Sohn Conference

Hedge fund managers at Sohn offer their top market picks

Picks from 'first wave' at Sohn Conference

The annual Sohn conference brings together some of the leading hedge fund managers and investors in the world to talk about their top market picks.

It's all part of an effort to raise money in the childhood fight against cancer. Sohn is one of the most hotly anticipated hedge fund events of the year and is held in Geffen Hall at New York's Lincoln Center.

The picks from some of the industry titans:

John Khoury, Long Pond Capital

Long D.R. Horton (DHI)

D.R. Horton is moving from an "asset-heavy to asset-light business model," he said.

The homebuilder also specializes in the "healthiest" part of the market, entry-level homes with an average price of around $300,000. He said the company is moving to become a "pure play home manufacturer," which will benefit its free cash flow generation.

D.R. Horton shares were up 0.8 percent as of early afternoon trading.

Li Ran, Half Sky Capital

Long GrubHub (GRUB)

"GrubHub is the leading online food delivery platform in the U.S," she said.

The hedge fund manager said the company has a large attractive market, a positive economic model and a successful "proven" concept. She noted's success in Europe shows the potential for GrubHub in North America. Ran also is optimistic about GrubHub's restaurant software offering.

GrubHub shares had been trading 1.8 percent higher.

Glen Kacher, Light Street Capital

Long Palo Alto Networks (PANW)

"A cybersecurity war is being fought right now," Kacher said. Palo Alto Networks has the "leading hybrid security platform … [The company] has an attractive valuation."

Kacher said Palo Alto doubled its market share in the firewall security business over the last four years. He is optimistic over the company's subscription revenue business, which will allow it to raise its "recurring revenue" and profit margins.

The pick is important, he said, because a cyber attack could cause economic damage worse than the financial crisis.

Shares were 0.8 percent lower in afternoon trading.

Scott Ferguson, Sachem Head Capital

Long Whitbread PLC (LON:WTB)

Whitbread is a "classic sum of the parts story," Ferguson said.

The company owns Premier Inn, the dominant UK discount hotel chain, and Costa Coffee.

"Premier Inn is a high quality asset. [It] is defensive business that should outperform in a recession," he added.

The investor said Whitbread trades at a "steep discount" relative to its competitors. Ferguson said the company should spin off Costa Coffee to create value.

Shares were little changed on the London market Monday but are up 5.8 percent year to date.

John Pfeffer, Pfeffer Capital

Long bitcoin

"Bitcoin is the first viable candidate to replace gold the world has seen," Pfeffer said. "Most [other] cryptoassets out there are bad bets."

The investor noted how bitcoin has the longest track record, biggest financial infrastructure and highest activity among cryptocurrencies.

"The more economic activity is denominated in that currency, the higher the value," he said.

Nathaniel August, Mangrove Partners

Short Eros International (EROS)

August raised accounting issues at the company and said that its revenue growth has been lackluster.

The company is a movie distributor of Indian films and content along the lines of Netflix in the U.S.

He and the company have been in a long-running dispute. Eros has sued Mangrove and other short-sellers, alleging that they are engaged in a "multi-year disinformation campaign."

"I got this f------ thorn in my side," August said to open his presentation. "Apparently they don't think very highly of me either, because they sued me."

WATCH: Top picks from Sohn 2017

Top picks from Sohn 2017