Hedge Fund Tontine Associates Updates Stakes Via 13G Filings ~ market folly

Wednesday, February 11, 2009

Hedge Fund Tontine Associates Updates Stakes Via 13G Filings

Well, you might want to get used to all the Tontine Associates updates. After all, they are closing two of their hedge funds after having a very rough year where one of their funds ended up -91.5%, as noted in our year end 2008 hedge fund performance list. So, such liquidations are the reason behind the constant portfolio shuffling and SEC filings. As we've detailed before, Tontine has recently sold out of 15 positions, as well as filed amended 13D's to many of their holdings, and then they most recently sold out of 9 more positions.

This time around, they were amending various 13G filings to companies that they still hold a position in. For the most part though, those positions are now pretty small compared to what they used to be.

Firstly, in an amended 13G filing, Tontine is showing a 7.59% ownership stake in Patapsco Bancorp (PATD) with 141,385 shares.

Secondly, they also now show a 7.55% ownership stake in PVF Capital (PVFC) with 587,233 shares.

Thirdly, they have a 1.04% ownership stake in Beazer Homes (BZH) with 408,200 shares.

They also now show a 0.47% ownership stake in Trinity Industries (TRN) with 370,751 shares.

Next, Gendell and company also filed an amended 13G on AMR Corp (AMR) disclosing a 0.15% ownership stake with 430,072 shares.

Sixth, they show a 0.03% ownership stake in Goodyear Tire & Rubber (GT) with 61,200 shares.

Additionally, they disclosed an updated 0.44% ownership stake in Ameron (AMN) with 40,000 shares.

Lastly, Tontine now shows a 0.09% ownership stake in Hexcel (HXL) with 85,255 shares.

You can also view their entire portfolio here. Do note that the next update of portfolio holdings (13F filing) is due in a week or so, and their portfolio will undoubtedly change again as they continue to liquidate positions as they close down 2 of their funds.

If you're unfamiliar with Tontine, they specialize in macro investing and take very large, concentrated positions in companies he feels will benefit from those macro themes. Additionally, he will take on an activist role when necessary, to ensure shareholder returns. The fund has posted returns in excess of 100% in both 2003 and 2005. Conversely, this year has been the year from hell for Tontine. Recently, they announced they would be closing two of their hedge funds: Tontine Capital LP and Tontine Capital Partners LP. Two of Tontine's funds will remain open: Tontine-25 and Tontine Financial.

It has definitely been an astonishing year for Gendell, whose Tontine firm is named after an annuity invented by Lorenzo de Tonti. In such an annuity, investors contribute and collect dividends. As investors each die off, their share is left to the remaining partners. Therefore, the last man alive receives all the money. Gendell's desire is clearly to be that 'last investor' remaining. Such a goal becomes slightly ironic when you consider his firm suffered monumental losses and almost 'died' this past year. Gendell explains the turmoil they faced in his October letter to investors (.pdf format).

Taken from Google Finance,

Patapsco Bancorp, Inc. "is the holding company of The Patapsco Bank (the Bank). The Bank is a commercial bank operating through five full-service offices located in Dundalk, Parkville, Carney, Glen Arm and Baltimore City, Maryland. The primary business of the Bank is to attract deposits from individual and corporate customers, and to originate residential and commercial mortgage loans, commercial loans and consumer loans, primarily in the Greater Baltimore Metropolitan area."

PVF Capital Corp. (PVF) "is the holding company that operates through its principal subsidiary, Park View Federal Savings Bank (Park View Federal or the Bank). Park View Federal is a federal stock savings bank operating through 17 offices located in Cleveland and surrounding communities."

Beazer Homes USA, Inc. (Beazer) is "a diversified homebuilder. It operates in 17 states. The Company’s homes are designed to appeal to homeowners at various price points across various demographic segments and are generally offered for sale in advance of their construction."

Trinity Industries, Inc. (Trinity) is a "multi-industry company that owns a range businesses, which provide products and services to the industrial, energy, transportation and construction sectors."

AMR Corporation (AMR) "operates primarily in the airline industry through its principal subsidiary, American Airlines, Inc. (American). American is a scheduled passenger airline."

The Goodyear Tire & Rubber Company (Goodyear) is "a manufacturer of tires and rubber products, engaging in operations in most regions of the world. The Company, together with its United States and international subsidiaries and joint ventures, develops, manufactures, markets and distributes tires for most applications."

Ameron International Corporation (Ameron) is "a multinational manufacturer of engineered products and materials for the chemical, industrial, energy, transportation and infrastructure markets."

Hexcel Corporation (Hexcel) is "an advanced composites company. Hexcel develops, manufactures and markets lightweight, high-performance composites, including carbon fibers, reinforcements, prepregs, honeycomb, matrix systems, adhesives and composite structures, for use in the commercial aerospace, space and defense and industrial applications."

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