Thursday, February 2, 2012

Hedge Fund Viking Global Discloses New TripAdvisor (TRIP) Stake

Andreas Halvorsen's hedge fund firm Viking Global just now filed a 13G with the SEC regarding shares of TripAdvisor (TRIP).

Viking has disclosed a 6.0% ownership stake in TRIP with 7,200,112 shares due to portfolio activity on January 23rd. It seems that a sizable portion of their position is held in their Viking Global Equities III investment vehicle.

We've examined the bull and bear investment theses for Expedia (EXPE) and TripAdvisor (TRIP) in a prior issue of our Hedge Fund Wisdom newsletter.

New Position... But How New?

It's particularly difficult to say when and by how much Viking was adding to this position due to a few factors. Firstly, TripAdvisor completed its spin-off from Expedia (EXPE) on December 20th, 2011. Right before this, EXPE completed a one-for-two reverse stock split and then shareholders became entitled to receive one share of TRIP and one share of EXPE for every two shares of the old EXPE entity owned.

Viking Global did not own shares of Expedia as of the end of the third quarter (September 30th, 2011). Also, due to the fact that SEC filings are made on a delayed basis, Viking won't have to disclose their 2011 year-end positions until February 15th. As such, it's entirely possible that they bought shares of EXPE in December and received TRIP shares in the spin-off.

However, something also worth considering is the fact that Viking did not cross a regulatory threshold required to file with the SEC until January 23rd. At the very least, that means that they purchased some TRIP shares recently. And theoretically, they could have simply bought their entire position of the separate TRIP entity post spin-off.

Either way, Viking's position in TripAdvisor is a new holding for them because they hadn't disclosed a position in Expedia or TripAdvisor prior to now.

But given the opacity surrounding the situation, it's impossible to know exactly when they were buying. And that certainly makes a difference given the fact that shares of TripAdvisor began trading at around $24 and are currently trading 43% higher.

TripAdvisor Company Background

Per Google Finance, TripAdvisor is "is an online travel research company, enabling users to plan and have a trip. TripAdvisor features reviews and advice on hotels, resorts, flights, vacation rentals, vacation packages and travel guides. TripAdvisor’s travel research platform features reviews and opinions from its community of travelers about destinations, accommodations (hotels, bed and breakfasts, specialty lodging and vacation rentals), restaurants and activities worldwide, through its TripAdvisor brand."

To see the bull and bear case on Expedia and TripAdvisor, sign-up for our premium Hedge Fund Wisdom newsletter and download the old issues.

Dan Loeb's Third Point: Top Holdings & Latest Exposures

Dan Loeb's hedge fund firm Third Point LLC returned 3.8% in January to start off 2012. Their offshore fund currently manages $4.59 billion and has seen an annualized return of 17.5%.

Third Point's Top Holdings (as of 1/31/12)

1. Yahoo! (YHOO)
2. Gold
3. Eksportfinans ASA
4. Delphi Corp (DLPH)
5. Ally Financial

There are some notable changes to the upper echelon of this hedge fund's portfolio since we last looked. Eksportfinans ASA has emerged as a meaningful position and Ally Financial (the former GMAC entity) has entered their top 5 stakes. Gold and Yahoo remain top holdings and you can see Third Point's bull case for YHOO here.

One former top holding now notably absent from their top positions list is Sara Lee (SLE). While one could assume they still own it given their 'attractive assets' thesis, it's hard to say if they reduced exposure to the name or if they merely added to other positions.

Also worth highlighting: They've held a stake in Delphi post bankruptcy and the company began trading again in the fourth quarter of 2011 with numerous prominent hedge funds as owners. However, one notable holder (Paulson & Co) has apparently reduced its position size substantially.

In terms of attribution, Third Point saw gains from their stakes in Delphi, gold, UniCredit Spa, Technicolor, and Eksportfinans. They lost money last month from positions in Yahoo, and four undisclosed short positions (2 consumer shorts, 1 communications short, and 1 healthcare short).

Third Point's Net Exposure

After spending much of last year with low net exposure to equities (as low as 15% net long), Third Point has slightly ramped exposure back up. They are now 44.8% long and -16.6% short, leaving them 28.2% net long equities. Their largest exposure comes via technology where they are 12.6% net long (most of which is their activist stake in Yahoo).

In credit, Third Point is 15.6% net long the asset class via 9.6% net long exposure to distressed, 8.7% net long exposure to performing, 14.5% net long exposure to asset backed securities (ABS) and -17.2% net short government securities.

Geographically speaking, Loeb's hedge fund is 58% net long the Americas, -4% net short EMEA, and -3% net short Asia.

For thoughts on their portfolio, head to Third Point's Q3 letter. We'll be sure to post up their Q4 letter when it is released.

Confidence Game Trailer: Documentary About Bear Sterns' Final Week

Below is the Confidence Game movie trailer, a documentary about the final week of Bear Stearns before its collapse during the financial crisis.

The film is directed by Nick Verbitsky and features interviews with former employees, whistleblowers, as well as Bryan Burrough, William D. Cohan, and Andrew Ross Sorkin.

Here's the Confidence Game trailer video (email readers click on the link to come watch):

Be sure to also check out previews of other financial films like the Margin Call movie trailer and the Chasing Madoff trailer.

Tuesday, January 31, 2012

Steve Cohen's SAC Capital Boosts Positions in American Eagle Outfitters (AEO) & Peet's Coffee (PEET): 13G Filings

Steve Cohen's hedge fund SAC Capital filed two 13G's with the SEC regarding transactions in American Eagle Outfitters (AEO) and Peet's Coffee & Tea (PEET) this month.

American Eagle Outfitters (AEO)

Per their 13G filing, SAC increased its position size by 1056% since the close of the third quarter. SAC Capital now owns 9,418,880 shares of AEO, or 4.9% of the company.

This is up massively from the 814,560 shares they owned at the end of Q3. This 13G filing was triggered due to activity on January 18th.

Per Google Finance, American Eagle Outfitters is "is an apparel and accessories retailer that operates more than 1,000 retail stores in the United States and Canada, and online at Through its family of brands, American Eagle Outfitters, Inc., offers clothing, accessories and personal care products. Its online business, AEO Direct, ships to 76 countries worldwide. The Company operates under the American Eagle, aerie by American Eagle, and 77kids by american eagle brands."

Peet's Coffee & Tea (PEET)

SAC Capital owns 740,074 shares of PEET according to their latest filing. They've increased their position size by 32,516% since the end of the third quarter as they only owned 2,269 shares back then. Now, SAC owns 5.7% of the company due to portfolio activity on January 13th.

This stake is intriguing because Cohen mentioned that fellow beverage brewer Green Mountain Coffee Roasters (GMCR) was one of his favorite plays at this time last year. However, over the course of 2011 his firm gradually cut exposure to the name. Additionally, shares of GMCR have been attacked by Greenlight Capital's David Einhorn (see his short thesis on GMCR here). So it will be interesting to watch shares of PEET in the future.

Per Google Finance, Peet's Coffee & Tea is "is a specialty coffee roaster and marketer of fresh roasted whole bean coffee and tea. The Company sells its Peet’s brand coffee through multiple channels of distribution, including grocery stores, home delivery, office, restaurant and foodservice accounts and Company-owned and operated stores in six states."

Corsair Capital's Investment Thesis on Aperam

Earlier today we posted up hedge fund Corsair Capital's Q4 letter. We're also posting up an addendum from their letter: their investment thesis on Aperam (AMS:APAM), a core holding.

In summary, the hedge fund likes this stainless steel manufacturer as it "offers investors over 200% potential upside with limited downside given its low leverage with no near term maturities, high dividend yield, strong cross-cycle earnings power, and credible cost-cutting program."

The company was spun-off from Arcelor Mittal (MT) and Corsair thinks APAM could trade between $38 and $63, and in an extreme scenario as high as $88.

Embedded below is Corsair's investment thesis on Aperam (email readers click to come read it):

And if you missed it earlier, be sure to read Corsair's Q4 letter.

We've also posted up other hedge fund letters recently: Greenlight Capital and East Coast Asset Managment.

Corsair Capital Talks Lyondell Basell, Six Flags & Innophos: Q4 Letter

Jay Petschek and Steve Major's hedge fund Corsair Capital is out with their Q4 letter. For 2011, the hedge fund finished -3.7% and since inception in January 1991, the firm has seen a compound net annual return of 14.4%.

They note that 2011 was a difficult year because, "correlations between stocks and most asset classes were near record highs, seemingly subject to the whims of investors choosing to either put 'risk on' or to take 'risk off.' "

Corsair also touches on some of their positions noting that Lyondell Basell (LYB) saw strong insider buying during the stock's dip. They continue to also like Neo-Material Technologies (TSE:NEM) as think it's worth $15+ (it currently trades around $8.30).

The hedge fund likes that Six Flags (SIX) has refinanced its debt and announced a new $250mm buyback plan. Lastly, Corsair fancies Innophos Holdings (IPHS) as "the company trades at under 10x our cash estimate for 2012 and we continue to believe it is worth 15x given the quality of its business model and clean balance sheet." We've previously highlighted Corsair's thesis on Innophos.

Embedded below is Corsair Capital's Q4 letter (email readers click the link to come view it):

We've also posted up their new write-up of a core investment: Corsair's thesis on Aperam (APAM NA).