Wednesday, June 24, 2015

What We're Reading ~ 6/24/15

A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan 
[Ben Carlson]

The loneliness of the short-seller [NYTimes]

Shorters needed [FT Alphaville]

Fat tails, thin ice [Jason Zweig]

What is staying power? [Fundoo Professor]

On the fear premium in stocks [Crossing Wall Street]

A look at Brookfield Asset Management [Brooklyn Investor]

Mobile is eating the world [Andreessen Horowitz]

Sketching out the internet of things trendline [Brookings]

The way humans get electricity is about to change forever [Bloomberg]

Cheap energy poised to shake up pipeline industry [WSJ]

Driverless cars + Uber = death of car insurance? [Value & Opportunity]

Insurers cannot be asleep at the wheel [Bank Underground]

Buyback extravaganza [Investor Field Guide]

Beware the stock buyback craze [WSJ]

Union Pacific: the railroad with better profit margins than Google [Fortune]

Ant Financial valued at $45 billion after fundraising [FT]

The CFA vs MBA decision [A Wealth of Common Sense]

Best age to go to business school [Bloomberg]

Lee Cooperman Dumps Sandridge Energy Position

Omega Advisors' Lee Cooperman has filed a 13G with the SEC regarding shares of Sandridge Energy (SD).  Per the filing, Cooperman no longer owns a stake in the company.

The filing was made due to activity on June 19th.  At the end of the first quarter, Cooperman previously owned over 24.3 million shares of SD.

Sandridge shares have collapsed even further since the first quarter and now Cooperman has exited the name entirely.  He also recently sold his position in Caesars Entertainment, another troubled stock.

Per Google Finance, Sandridge is "an oil and natural gas company. The Company operates in three business segments: exploration and production, drilling and oil field services, and midstream services. The exploration and production segment explores for, develops and produces oil and natural gas in the Mid-Continent. The drilling and oil field services segment performs services for third parties, including third-party working interests in wells that it operates. The midstream services segment is engaged in gas marketing. The Company focuses on exploration and production activities in the Mid-Continent region of the United States. It also operates businesses and infrastructure systems, including gas gathering and processing facilities, marketing operations, a saltwater disposal system, an electrical transmission system and a drilling rig and related oil field services business."

Carl Icahn Exits Netflix, Bearish on High Yield Bonds, Still Likes Apple

Today activist investor Carl Icahn tweeted that he has sold the rest of his stake in Netflix (NFLX).  This has been an extremely successful trade for him.  He later appeared on CNBC and noted that it was undervalued when he bought it, but now it has had a great run and their competitive moat isn't quite what it once was.

Additionally, Icahn noted his bearishness on the high yield bond market.  This is something he harped on in his Wall Street Week appearance as well.  In fact, he's concerned about the markets in general.

He tweeted: "I believe the market is extremely overheated - especially high yield bonds.  If more respected investors had warned about the market in '07, we might have avoided the crisis in '08."

The one shining light he continues to like is Apple (AAPL).  He still hasn't sold a share of his position.  He tweeted:

"Sold last of our $NFLX today.  Believe $AAPL currently represents same opportunity we stated NFLX offered several years ago."

Monday, June 22, 2015

Trian Fund Trims Wendy's Position

Nelson Peltz's activist firm Trian Fund Management has filed an amended 13D with the SEC regarding their stake in Wendy's (WEN).  Per the filing, Trian now owns 15.85% of the company with over 57.6 million shares

This is a reduction in their position size by over 7 million shares.  Trian sold shares on June 18th at a price of $11.37 in a private transaction with the company.  Peltz and his family also own additional WEN shares and were out trimming their positions as well.  This is not necessarily new news, as we previously highlighted how Trian was planning to reduce its WEN stake.

The filing notes that, "The number of shares Trian Group plans to sell is designed to result in at least a 20% reduction of the Trian Group's ownership of Common Stock in order to avoid adverse federal income tax consequences."

Per Google Finance, Wendy's is "the parent company of its wholly owned subsidiary holding company Wendy’s Restaurants, LLC (Wendy’s Restaurants). Wendy’s Restaurants is the parent company of Wendy’s International, LLC (Wendy’s), which is the owner and franchisor of the Wendy’s restaurant system in the United States. Wendy’s is the quick-service restaurant company in the hamburger sandwich segment. Wendy’s is primarily engaged in the business of operating, developing and franchising a system of distinctive quick-service restaurants serving food. Wendy’s Restaurants is the parent company of Wendy’s International, LLC (Wendy’s), which is the owner and franchisor of the Wendy’s restaurant system in the United States."

JANA Partners Goes Activist on ConAgra Foods

Barry Rosenstein's activist hedge fund JANA Partners has filed a 13D on shares of ConAgra Foods (CAG).  Per the filing, JANA now owns 7.2% of the company with over 30.86 million shares.

This is a newly disclosed stake for the fund as they did not own any shares at the end of Q1.  JANA's position includes options to purchase 19 million shares.  They bought July 2015 $33 and $34 calls and August '15 $34 calls.

The filing indicates that JANA "believes that the Issuer has significantly underperformed in shareholder value creation" and singled out the acquisition of Ralcorp.

JANA is prepared to nominate 3 members to the board: Rosenstein, Mr. Lawrence (former CFO of Unilever and General Mills), and Ms. Dietz (former CMO of Safeway).  JANA was out buying shares in April, May, and June at prices between $36.09 and 38.99

For more from this firm, head to Barry Rosenstein's recent appearance on Wall Street Week.

Per Google Finance, ConAgra Foods is a "packaged food company. The Company provides branded and private branded food in households, as well as commercial foods business serving restaurants and foodservice operations. The Company’s brands include Banquet, Chef Boyardee, Egg Beaters, Healthy Choice, Hebrew National, Hunt's, Marie Callender's, Orville Redenbacher's, PAM, Peter Pan, Reddi-wip, Slim Jim and Snack Pack, among others."

Lee Cooperman Dumps Caesars Entertainment Stake

Omega Advisors' Lee Cooperman has filed a 13G with the SEC regarding shares of Caesars Entertainment (CZR).  Per the filing, Cooperman no longer owns any shares of CZR and has exited his position entirely.

He previously reported ownership of over 7.33 million shares at the end of the first quarter.  The updated filing was made due to activity on June 5th.

CZR shares recently hit a 52-week low as the company's subsidiary, Caesars Entertainment Operating Company is in bankruptcy and is fighting with creditors and this could have implications for the parent company. 

Per Google Finance, Caesars Entertainment is "a holding and casino-entertainment and hospitality services company. The Company's facilities include gaming offerings, food and beverage outlets, hotel and convention space, and non-gaming entertainment options."