Friday, December 17, 2010

Why Whitney Tilson is Short Netflix (NFLX)

Whitney Tilson has gotten his ass handed to him in his short of Netflix (NFLX). And, he'll be the first to tell you that. However, that hasn't rattled his conviction as he thinks the company is now trading at ridiculous valuations. In support of his argument, he's recently released an in-depth bear case for NFLX entitled, you guessed it: "Why We're Short Netflix."

We've covered T2 Partners' portfolio in-depth before and Netflix is now one of their main short positions. NFLX is the definition of a momentum stock. It has made the longs copious amounts of money and ripped the collective faces off of short sellers. Given the beating Tilson and his hedge fund T2 Partners have taken, why persist? He writes,

"We acknowledge that the company offers a useful, attractively-priced service to customers, is growing like wildfire, is very well managed, and has a strong balance sheet. So why on earth would we be betting against this stock? In short, because we think the valuation is extreme and that the rapid shift of its customers to streaming content (vs. mailing DVDs to customers) isn’t the beginning of an exciting, highly-profitable new world for Netflix, but rather the beginning of the end of its incredible run. In particular, we think margins will be severely compressed and growth will slow over the next year."


Tilson's main short thesis here is valuation. On that subject he argues, "By any measure, Netflix’s valuation is extremely rich. Based on yesterday’s closing price, it trades at 67.4x trailing EPS ($2.65), 63.1x the high end of the company’s EPS guidance for the full year 2010 ($2.83), and 46.7x consensus analysts’ estimates for 2011 ($3.82). It also trades at 4.6x sales. In short, the stock is priced for perfection and any misstep would likely trigger a huge selloff."

Other Reasons for Shorting NFLX

While valuation is often a logical place to start when searching for a short thesis, Tilson also hints at various other reasons to be skeptical of the company. Of these, he points out the company's business model shift, potential new competitors, the sudden resignation of the CFO, and a large potential impact on margins. Regarding the latter, the T2 Partners manager says,

"The biggest impact on margins, we believe, will come from Netflix having to pay increasing amounts for streaming content. Unlike renting DVDs, in which Netflix is protected by the First Sale Doctrine (for now, anyway – see discussion below), the laws around streaming content require that Netflix must have an agreement with the content owner to stream it. This is very bad news for Netflix because content owners are generally very savvy and are seeking to carefully control their content to maximize revenues."

In-Depth Report

Tilson elaborates on his short thesis in the in-depth report embedded below:

You can download a .pdf copy here.

While Tilson has gotten roughed up by this stock, his conviction is unwavering and it is currently T2 Partners' largest bearish bet (via short common stock and owning put options). We'll have to see if he continues to get beat up in this name (and if so, at what point he cries "Uncle") or whether his thesis comes to fruition over time. For more from this hedge fund, we've detailed T2's largest positions as well as their bullish stance on Automatic Data Processing (ADP).

Berkowitz Joins St. Joe (JOE) Board, Einhorn Skeptical of Any Potential Acquisition

There are two enthralling recent developments in the ongoing saga surrounding The St. Joe Company (JOE). As we've detailed before, Bruce Berkowitz's Fairholme fund is long JOE. David Einhorn's hedge fund Greenlight Capital has taken the other side of the trade and is short JOE. Recently, rumors surged that St. Joe could be taken private which caused shares to jump 15% over the past few days. The company refused to comment on such rumors, citing company policy.

Einhorn Skeptical of Potential Takeover

We originally posted Einhorn's short thesis on JOE in which he laid out a bear case where the company could be worth $7-10 per share if it were converted into a rural land company. When Einhorn made his bearish presentation at the Value Investing Congress, his speech caused shares to plummet. Recently, shares have staged a slight comeback due to recent takeover rumors. Einhorn addressed this concern in a recent interview with Bloomberg TV:

"Well, I don’t think taking over St. Joe would make very much sense. The talk yesterday was that Bruce Berkowitz and maybe some private equity guys were going to pay a big premium for the company and so that caused a lot of excitement. What I think is that this is going to be a very hard thing to take private on a reasonable basis because there is no cash flow in the company. The company has negative profits and they have no means of generating ongoing cash to service debt. Which means that there’ s not a lot of bank lending for the sort of undeveloped land that St. Joe has at this stage of the cycle which means that it’s going to be very tough, I think, to finance a leveraged transaction for this company."

The Greenlight Capital fund manager also touched on how this short position is somewhat different than a typical short, saying:

"What’s kind of neat about the St. Joe analysis as a short as opposed to some other things is that there’s no ongoing business. They have this many acres. Ten years ago they had twice as many acres. All they do is sell acres. They take in cash for selling the acres. Most of it goes to the operating expense of the company so there’s not a lot of profits left for shareholders. And so basically, this isn’t an ongoing business, it’s basically a run-down of the assets. And my feeling is that if they continue on their current course, it’s going to take them a few decades, but, by the end of the day, there just won’t be anything left."

It's clear that Einhorn feels a takeover would be hard to secure and he is sticking to his guns with his thesis. After all, he has been short the company in the past as well.

Fairholme Duo Joins JOE Board

On the other side of the spectrum, you have Bruce Berkowitz's Fairholme Capital in the 'long' camp. News came out recently that both he and Charlie Fernandez (also of Fairholme) would join St. Joe's board of directors. Fairholme is JOE's largest shareholder and owns almost 29% of the company. As we've detailed in the past, Berkowitz's ownership stake is effectively capped at that level due to a standstill agreement with the company.

Since Berkowitz can't purchase more shares, it's clear that he's flexing his activist muscle in a different direction by trying to aid JOE's board. He faces a tough battle against Einhorn in an attempt to restore/create shareholder value and fend off short-sellers and pessimists. Of his position in JOE, Berkowitz said in a statement that:

"St. Joe has uniquely valuable assets and some of the most attractive, concentrated and well-managed real estate in the U.S. The value is in its development expertise, communities, infrastructure, entitlements, master plans, timberlands and most importantly the company's long-term vision."

Battle of Fund Managers

This is the definition of a battleground stock as you have two well-respected fund managers taking different sides of the trade. Einhorn won round one by sending shares spiraling with his bearish presentation. Will Berkowitz win round two? With his new seat on the board of the company, he'll aim to take a hands-on approach. It will be interesting to see if the takeover rumors are just that (rumors), or if there's something more substantial to them. One thing's for certain: this saga is just getting started.

Keep in mind that we've analyzed the portfolios of both Greenlight and Fairholme in the latest issue of our newsletter. For more from David Einhorn, we recently posted up his new position as well as his recent television interview. You can also check out all our coverage of Bruce Berkowitz here.

John Thaler's JAT Capital Boosts Green Mountain Coffee Roasters (GMCR) Stake

John Thaler's hedge fund JAT Capital just filed a 13G with the SEC regarding Green Mountain Coffee Roasters (GMCR) due to portfolio activity on December 6th. JAT disclosed a 5% ownership stake in GMCR with 6,602,008 shares. This is an increase of 128% in their position size as they held 2,890,042 shares at the end of the third quarter. Drilling down the specifics of JAT's current position, the hedge fund firm owns 4,102,008 common shares and then their additional 2,500,000 shares are represented by call options.

Green Mountain Coffee Roasters is an interesting stock because it is essentially a 'battleground' of hedge fund opinion. This name has high short interest but at the same time, some notable funds hold long positions. At the end of the third quarter, some of the big holders were JAT Capital, Stephen Mandel's Lone Pine Capital, Patrick McCormack's Tiger Consumer, Brett Barakett's Tremblant Capital and Steven Cohen's SAC Capital.

Prior to founding JAT Capital, John Thaler worked at Shumway Capital Partners where he covered telecom, media and technology and then managed the internal Omni fund. Thaler earned his BA in Economics at the University of Chicago. JAT employs a long/short equity strategy with an emphasis on proprietary fundamental research. In 2008, the fund returned -5.9% compared to an S&P return of -37%. JAT finished 2009 up 23.2% gross. Thaler brings a private equity-like approach to investing due to his days at Spectrum Equity Investors, a private equity firm focused on technology.

Per Google Finance, Green Mountain Coffee Roasters is "engaged in the specialty coffee and coffee maker businesses. The Company operates in two business segments: the Specialty Coffee business unit (SCBU) and the Keurig business unit (Keurig). SCBU sources, produces and sells more than 200 varieties of coffee, cocoa, teas and other beverages in K-Cup portion packs and coffee in more traditional packaging, including whole bean and ground coffee selections in bags and ground coffee in fractional packs, for use both at-home (AH) and away-from-home (AFH)."

Scroll through the latest hedge fund activity here.

What We're Reading ~ 12/17/2010

Our finance-oriented holiday gift guide [MarketFolly]

How to get into value investing as a profession [GannonOnInvesting]

The high yield one-way ride [Econompicdata]

Conversation with David Gaffen of Reuters US Markets [AbnormalReturns]

David Gaffen has a new book out: Never Buy Another Stock Again [Amazon]

Jim Chanos raises money for new hedge fund [FINalternatives]

What's wrong with Research in Motion (RIMM) & Blackberry? [MobileOpportunity]

On communicating ideas [ResearchPuzzle]

A miscellany of deep value [Greenbackd]

The relation between hedge fund size and risk (.pdf) [SpringMountainCapital]

On staying in the game [Information Arbitrage]

Looking at James Maynard Keynes as an investor [CanTurtlesFly?]

The case for US equities [FT Alphaville]

The case against gold [Globe and Mail]

Highland Capital bullish on credit [Dealbook]

Thursday, December 16, 2010

Alcon Agrees Novartis Deal in Consensus Hedge Fund Arbitrage Trade

Alcon (ACL) has reached an agreement to sell the remaining 23% of the company to Swiss drug maker, Novartis (NVS). Novartis is offering 2.8 shares of NVS for each share of ACL, the equivalent of $168 for each ACL share. The deal is supposed to close in the first half of 2011, pending shareholder approval.

While Novartis' offer comes in at $168 per share, ACL is currently trading just above $164. The deal is contingent upon shareholder approval and if you examine the list of shareholders, it's littered with prominent hedge funds. Back in the second quarter issue of our Hedge Fund Wisdom newsletter, we flagged Alcon (ACL) as a 'consensus buy' due to numerous hedge funds starting and accumulating positions in the company. You can check out a full free sample issue here.

Then in our new third quarter issue, we singled out Alcon as a featured hedge fund merger arbitrage play three weeks ago. To understand the hedge fund investment thesis, here's some of our commentary from our newsletter:

"Alcon was purchased by Nestle in 1977. Nestle floated to the public a 25% stake in the company in 2002. In April 2008, Novartis (NVS) purchased from Nestle a 25% stake in Alcon for $143 per share. And in August of 2010, Novartis exercised its call option to acquire Nestle’s remaining stake at a price of $181 per share.

In January 2010, Novartis made an offer of 2.8 shares of Novartis stock for each share of Alcon for the stake owned by the public (which currently values Alcon at $156 per share). Still, Alcon is trading at $163 because the offer has been rebuffed so far and investors are looking for a more equitable offer to the Nestle stake takeout that was done at $181. Arbitrageurs are betting that Novartis will increase the effective exchange ratio, so they buy Alcon and short Novartis in order to hedge out the risk that Novartis shares may go down by the time the deal closes.

Novartis closed its acquisition of NestlĂ©’s stake in 3Q, which increased investors’ confidence that a buyout of the public shares will happen sooner rather than later. In addition, Alcon’s share price is tied to the value implied by the exchange ratio offered by Novartis. So, as Novartis’ shares dropped in late 2Q / early 3Q, so did Alcon shares. At $135, the spread to the Nestle takeout at $181 was seen as too wide and the value of Alcon’s franchise was under-appreciated by the market.

This combination motivated some new funds to add Alcon to their portfolio. Magnetar Capital started a new position in Alcon and made it its top portfolio holding with a 12% weight. Steven Cohen’s SAC Capital maintained Alcon as its #1 position and increased its exposure during the quarter by 20%. John Paulson’s hedge fund Paulson & Co increased its exposure by 30%. Highbridge Capital doubled its position while Jamie Dinan’s York Capital and Thomas Steyer’s Farallon Capital also added shares of ACL. And while some funds are obviously short Novartis as part of the arbitrage pair (though they don’t disclose it), other funds have elected to purchase puts on Novartis to round out the merger-arb trade."

Given the quantity and quality of hedge funds involved in this trade, it will be very interesting to see if they approve the current deal valued at $168 per each ACL share or if they push for the same $181 per share that Novartis paid Nestle. With shares still trading slightly below the deal price, it will be interesting to follow.

The above is the type of research and analysis we cover in our Hedge Fund Wisdom newsletter. Be sure to click here for a free sample issue as we examine the investment theses behind hedge fund trades.

Eton Park Capital Supports Air Products' Latest Bid For Airgas

Eric Mindich's hedge fund firm Eton Park Capital Management recently filed an amended 13D with the SEC regarding their stake in Airgas (ARG). Per the updated disclosure, Eton Park shows ownership of 7.15% of Airgas with 6,014,200 shares. Their position remains unchanged as they held this amount of shares at the end of the third quarter. This has been a longstanding merger arbitrage play in their portfolio.

Today we continue 'merger arbitrage day' on as we examine some of the largest trades hedge funds have put on in recent quarters. Eton Park mainly filed their amended 13D to publicly voice support behind Air Products and Chemicals' (APD) latest offer for Airgas. Here's Eton Park's statement:

"To The Board of Directors of Airgas, Inc.: As you know, funds managed by Eton Park Capital Management own more than 6 million shares, or approximately 7.15% of the outstanding shares, of Airgas, Inc. We write to express our views to the Board of Directors with respect to Air Products and Chemicals, Inc.’s $70 per share offer to acquire Airgas.

Until now, we have refrained from public comment on either Air Products’ efforts to acquire Airgas or on Airgas’ efforts to defend against the bid. We generally do not oppose poison pills or staggered boards and believe that the Airgas board to date has served its shareholders well. Airgas’ defense has forced Air Products to raise its bid several times. But now, circumstances have changed. Air Products has raised its offer to $70 a share and stated that the offer is best and final. In our view, the $70 per share bid is fair, represents an appropriate price for control of Airgas and, accordingly, presents an opportunity and not a threat to Airgas or its shareholders.

We believe the Airgas board should now either allow shareholders to accept Air Products’ revised offer or establish a clearly defined process designed to achieve greater value through an alternative control transaction."

So, given the lengthy nature of this takeover saga, Eton Park feels that Air Products' latest offer is fair and are fully in support of it. It will be intriguing to see if other hedge funds also publicly voice their support of accepting this offer as this has been one of the larger merger arbitrage plays in hedge fund land. If some funds support the latest bid while others oppose it, things could get very dicey.

Shares of ARG are currently trading around $63, about 11% lower than APD's offer of $70 per share. Since this is an arbitrage trade, keep in mind that Eton Park has most likely hedged this play somehow, possibly by shorting APD shares. We'll have to see if Airgas' board agree with Eton Park and accept the latest bid. For other activity out of Eton Park, we also detailed an increase in their Lonrho (LONR) stake.

Per Google Finance, Airgas is "a distributor of industrial, medical and specialty gases (delivered in packaged or cylinder form), and hardgoods, such as welding equipment and supplies. Airgas is also a United States distributor of safety products, producer of nitrous oxide and dry ice, liquid carbon dioxide producer in the Southeast, and a distributor of process chemicals, refrigerants and ammonia products."

Stay tuned for one more merger arbitrage post this morning. In the mean time, check out our other hedge fund tracking here.

Hedge Fund Carlson Capital Goes Activist on Portec Rail Products (PRPX)

Hedge fund Carlson Capital has gone activist on Portec Rail Products (PRPX) via a 13D just filed with the SEC. Carlson has disclosed a 5.2% ownership stake in PRPX with 503,674 shares. This is not a new position for the hedge fund as they previously owned 403,949 shares as of the end of the third quarter. As such, Carlson has recently purchased 99,725 additional shares of Portec Rail Products. In recent months, Carlson has also gone activist on Phoenix Technologies (PTEC) amidst takeover bids as well.

Today is 'merger arbitrage day' on the site and so we're taking a look at three separate arbitrage trades that prominent hedge funds have put on. As detailed in Carlson's 13D filing, here's a timetable of events that have taken place regarding PRPX shares:

- February 16th, 2010: L.B. Foster (FSTR) commenced a tender offer to purchase all PRPX shares at a price of $11.80 per share with the offer expiring on December 15th.

- August 24th, 2010: Sentinel Capital Partners expressed interest in acquiring all of PRPX shares at a price of $11.75.

- December 7th, 2010: Sentinel again expresses interest in acquiring all shares, but this time with an increased offer of $13.00 per share.

- December 15th, 2010: Per a PR release, "The tender offer for all of the outstanding shares of Portec expired at 5:00 p.m., New York City time, on December 15, 2010. As of that time, the depositary for the offer advised that approximately 7.63 million shares, representing approximately 79.46% of Portec's outstanding shares, were validly tendered and not withdrawn in the offer."

And late yesterday afternoon, Carlson Capital filed its 13D on PRPX and acquired the shares "pursuant to investment strategies, including merger arbitrage and event driven strategies, because they believed that Shares reported herein, when purchased, represented an attractive investment opportunity."

Will Carlson Capital's new activist push shake things up? While Portec Rail Products received offers at $11.80 and then $13.00, shares currently trade around $11.90. It remains to be seen as to whether or not Carlson will push for the higher $13 per share offer so we'll watch this one as it develops. In the mean time, you can also check in on Carlson's other activist investments including Hot Topic (HOTT) as well as Phoenix Technologies (PTEC).

Per Google Finance, Portec Rail Products "manufactures, supplies and distributes a range of rail products, including rail joints, rail anchors, rail spikes, railway friction management products and systems, railway wayside data collection and data management systems, and freight car securement systems."

For all our hedge fund activity tracking, scroll through our coverage of SEC filings here. Stay tuned for two more merger arbitrage related posts later this morning.

Wednesday, December 15, 2010

Hedge Funds Active in Aurelian Oil & Gas (AUL): Soros, Toscafund, Blue Ridge Capital

Shares of Aurelian Oil and Gas (LON: AUL) in London have seen some active trading by hedge funds as of late. Aurelian held a placing on November 25th where they issued 146,888,231 additional shares and proceeds from the offering raised €100 million.

On the 6th of December, Soros Fund Management (George Soros' hedge fund) then revealed that they boosted their holdings in the company above the 3% threshold that requires a disclosure. Soros disclosed an ownership stake of 4.36% of shares outstanding and it's unclear if this is a new or previously held stake. Regarding other portfolio activity from this hedge fund, we also detailed Soros' purchase of more Exar Corp (EXAR).

Per a second hedge fund filing in the UK regulatory system, Martin Hughes' Toscafund Asset Management noticeably ramped up its stake in Aurelian. They now hold 11.02% of shares outstanding, having previously owned only 3.25% at the end of September.

And where there are buyers, there are always sellers. John Griffin's hedge fund Blue Ridge Capital has been a seller here. Previously, Blue Ridge held 5.59% of the company but they have since sold below the 3% ownership threshold that requires disclosure. So, it's tough to say if they still hold a stake or completely exited the position. However, it's very clear that they have at the very least trimmed their position in sizable fashion. You can view the rest of Blue Ridge's portfolio in our new newsletter issue.

Per Google Finance, Aurelian Oil and Gas is "an upstream oil and gas exploration and production company focused on Central Europe. It holds a portfolio of licensed blocks in Poland, Slovakia, Romania and Bulgaria and is exploring and appraising the blocks for hydrocarbon deposits."

Be sure to also check out all of our coverage of hedge fund activity in UK markets.

Tuesday, December 14, 2010

Holiday Gift Ideas For Financial Professionals

Each year we like to highlight relevant gift ideas for investors, traders, and professionals in the financial industry. If you or someone you know loves the markets, then here's some great picks that will arrive in time for the holidays:


Hedge Fund Wisdom ~ $199: Give someone (or yourself) a 1-year subscription to's premium newsletter that examines hedge fund portfolios in-depth.

Wall Street Journal ~ 75% Discount: Save a ton on a subscription to Wall Street's prominent news source.

Barron's ~ 60% Off: More savings on another widely-read financial publication (plus 4 weeks free).

Useful Gadgets

Amazon Kindle with Wi-Fi ~ $139: The new Kindle's e-ink technology doesn't strain your eyes like a monitor & is great for reading e-books. Not to mention, you can even read SEC filings on it! Carry this one device around instead of a ton of books. There is also a Wi-Fi & Free 3G version for $189.

13" Apple Macbook Air: The brand new Macbook Air is their thinnest computer yet & is great for when you're traveling. It also comes in an ultra-portable portable 11-inch model.

Apple iPad: Another great device for on-the-go use with tons of great investing & market-related apps.

Toshiba Portege 13-Inch Laptop ~ $799.99: Another portable option for those who like the Windows operating system.

Apple iPod Touch 32 GB ~ $269.99: Smaller, useful media device for music, movies, & wi-fi web browsing.


If you don't like portable e-readers, you can always go the physical book route as well. Some great market reads we highly recommend:

Top Hedge Fund Investors by Cathleen Rittereiser ~ $35.62: A great book detailing stories, strategies, and advice from top managers.

All the Devils Are Here: The Hidden Story of the Financial Crisis by Bethany McLean and Joe Nocera ~ $17.50: A very comprehensive look at the crisis from a different angle; highly recommended.

The Art of Short Selling by Kathryn Staley ~ $43.66: Probably THE book authority on short selling as it has been recommended by Third Point's Dan Loeb as well as hedge fund Blue Ridge Capital.

Confidence Game: How Hedge Fund Manager Bill Ackman Called Wall Street's Bluff by Christine Richard ~ $18.45: The title says it all.

Fooling Some of the People All of the Time by David Einhorn ~ $11.21: A new paperback version of the hedge fund manager's popular book with an epilogue containing new story information and an intro by Joel Greenblatt.

The Greatest Trade Ever by Gregory Zuckerman ~ $17.16: A fantastic book detailing how John Paulson predicted the housing crisis and profited from shorting subprime.

You Can Be a Stock Market Genius by Joel Greenblatt ~ $10.20: Baupost Group's Seth Klarman actively recommends this book as it details catalyst-based investing such as mergers, spin-offs, and risk arbitrage to exploit market inefficiencies.

For more great book ideas, be sure to check out our comprehensive list of books recommended by hedge fund managers.


Wall Street 2: Money Never Sleeps (DVD) ~ $15.99: The next installment of Gordon Gekko set to be released on DVD for the holidays. You can also pick up the Blu-Ray version here.

Wall Street (DVD) ~ $7.49: "Greed ... is good." The original movie that people still quote to this day. It is also available on Blu-Ray.

That wraps up our holiday gift guide for those who love financial markets. Happy Holidays everyone!

Viking Global Reveals Short Position in NYSE Euronext (NYX)

Per the French regulatory system, Andreas Halvorsen's hedge fund Viking Global has disclosed a short position in NYSE Euronext (NYX). This disclosure is pursuant to European regulatory measures from back in 2008 regarding short sales in financial institutions.

According to the disclosure, Viking Global is short 2,795,400 shares of NYSE Euronext, representing 1.07% of capital. This position was reported as being held on December 9th, 2010. We recently detailed Viking Global's portfolio in the new issue of our newsletter.

Given that this disclosure was made in France, we'd assume Viking is short the shares of Euronext traded in Paris. NYSE Euronext is traded on American exchanges under ticker NYX as well (the SEC does not require public disclosure of short sales). Combing through other regulatory systems, we've uncovered that Halvorsen's hedge fund has also been short KBC Groep NV (KBC).

Per Google Finance, NYSE Euronext is "a global operator of financial markets and provider of trading strategies. The Company offers an array of products and services in cash equities, futures, options, swaps, exchange-traded products, bonds, market data and commercial technology solutions."

Check out the rest of Viking Global's activity in our newsletter.

Seth Klarman Trims Breitburn Energy Partners (BBEP) & Alliance One International (AOI) Positions

Seth Klarman's hedge fund firm Baupost Group recently filed two amended 13G's with the SEC. First, due to portfolio activity on November 30th, Baupost has disclosed a 9.35% ownership stake in Breitburn Energy Partners (BBEP) with 4,983,600 shares. This is a decrease in their position to the tune of 30% (Baupost previously owned 7,160,500 shares as of September 30th).

Second, Klarman has also revealed a very slight reduction in his Alliance One International (AOI) position. Per an amended 13G, Baupost now shows a 10.09% ownership stake in AOI with 8,786,700 shares. Back on September 30th, the hedge fund firm owned 8,800,000 shares.

Baupost continues to trim exposure to stocks and you can see the rest of Baupost's equity positions here. Klarman recently announced that he would be returning some capital to investors, citing lack of opportunities. You can view his market concerns in an interview with Klarman.

Per Google Finance, Breitburn Energy Partners is "an independent oil and gas partnership focused on the acquisition, exploitation and development of oil and gas properties in the United States. The Company’s assets consist of producing and non-producing crude oil and natural gas reserves ."

Alliance One International is "engaged in purchasing, processing, storing, and selling leaf tobacco. The Company purchases tobacco in the United States, Africa, Europe, South America and Asia for sale to customers primarily in the United States, Europe and Asia."

To learn how to invest like this great investor, we point you to Seth Klarman's recommended reading list.

Valinor Management Starts Cott Corporation (COT) Stake

David Gallo's hedge fund Valinor Management has disclosed a brand new position in Cott Corporation (COT) via a 13G filed with the SEC. Due to portfolio activity on December 2nd, Valinor has revealed a 5.8% ownership stake in COT with 5,457,532 shares. In their last 13F filing (portfolio disclosed as of September 30th), Valinor did not show a position in COT. As such, they've assembled this brand new stake over the past two and a half months.

Other portfolio activity out of Gallo's hedge fund we detailed includes a past increase in their Gymboree (GYMB) stake. This position turned out well as the company was bought out by Bain Capital.

Before founding Valinor, Gallo worked at Roberto Mignone's Bridger Management and earned his MBA at Harvard Business School. His firm is named after lands inhabited by immortal souls from the books by J.R.R. Tolkien.

Per Google Finance, Cott is "a non-alcoholic beverage company and a retailer brand soft drink provider. In addition to carbonated soft drinks (CSDs), its product includes clear, still and sparkling flavored waters, juice-based products, bottled water, energy-related drinks and ready-to-drink teas."

Stay up to date with the most recent hedge fund filings on our site.

D.E. Shaw Boosts Positions in Global Cash Access (GCA) & LodgeNet Interactive (LNET)

Hedge fund firm D.E. Shaw & Co just filed numerous 13G's with the SEC. First, they've disclosed an increased stake in Global Cash Access (GCA). Due to portfolio activity on December 1st, D.E. Shaw shows a 5% ownership stake in GCA with 3,258,410 shares. This is a 105% increase in their position size since September 30th.

Second, D.E. Shaw also revealed a 5.5% ownership stake in LodgeNet Interactive (LNET) with 1,368,760 shares. This marks a 133% boost in their position size since the end of the third quarter.

In the past, we've also posted up various resources from this multi-faceted firm. Head to D.E. Shaw's insight on leverage to see the over $35 billion asset manager's take.

Per Google Finance, Global Cash Access is "a global provider of cash access and data intelligence services and solutions to the gaming industry. The Company’s services and solutions provide gaming establishment patrons access to cash through a variety of methods, including automated teller machine (ATM) cash withdrawals, credit card cash access transactions, point-of-sale (POS) debit card transactions, check verification and warranty services and money transfers."

LodgeNet Interactive is "a provider of interactive media and connectivity solutions to the hospitality industry in the United States, Canada and Mexico. The Company also provides interactive television solutions in international markets through local or regional licensees."

Be sure to also scroll through our latest SEC filing coverage.