:WFC)’s pre-crisis mortgage lending practices.

Andrew Wellington, co-founder, managing partner and Chief Investment Officer of Lyrical Asset Management, pitched Flex Ltd (NASDAQ:FLEX), in which the fund initiated a stake during the second-quarter and reported a $202.84 million position that contained 12.44 million shares in its latest 13F filing. Wellington likes that Flex Ltd (NASDAQ:FLEX) is registering double-digit growth in profits and is using around half of its free cash flow to return money to shareholders. Last year, Flex Ltd (NASDAQ:FLEX)’s board of directors authorized a buyback program worth $500 million, and at the end of June 2017 it had $211 million still available.

Last but not least, Jeanie Wyatt, CEO and CIO of South Texas Money Management, talked about Electronic Arts Inc. (NASDAQ:EA). At the end of June, South Texas Money Management held 325,183 shares of the company worth $34.38 million. Wyatt likes Electronic Arts Inc. (NASDAQ:EA) because the company enjoys higher margins due to going over the top (provides its products via Internet) than its peers that still focus on traditional distribution methods, like selling physical video games in stores. Moreover, Electronic Arts Inc. (NASDAQ:EA) has accelerating sales growth and has new upside in the e-sports segment.

Disclosure: None