Stephen Mandel's Lone Pine Capital Files 13G on Smithfield Foods (SFD) ~ market folly

Monday, June 22, 2009

Stephen Mandel's Lone Pine Capital Files 13G on Smithfield Foods (SFD)

In a 13G filing made with the SEC due to activity on June 9th, 2009, Lone Pine Capital has disclosed a 7.7% ownership stake in Smithfield Foods (SFD). This is a brand new position for Stephen Mandel's hedge fund as they now own 11,116,850 shares. They previously did not show a position in SFD when we looked at their entire portfolio, so they have just recently entered the position over the past 2 months or so. In terms of other big bets Lone Pine has made recently, we saw that Mandel likes Strayer Education. He presented this choice at the 2009 Ira Sohn Conference where numerous hedge fund managers each presented an investment idea.

His $7 Billion fund has returned over 25% annually since its inception in 1997, but had a rough year in 2008. The term 'lone pine' comes from Mandel's days at Dartmouth College, where the school has a historical lone pine tree. He is well versed in the ways of finding undervalued companies and he typically likes to sniff out solid companies with good management that are trading below their intrinsic value. In Alpha's 2009 hedge fund rankings list, Lone Pine was ranked 21st.

Taken from Google Finance,

Smithfield foods is "a hog producer, and pork processor. The Company conducts its business through five segments: Pork, International, Hog Production (HP), Other and Corporate, each of which comprises a number of subsidiaries. The Pork segment produces a variety of fresh pork and packaged meats products in the United States and markets them nationwide and to a number of foreign markets, including China, Japan, Mexico, Russia and Canada."

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