By Reshma Kapadia
Five U.S. companies on the comeback trail, an advertising company that could hit $1 trillion in market value, and a well-known used car company that could still be a 10-bagger are the top picks cited by hedge fund managers who gathered at an annual investment conference on Tuesday.
Greenlight Capital's David Einhorn broke from his recent history of offering up European stock ideas at the Sohn Investment Conference to highlight five well-known U.S. companies in the midst of transition after scandals and rough patches.
The topics and banter among speakers at the Sohn conference, which raises money for pediatric cancer research, offered a glimpse at what is on the minds of top hedge fund managers. Near the top of the list: Artificial intelligence, the future for software and the difficulty in finding liquidity as the path to exiting private investments -- such as initial public offerings -- has been challenged in private credit but also elsewhere.
Einhorn speed-talked through a presentation spiced up with cartoons and music clips. After pitching little-known European stocks in recent years, Einhorn offered up the following U.S. companies in transition.
Acadia Healthcare, a behavioral health and methadone clinic operator, is trying to recover from allegations it held patients involuntarily and an aggressive expansion plan Einhorn said was marked by operational missteps and cost overruns.
Einhorn described the market reaction as excessive and said the company was viewed as a "reputable, responsible" operator among medical experts. He also highlighted the company's decision to bring back Debbie Osteen, a previous chief executive who oversaw a tripling in the company's stock price.
Einhorn sees the stock almost doubling from its current $27 to $56 as the transition takes shape.
Centene Holding, the leading ACA exchange and Medicare insurer, has been dramatically under-earning, according to Einhorn. He sees a path to earnings normalizing, with management targeting a four percentage point improvement in margins, which had fallen from 12% to 5%. Einhorn expects reimbursement rates to catch up to rising medical costs. Plus, he sees the business as well-positioned for automation and AI-driven efficiencies. Einhorn thinks the stock could hit $85 to $102, up from its current $56.
Fluor, which oversees large-scale engineering and construction projects, is a survivor, poised for revaluation, according to Einhorn. The company is dealing with the scars of past mismanagement, including a near bankruptcy in 2020, but it has a fortress balance sheet and is buying back $1.4 billion of shares, about 20% outstanding. The company is positioned for the infrastructure and industrial "supercycles" Einhorn sees ahead, which could drive the stock to $115 from $46 today.
Versant Media, the legacy NBCUniversal cable business Comcast spun out, is "hated"and "super cheap" -- something Einhorn said he found "extremely sexy." Worries about cord-cutting have hit the company but cable brands CNBC, MSNow, and its live sports channels offer some insulation. Plus, it holds non-cable businesses such as Rotten Tomatoes and Fandango, and its digital business, almost a fifth of revenue, is seeing mid-single digit growth.
The market thinks it is a "melting ice cube and worthless," but Einhorn says ice "actually turns into a lot of fresh water." He sees the company generating enough free cash flow for share buybacks or bolt-on acquisitions and still sees a good operating business.
Victoria's Secret, Einhorn says, has been beaten up among a "woke" cultural backlash, botched acquisition, and tariffs. But the lingerie retailer's new management is "leaning back into the company's more sexy DNA." Victoria's Secret and Pink have started to show share gains even as they scale back on promotions, he noted. "Margins are lower than we would like but that's partly because of tariffs," Einhorn said, adding that he expects improvement next year with the business now stabilizing and revenue increasing.
Among other stock picks mentioned at the conference, Hiddenite Capital Partners' founder Ryan Packard sees AppLovin on track to becoming a $1 trillion company in seven years or less.
The company, which he described as the engine behind the ads as you scroll on your phone, generates $5.5 billion in revenue and $4 billion in free cash flow -- extraordinary for a company of its size, said Packard. He highlighted that the company has just a fraction of the potential market share, is expanding beyond mobile gaming into e-commerce, and using all its free cash flow for acquisitions. These are reasons Packard thinks the company can grow at 25% plus for the foreseeable future.
"It's the most pure play ad tech company and AI-generative software play today," Packard said, adding that he sees the stock doubling from its current $454 in the next three years.
General Equity Holdings' Andrew Bellas pitched Carvana, which he described as a rarity that is the biggest in the industry, the most profitable and yet has just 1% of market share in what is a fractured used car market. Happy consumers tend to refer Carvana to 10 other friends -- the benefits of which probably won't be fully seen until 2029 to 2031 as U.S. consumers tend to buy used cars every seven years.
Carvana underwrites its own loans, giving it an advantage to used car salesmen, reflected in its cars worth $500 to $1000 versus rivals after reconditioning, helped by its scale, Bellas said. Carvana processes a million cars a year versus a used car dealership that may have 200 on the lot. He sees 30% growth ahead for the stock, which he thinks could rise 10 times in five to 10 years.
Write to Reshma Kapadia at reshma.kapadia@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 13, 2026 13:01 ET (17:01 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments