Steve Cohen's SAC Capital Adds to Shaw Group (SHAW) Position ~ market folly

Thursday, June 21, 2012

Steve Cohen's SAC Capital Adds to Shaw Group (SHAW) Position

Steve Cohen's hedge fund firm SAC Capital recently filed a 13G with the SEC regarding its position in Shaw Group (SHAW).  Per the filing, the hedge fund now owns 5% of the company with 3,317,912 shares.

This marks almost a 260% increase in their position size since the end of the first quarter.  At the end of March, SAC Capital owned 922,431 common shares of SHAW but also owned 100,000 via call options as disclosed in their 13F filed with the SEC.

Other Hedge Funds Involved

Some readers may recall that we've featured Shaw Group on the site before as Jay Petschek and Steven Major's hedge fund Corsair Capital have been long.  Additionally, in February we highlighted when Dmitry Balyasny's hedge fund firm Balyasny Asset Management took a big stake in the company too.

Investment Thesis on Shaw

In the past, we've featured Corsair's investment thesis on Shaw if you want to know the rationale behind owning the name.

And then more recently, we've posted the firm's update on their stake excerpted from Corsair's Q1 letter where they wrote:

"two of its main customers received the final requisite Nuclear Regulatory Commission licensing to construct two new nuclear power plants and the EPA's increased environmental standards drove power plant maintenance contract wins.  The company also reported a strong fiscal Q2 and the upcoming divestiture of the Energy and Chemicals division in the next few months should create additional shareholder value.  We estimate that SHAW could earn $3.00/share in FY 2013, which would increase its net cash position to over $17.00/share."

Per Google Finance, Shaw Group is "a provider of technology, engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation and facilities management services to a diverse client base that includes multinational and national oil companies and industrial corporations, regulated utilities, independent and merchant power producers, and government agencies. The Company has developed and acquired intellectual property, including downstream petrochemical technologies, induction pipe bending technology and environmental decontamination technologies."

For more on Steve Cohen's firm, we've posted SAC Capital's recent activity here.

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