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Category: Revisits

Contrarian Calls, Revisited: David Neuhauser’s Bullish Call on Vista Oil (Updated)

Adds David Neuhauser’s comments at the bottom of the story.

Presenting at the second Contrarian Investor Virtual Conference on June 3, 2020, David Neuhauser of Livermore Partners made the bullish case for Vista Oil (VIST).

Vista, “the leading pure play company in the Vaca Muerta basin,” interested Neuhauser because of its strong leadership and management, the large number of undeveloped locations in the basin and “an interesting dynamic where they have credential wells and their shale wells.” The shale wells have produced “beyond expectations,” and with oil prices rebounding there was “substantial valuethe ” in the company, he said. VIST was trading around $3 at the time of Neuhauser’s presentation.

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Contrarian Calls, Revisited: AMC

On a very early episode of this podcast (its fourth, actually), Mark Jones of Pragmatic Capital made the bullish case for AMC’s stock.

At the time of the recording, May 2019, AMC had been in the doldrums for some time over concerns with its debt. It was trading around $15 per share after suffering for years. “I like contrarian situations,” Jones said.

Disappointing numbers at the box office were hurting the stock. But Jones considered this to be a temporary trend as the box office is cyclical in nature. “If you want to understand AMC’s success, you have to understand the dynamics of the box office.”

Citing data from BoxOfficeMojo.com, Jones anticipated better days ahead for the box office. This was partly due to the quantity and quality of movies released by major studios. Both were diminished with Disney (DIS) releasing 50% fewer movies in 2017. With more films slated for release in 2019 and 2020, it stood to reason that box office numbers would improve — and AMC’s stock with it.

His price target for AMC was “in the low $30s.”

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Contrarian Calls, Revisited: Biden Victory and the ‘Rotation to Value’

Scott Colbert, chief economist at Commerce Trust Company, on the eve of last November’s presidential election predicted a ‘blue wave’ followed by a rotation into value stocks.

“The Democratic turnout is going to be much larger than it was, and that’s enough right there to carry most of those swing states back to the Democratic side,” Colbert said last Oct. 28. “You’re not going to have enough pro-Trump voters to offset that Democratic wave.”

This would lead to “Democrats rolling this thing” and taking back the Senate as well as the White House. The biggest change for markets would be a rotation from growth to value. “It’s the combination of the election and a vaccine,” Colbert said.

Corporate America would be punished in the terms of higher tax rates, which would affect growth companies more than any other segment of the market. This would make growth stocks less appealing to investors. Value stocks would benefit from this development.

“If you’re looking for a contrarian play, I think it’s the rotation to value,” Colbert said.

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