VINY 2026 – Pzena’s Dan Babkes: Rare Opportunity To Buy An Oligopoly At A PE Below 4

At the Value Invest New York 2026 conference, Dan Babkes, co-portfolio manager at Pzena Investment Management, pitched a stock with big upside. Drawing on Pzena’s research-driven value framework, Babkes walked through a healthcare company facing industry-wide and company-specific challenges, exactly the kind of situation the firm works on identifying and exploiting.

Pzena Investment Management is a value-oriented firm launched in 1995, The firm focuses on companies with attractive long-term potential trading at prices significantly below intrinsic value. Babkes, who has been with Pzena for roughly a decade, co-manages the firm’s U.S. Large Cap, Focused Value, and Global strategies. Before joining Pzena, he was an analyst at the event-driven hedge fund LG Capital Management and an investment banker in Evercore Partners’ restructuring group. He began his investment career at the multi-billion-dollar hedge fund Chesapeake Partners after earning a BA cum laude from Amherst College and an MBA from the University of Pennsylvania’s Wharton School.

Pzena’s Value Framework: Four Criteria

Babkes outlined four criteria that define an ideal Pzena investment. First, it must be a good business. Second, something horrible must have happened to it; deep value stocks do not appear without a problem that causes valuation dislocations. Third, the firm must have conviction that the problem is temporary rather than permanent, the key difference between a value opportunity and a value trap. Fourth, the valuation today must be very cheap relative to the company’s normalized, long-term sustainable earnings power. This is how Pzena thinks about valuation: not price versus current earnings, but price today versus what the business can earn once conditions revert to normal.

Babkes argued that the company he pitched represents one of the clearest examples of all four criteria converging simultaneously.