Roberto Mignone Buys Cott (COT) ~ market folly

Tuesday, March 8, 2011

Roberto Mignone Buys Cott (COT)

Roberto Mignone's hedge fund firm Bridger Management just filed a 13G with the SEC regarding shares of Cott (COT). Due to portfolio activity on February 25th, Bridger has disclosed a 6.8% ownership stake in COT with 6,400,000 shares. This is a brand new position for the hedge fund and you can see the rest of Bridger's investments here.

This is now the second major hedge fund to invest in Cott over the past few months. As we've previously singled out, David Gallo's Valinor Management started a stake in the company back in December and recently increased its Cott position. The interesting thing here is that prior to founding Valinor, Gallo worked at Bridger. As such, the fact that both hedge funds have recently acquired positions in the same company isn't that surprising.

The other unique aspect of this investment is that shares are largely trading around the levels where these managers purchased COT. While disclosures filed with the SEC are time-lagged and on a slightly delayed basis, this is a rare opportunity where shares haven't been massively bid up from the level where the hedge fund established a position.

COT recently reported earnings largely in-line with estimates. Analysts are expecting continued margin pressures (cost inflation) at the company. On the positive side, they also expect increased synergies and the pay-down of debt to help offset this.

Per Google Finance, Cott Corp 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."

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