Friday, February 10, 2012

Phil Falcone's Harbinger Capital Scooping Up Shares of Spectrum Brands (SPB)

Phil Falcone's hedge fund Harbinger Capital Partners has been on a buying spree as of late. Per an amended 13D with the SEC, Harbinger's various entities combined now own 55.9% of Spectrum Brands (SPB) with 28,988,997 shares.

While the Harbinger Capital Partners Master Fund only owns 180,189 shares, the overwhelming majority of the position is owned by Falcone's Harbinger Group (HGI).

Overall, Harbinger's entities have scooped up 768,850 shares since January 20th. This most recent disclosure was made due to trading activity on February 8th. The majority of Harbinger's recent purchases have come at a price of around $29.50 per share.

Harbinger's History With SPB

So while this offers investors a somewhat rare chance to buy at prices right alongside a hedge fund, just know that they've built their stake up over time and these most recent shares are just a drip in the their bucket full of shares.

We originally detailed Harbinger's original acquisition of SPB shares back in August 2009 when the company emerged from reorganization relief under Chapter 11.

The hedge fund manager also explained Harbinger's Spectrum Brands thesis at a hedge fund best ideas conference back in September of last year.

About Spectrum Brands

Per Google Finance, SPB is "a consumer products company. The Company manufactures and markets alkaline, zinc carbon and hearing aid batteries, herbicides, insecticides and repellants and specialty pet supplies. Its consumer products have positions in seven product categories: consumer batteries; pet supplies; home and garden control products; electric shaving and grooming products; small appliances; electric personal care products, and portable lighting."

While Harbinger certainly owns a huge stake in Spectrum, keep in mind that this hedge fund has made a much bigger bet on a 4G wireless venture: LightSquared.

Alan Fournier's Pennant Capital Buys More Huntington Ingalls Industries (HII)

Alan Fournier's hedge fund firm Pennant Capital filed an amended 13G with the SEC regarding its position in Huntington Ingalls Industries (HII). Per the new filing, Pennant now owns 8.91% of HII with 4,347,499 shares.

This marks a boost of almost 59% in their position size due to trading activity on January 31st, 2012.

Pennant started a new stake in Huntington Ingalls in late November of last year, originally purchasing 2,734,343 shares and they've clearly continued to build their position.

About Pennant Capital

Alan Fournier founded Pennant after working at David Tepper's Appaloosa Management where he was responsible for the global equity portfolio. He graduated from Wentworth Institute of Technology's Mechanical Engineering program.

About Huntington Ingalls Industries

Per Google Finance, HII "designs, builds and maintains nuclear and non-nuclear ships for the United States Navy and Coast Guard, and provides aftermarket services for military ships around the globe. HII’s business divisions are Ingalls Shipbuilding and Newport News Shipbuilding (NNS). Ingalls Shipbuilding has the development and production of warships for the surface Navy fleet, United States Coast Guard, United States Marine Corps, and foreign and commercial customers."

Seth Klarman's Baupost Group Drastically Reduces PDL BioPharma (PDLI) Stake

Seth Klarman's hedge fund firm Baupost Group filed an amended 13G with the SEC regarding their position in PDL BioPharma (PDLI). The new filing shows Baupost has a 2.15% ownership stake in PDLI with 3,000,000 shares.

This is a decrease of almost 81% in their position size since the end of the third quarter. This is obviously a drastic reduction and comes in stark contrast to the buying of PDLI shares they were doing last July.

Baupost made the filing due to trading activity on January 31st, 2012.

Per Google Finance, "PDL BioPharma is engaged in the management of its antibody humanization patents and royalty assets, which consist of its Queen et al. patents and license agreements with pharmaceutical and biotechnology companies. The Company receives royalties based on these license agreements on sales of a number of humanized antibody products marketed and also may receive royalty payments on additional humanized antibody products launched before final patent expiry in December 2014."

Thursday, February 9, 2012

Bill Ackman & Pershing Square's Presentation on Canadian Pacific (CP)

Below is Bill Ackman & Pershing Square Capital's presentation on Canadian Pacific (CP), entitled 'The Nominees for Management Change.' As we've detailed, Ackman has gone activist on CP and is seeking to shake-up management.

In the presentation, the hedge fund highlights their past success with General Growth Properties (GGP), JC Penney (JCP), and more. Currently, CP is Pershing's second largest investment as they own 14.2% of the company.

With their proxy contest, they highlight how CEO Fred Green has underachieved and how Hunter Harrison would have been a better selection.

They also highlight the economic rationale for such a change: "Canadian Pacific is 70% the size of Canadian National, yet has an enterprise value 40% as large, due to its inferior profitability and asset utilization."

Embedded below is Ackman & Pershing's presentation on CP (email readers click to view):

For other investment theses from this hedge fund, you can view Pershing's presentation on Fortune Brands Home Security as well.

Bridgewater's Ray Dalio Interview With Charlie Rose

Late last year Ray Dalio, the founder of hedge fund behemoth Bridgewater Associates, sat down for his first interview with Charlie Rose. He talked about Bridgewater's culture, investment process, and more.

Embedded below is Ray Dalio's interview with Charlie Rose for those who may have missed it (email readers click the link to watch):

We've posted up other resources from Bridgewater such as Ray Dalio's principles.

What We're Reading ~ 2/9/12

Paulson & Co pushes for Hartford breakup [FINalternatives]

Credit Suisse global investment returns yearbook 2012 [Abnormal Returns]

8% annual return target? Try 4% [World Beta]

How to pick mutual funds [World Beta]

No one is ever wrong anymore [Reformed Broker]

Performance for pay: Is your CIO cost effective? [Skorina Letter]

Tepper protege forges new fund [Absolute Return/Alpha]

Warren Buffett on why stocks beat gold & bonds [Fortune]

Successful short selling: an effective but rare skill [FT]

Endowments slow to recover from 2008 crisis [BostonGlobe]

Goldman says L/S equity should not be ignored [COOConnect]

Estimize: new platform providing buy-side analyst estimates [IBD]

The housing bottom is here [Calculated Risk]

The value trap of deeply cyclical stocks [Institutional Investor]

10 reasons why investing in actively managed funds is a losers game [Stockopedia]

The restaurant investor [MaxCapital]

T2 Partners January Letter: Portfolio Update

It's been a while since we've checked in on Whitney Tilson and Glenn Tongue's hedge fund T2 Partners so here is their January letter to investors. While they had a horrible year last year (-24.9%), they were up 12.6% in January.

The letter mentions some of their longs: Pep Boys (PBY), Goldman Sachs (GS), Iridium (IRDM), Resource America (REXI), Dell (DELL), Howard Hughes (HHC), Citigroup (C), and Microsoft (MSFT).

Also, they mention they are long SanDisk (SNDK) and bought more after the company provided weak guidance.

T2 Partners also revealed some more of their shorts: Lululemon (LULU), Interoil (IOC), ReachLocal (RLOC), First Solar (FSLR), Green Mountain Coffee Roasters (GMCR), ITT Educational (ESI), and (CRM).

Their letter also provides more in-depth updates on their positions in Netflix (NFLX) and J.C. Penney (JCP) which you can read below: T2 Partners January letter

For more from this hedge fund, you can view T2's presentation on Berkshire Hathaway and JCP.

And then for presentations from other funds, we posted up Bill Ackman on Canadian Pacific today too.

Ken Griffin's Citadel Boosts Constant Contact (CTCT) Stake

Ken Griffin's hedge fund firm Citadel recently filed a 13G with the SEC on shares of Constant Contact (CTCT). Citadel now shows a 3.8% ownership stake in CTCT with 1,138,617 shares.

This is an increase in their position size by 1,543% since the end of the third quarter when they only owned 69,271 shares. The regulatory filing was made due to portfolio activity on January 31st, 2012.

Per Google Finance, Constant Contact is "is a provider of on-demand e-mail marketing, social media marketing, event marketing and online survey solutions for small organizations, including small businesses, associations and non-profits. The Company’s e-mail marketing product allows customers to create, send and track e-mail marketing campaigns. Its social media marketing features allow customers to manage and optimize their presence across multiple social media networks."

Balyasny Asset Management Starts Shaw Group (SHAW) Position

Dmitry Balyasny's hedge fund firm Balyasny Asset Management just filed a 13G with the SEC regarding shares of Shaw Group (SHAW). Per the filing, they now own 5.5% of SHAW with 3,583,894 shares.

This is a brand new position for the hedge fund firm as they did not own shares as of the close of the third quarter. Their 13G filing was made due to trading activity that breached the regulatory threshold on January 19th, 2012.

Per Google Finance, Shaw Group is " is a provider of technology, engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation and facilities management services to a diverse client base that includes multinational and national oil companies and industrial corporations, regulated utilities, independent and merchant power producers, and government agencies."