The Ben Graham Centre’s 2025 Value Investing Conference is in the books, bringing with it many excellent presentations. Below readers can find a brief summary of each presentation followed by a link to the full article. Note this article is free but some of the linked articles are paywalled.
Ben Graham Centre’s 2025 International MBA Stock-Picking Competition
Group A: No Buy on Hanesbrands Inc.
Kicking off with the International MBA Stock-Picking Competition, we had Group A, which presented an in-depth thesis for Hanesbrands. Consisting of Massiel Hahn Ceara, Mirtha Perez and Angel Cortina, the group looked into whether Hanesbrands still offers untapped value. Their final decision? No Buy.
Group A concluded that Hanesbrands can’t extract value because it depends too much on mass retailers. They also cited some operational risks, namely, inventory issues and volatility in cotton prices with no natural hedge.
Group A also highlighted Hanesbrands’ acquisition frenzy, in which it acquired seven brands between 2010 and 2018, financing them mostly with debt. Further, the synergies from those acquisitions failed, weighing on earnings. Steve Bratspies, who has been CEO since 2020 and plans to depart at the end of 2025, has made multiple promises that he failed to deliver on.
After citing multiple other issues, Group A advised investors that Hanesbrands was a “no buy.”
Group B: Watch but Don’t Buy Hanesbrands
Group B, which consisted of Karanvir Singh, Maha Amjad and Smarth Narula, offered a similar analysis of Hanesbrands’ business and position in the market but cited three potential pillars: its vertically integrated value chain, debt reduction target and disciplined capital allocation.
Like Group A, Group B felt that Hanesbrands depends too much on mass retailers, adding that the company lacks engagement on an emotional level and premium appeal. They noted that Hanesbrands’ current price is between their calculated net asset value and earnings power value, providing an insufficient margin of safety.
Thus, Group B advised investors to watch Hanesbrands but not to buy.
Group C: Buy Hanesbrands
Consisting of Alexander Daicar and Alexander Rogers, Group C noted that Hanesbrands doesn’t meet the criteria set for in traditional Ben Graham-style value investing. However, they felt that the company’s turnaround strategy and strong fundamentals were enough to justify their contrarian view of the stock.
Ben Graham International MBA Stock Picking Competition Results
Group A from Barna Management School was named the winner of the competition, followed by Group B from Ivey Business School and Group C from Queen’s University.
Ben Graham Centre’s 2025 Value Investing Conference
Josef Lakonishock, LSV Asset Management
Lakonishok argued that value isn’t dead, but rather, misunderstood, underutilized and now ripe with opportunity.
He noted that large caps are expensive, but small and mid caps are trading at meaningful discounts. For example, in Canada and the EAFE index, the top 500 “cheap” firms are trading at discounts of 30% to 40% of their historical medians, presenting attractive entry points for contrarians.
Unfortunately, the top 10 U.S. stocks continued to dominate in March, making up nearly 36% of the total market cap of the largest 500 companies — an all-time high that beat the share seen during the dotcom bubble. As a result, index investors are overexposed to a small number of mega-cap technology stocks.
Additionally, the top 10’s P/E ratio is now at 1.43x, far higher than the historical median of 1x. In the past, peaks like this one were succeeded by reversals. According to Lakonishok’s data, over the last 97 years, value stocks have outperformed following three years of underperformance, with a hit rate for positive returns of about 69% the following year and 76% over the next three years.
Lakonishok reported that as of February, the valuation spread between expensive and cheap stocks stood at 3.66x, and value stocks outperform 73% of the time the next year. He also explained that active management is alive, especially outside large caps.
Michael Mauboussin, Counterpoint Global
Mauboussin spoke about the importance of intangibles in modern value investing. He explained that intangibles have overtaken tangibles, with the former now 1.7x larger than tangibles as a share of GDP. However, most tools like P/E, EV/ EBITDA and price/ book were constructed based on the former reality that tangibles ruled.
According to Mauboussin, the key issue here is accounting. While tangible assets are capitalized and depreciated, most intangible assets like R&D are expensed immediately — despite the fact that they frequently provide long-term value. This distorts both earnings and book value.
Sharing Microsoft and Snowflakes as case studies, Mauboussin noted that Microsoft’s traditional ROIC is 30%, versus its adjusted ROIC, which capitalizes intangibles, of 24%. Snowflake’s traditional ROIC stands at -319%, versus its adjusted ROIC of 15%.
According to Mauboussin, who adapted them from Capitalism Without Capital, the four defining traits of intangible assets are scalability, sunk costs, meaning no resale value, spillovers, meaning they’re easy to copy, and synergies.
Mauboussin argued that earnings relevance for high intangible spenders has evaporated since the 1950s. While earnings once correlated well with stock prices, the connection for top spenders is nearly gone.
As many have pointed out, Mauboussin said the classic value factor of high book/ price has struggled recently. However, he added that research demonstrates that adjusting for intangibles improves the value signal. Mauboussin’s process involves starting with the price, backing out the implied expectations, and deciding whether they’re reasonable.
Adam Waterous, Waterous Energy Fund
Waterous talked about value investing in a commodity sector. He noted that most investors use a strategy he defined as “growth equity” in their approach to the commodity sector, especially oil and gas.
This approach involves backing management teams with technical experience, betting on the team’s ability to locate new resources. However, Waterous said this approach has resulted in decades of poor capital returns, with billions often wasted on seismic studies, land acquisition and drilling.
He argued that the oil and gas industry has gone through a structural rather than a cyclical shift. According to Waterous, new technologies have shifted the sector from “drilling location poor” to “drilling location rich.” The result is that the market is now oversupplied with drilling locations, which slashes the value of exploration.
Instead, Waterous chooses to buy quality rather than hype in the energy industry, utilizing a value-based strategy. Instead of trying to uncover new energy stocks, the Waterous Energy Fund (WEF) targets established, cash-flowing businesses that are known to have reserves and stable production, aiming to own them forever.
Waterous highlighted Strathcona Resources, the WEF’s flagship platform. Beginning with 5,000 barrels a day, they grew it to over 400,000 barrels a day. According to Waterous, Strathcona’s reserve life index ranks among North America’s top three, and its operating margins are best in class.
He feels EBITDA is a misleading metric in capital-intensive sectors, instead choosing to target sustainable free cash flow and return on equity. Since its inception, Strathcona has generated 21% compound annual intrinsic value per share growth, 16% compound annual growth in EBITDA per share, and 19% compound annual growth in reserves per share.
Waterous expects Strathcona to maintain a 24% ROE at $70 WTI oil as it continues to grow production. With 60% of current output coming from in-house wells and a 20-year reserve life in place, he thinks future returns look just as compelling as recent ones.
Scott Phillips, Templeton and Phillips Capital Management
Phillips explained why investors should never adopt any method permanently, highlighting Sir John Templeton’s success over 80% due to his evolving methods. Like Ben Graham, Phillips believes value lives in crises, saying that Mr. Market gave gifts during previous windows of turmoil. He added a key secret for investors: staying calm, doing their work and acting when others won’t during a crisis.
Phillips focuses on behavior instead of chasing information or building complex models. He believes the most durable source of alpha is investor psychology. Among the habits Phillips suggested were keeping a wish list of stocks you want to own, placing limit orders 20% below the market price, practicing daily exercise to maintain mental clarity, and avoiding the noise.
Pointing to a chart that compared the earnings yield of the S&P 500 with the 10-year Treasury yield from 1995 through 2025, Phillips pointed out that the S&P earnings yield has dropped under the Treasury yield, which is a classic sign the market is overvalued.
However, based on the equal-weighted S&P 500, U.S. small caps, Europe and emerging markets, the earnings yield remains well above Treasury yields. Thus, Phillips sees opportunities — but not in the Magnificent Seven.
Finally, he advised investors to look where no one else is looking, highlighting HDFC bank in India, which trades at 10x earnings with over 4% net interest margins and a projected 16% growth rate in book value. On the other hand, Bank of America trades at the same multiple while earning half the margin and growing more slowly.
Robert Gill, Fairbank Investment Management
Gill highlighted Fairbank’s investment philosophy, focusing on quality-first value investing while utilizing internal research and a bottom-up strategy. The firm starts with about 4,000 companies with about 400 research candidates, then filters them for strong balance sheets, track records of longer than 10 years, and consistent profitability.
Next, Fairbank applies valuation filters to focus its resources on quality businesses trading at attractive prices. According to Gill, quality companies have tangible characteristics in the form of high and consistent ROE and ROIC relative to WAAC, strong financial strength and low debt, free cash flow generation, and scalability and expansion potential. He also said quality businesses have these intangible assets: ethical, experienced management, competitive advantages, and strong corporate governance.
Fairbank calculates intrinsic value by starting with normalized ROE over multi-year averages, then multiplies it by book value to get the earnings power. Next, the firm applies a conservative fair multiple and crosschecks with P/E, P/B, NAV and DCF estimates.
Turning to some examples, Gill highlighted The Northwest Company as a buy. It’s the second-oldest Canadian company and a virtual monopoly in isolated communities. Its ROE is high at more than 20%, and it has a robust balance sheet with consistent FCF. Fairbank bought the stock at $18.47, and it’s now trading at over $52 a share. Further, Northwest has a strong dividend yield of 4.5%.
On the other hand, Gill said Curaleaf was a position they sold. The company had negative ROE and FCF and massive share dilution. Fairbank sold it at $8 a share, and it’s now trading at around $1.25.
Tim McElvaine, McElvaine Investment Management
McElvaine kicked off his presentation with the circle of competence, which he thinks is necessary but not sufficient. He emphasized thinking about where investors have a competitive advantage in buying a stock. McElvaine seeks accidents or dislocations and advised investors to uncover situations that both fall in their circle of competence and where the seller doesn’t care about the price.
He explained that it’s not very unusual for sellers to not care about the price. McElvaine cited the example of when large companies spin off so-called “ugly ducklings” or when bad news happens. He added that value investors might be able to take advantage of these types of situations in which pessimism is maximized.
McElvaine starts by looking for an accident and competitive advantage alongside alignment of interest by management. He also seeks what he called “anti-fragility.” For example, Tourmaline Oil was the best-performing stock during the oil and gas crisis, and for good reason.
McElvaine pointed out that it had a “fabulous” balance sheet before the crisis and exited it a much better company due to alignment of interest and the ability to take advantage of things that don’t normally come up. He buys companies based on assets and sells on earnings.
Lorne Steinberg, Lorne Steinberg Wealth Management
Steinberg pointed out that there are many approaches to value investing. As a result, he knows it when he sees it. He also said growth and value are two sides of the same coin, as investors have to figure out a company’s quality and estimate its future cash flows. Steinberg also said investors have to establish a company’s value.
One of his core principles is strong balance sheets, which generally means free cash flow. Steinberg also believes size counts in a good way and advised investors not to meet with large-cap managers. He also looks at management’s track record, noting that he can’t evaluate someone in a one-hour meeting. Finally, Steinberg tries to see if a company is cheap enough to buy.
He likes Allstate because of its simplicity and the repricing of its products annually. Steinberg also noted that Allstate has been allocating capital wisely.
He also likes RBC, pointing to its “phenomenal” long-term growth in a market that’s highly regulated. Steinberg also pointed out that RBC stock has beaten the S&P 500 over 50 years.
On the other hand, he highlighted J.C. Penney as a stock that didn’t turn out well for them. Steinberg’s thesis was that its real estate accounted for almost all of its share price, so he was getting the rest of the business essentially for free.
Later, activist investor Bill Ackman bought a significant position in J.C. Penney, bringing in Ron Johnson as CEO. Their plan was to transform the aging retailer’s business model, turning it into a type of supermarket. Steinberg “drank the Kool Aid” based on a presentation and set of charts, but he said Ackman and Johnson “proceeded to destroy the company.”
He believes a key time to sell is if a company is changing radically because it’s not the company he originally bought. In fact, Steinberg sold Couche-Tard, one of their best Canadian performers because of its bid to buy 711, which involved borrowing $40 billion.
Desmond Kingsford, Highwood Value Partners
Kingsford spoke about uncovering the best opportunities. To look for that big fish, he started with a 15-year study of about 13,000 companies across developed markets. Excluding unprofitable show-me stories that would not pass his initial screen, Kingsford narrowed his universe to around 8,000 businesses.
Next, he targeted those that had tripled in value over any five-year rolling period. That slashed the universe to about 140 to 160 companies per cohort, or about 3% of the investable universe.
Kingsford found that 70% of the businesses that had tripled were outside North America, while just 4% were in Canada. Europe had the highest base rate of around 4.5%. Breaking down the data by market cap, Kingsford found an even more compelling pattern. Just 4% of 3x winners were large caps, while 92% were small caps. Small caps still had a better hit rate after correcting for the reality that there are more small caps than large caps.
Next, Kingsford filtered for some value-type conditions, narrowing to companies trading below 10x EV/ EBITD and those that had high insider ownership, reasonable balance sheets, and high returns on capital. According to Kingsford, applying those filters more than doubled the success rate.
Sharing Poland-based Auto Partner as a case study, he said it was a $155 million company with 20% to 30% annual revenue growth in 2020. At that time, it also had a strong balance sheet and great returns on capital. However, it was trading at 10x earnings and didn’t have much institutional coverage. In the next five years, Auto Partner stock quadrupled on the back of strong execution, a growing Polish auto market, and a dominant position in that market.
Based on his analysis of over 50 case studies, Kingsford shared five patterns of mispricing: undiscovered gems, undiscounted capital allocation, industry tailwinds, outstanding execution, and geographic expansion.
He also said five key business models repeatedly appear among the top performers: installed-base models with aftermarket revenue, discount-based models with scale economies, brand pricing power, two-sided networks and franchises. Finally, Kingsford identified a single common trait among the big fish: they have owner-operator management.
Ajit Dayal, Quantum Advisors India
Dayal offered some value ideas in the rapidly growing Indian market. Highlighting the potential of the market in India, he said the market doesn’t always reward knowledge and experience in determining intrinsic value. According to Dayal, a key problem is patience, or whether investors and management or founders will be willing to patiently wait on your thesis based on value.
He noted that India’s GDP growth was the highest during periods when it was led by coalition governments. According to Dayal, the Indian economy could approach the size of the U.S. economy in a couple decades.
Quantum Advisors approaches intrinsic value by trying to determine the value of the investment in two years, then combining that with a predetermined expected rate of return. That includes a 4.5% equity risk premium and risk-free rate of 7%.
According to Dayal, successful value investors in India are capable of determining the mismatch between what they believe is the implicit price and what the market says the price is. Additionally, he said they have to deal with the issues surrounding the Indian government and companies that can sometimes be misleading. Dayal warned that these risks can eliminate a sizable chunk of the returns investors would otherwise expect.
