Tuesday, November 12, 2013

Warren Buffett's Berkshire Hathaway Acquires More DaVita Shares

In a Form 4 filed with the SEC, Warren Buffett's Berkshire Hathaway has revealed new purchases in shares of DaVita (DVA). 

On November 6th, 7th, and 8th, Berkshire acquired 3,700,294 shares in total at prices ranging from $52.78 to $56.41.

After all was said and done, Berkshire now owns 35,147,124 shares of DaVita.  Keep in mind that the company had a 2-for-1 stock split on September 6th of this year.

This has been a position Berkshire has been heavily adding to ever since new portfolio managers Todd Combs and Ted Weschler came onboard.  We've highlighted Berkshire's purchases of DVA shares earlier this year in the summer, as well as in 2012.

Per Google Finance, DaVita is "a provider of dialysis services in the United States for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD)."

For more on Berkshire, head to a recent interview with Warren Buffett where he said stocks are fairly priced.

Passport Capital Discloses 58.com Stake

John Burbank's hedge fund firm Passport Capital has filed a 13G with the SEC regarding shares of 58.com Inc (WUBA).  Per the filing, Passport now owns 11.8% of the company with 2,821,526 shares (via 1,410,763 ADR shares).  The filing was made due to activity on November 1st.

Per Yahoo Finance, the company "Beijing 58 Information and Technology Co., Ltd. owns and operates an on-line classified advertisement services Web Site under the name 58.com. The Web Site helps individuals and SMEs to broadcast and search information relating to job opportunities, housing, dating, community events, services, and trading of second hand products. Beijing 58 Information and Technology Co., Ltd. was founded in 2005 and is based in Beijing, China."

For more from this hedge fund, head to John Burbank's thoughts at the Excellence in Investing Conference, as well as Burbank's comments at the Alpha Hedge West Conference.

Scout Capital Increases COTY Holdings

Adam Weiss and James Crichton's hedge fund firm Scout Capital Management filed a 13G with the SEC regarding shares of COTY (COTY).  Per the filing, Scout has revealed a 4.3% ownership stake in COTY with 3,530,000 shares.

This marks an increase of 30,000 shares since the the end of the second quarter.  The new filing was required due to activity on October 28th.

Per Google Finance, COTY is "engaged in the manufacturing, marketing and distribution of women’s and men’s fragrances, color cosmetics and skin and body care related products globally. The Company operates in three segments: Fragrances, Color Cosmetics and Skin & Body Care. The Company’s power brands consists of adidas, Calvin Klein, Chloe, Davidoff, Marc Jacobs, OPI, philosophy, Playboy, Rimmel and Sally Hansen. The Company sells products in each of its segments through retailers, including hypermarkets, supermarkets, independent and chain drug stores and pharmacies, upscale perfumeries, upscale and mid-tier department stores, nail salons, specialty retailers, duty-free shops and traditional food, drug and mass retailers."

For more portfolio activity from Scout Capital head here.

Dan Loeb Discloses New FedEx Stake

Third Point's founder Daniel Loeb today disclosed a new position in FedEx (FDX) at the Dealbook conference which was shown on CNBC and said he met with the CEO.

Loeb said that, "We had a very constructive discussion about the company."  He also commented that he is not looking to oust the CEO.

Third Point isn't the only prominent hedge fund interested in the company, either.  Our Hedge Fund Wisdom newsletter highlighted that John Burbank's Passport Capital and Richard Perry's Perry Capital both initiated stakes in FDX in the second quarter.  Perry's position was quite notable at the time, as they owned over $384 million worth and it was one of their largest disclosed US longs.

The thesis on this name focuses on improvement in profitability, bringing margins more in-line with competitors, as well as favorable tailwinds like gas prices.

Loeb also talked about shareholder activism and specifically about Sony (SNE).  Loeb argues they're more like private equity investors.  When asked whether or not Sony was a bet on Japan, Loeb replied, "We remain very bullish on Japan."

Embedded below are the videos of Loeb's comments:

Video 1 on FedEx:

Video 2 on Sony:

Video 3 on activism:

Video 4 on Herbalife:

For more on this hedge fund, we've posted up Third Point's Q3 letter as well.

Eminence Capital Goes Activist on Mens Wearhouse, Now Largest Shareholder

Ricky Sandler's hedge fund firm Eminence Capital recently filed an activist 13D with the SEC regarding shares of Men's Wearhouse (MW).  Per the filing, Eminence has disclosed a 9.8% ownership stake in the company with 4,684,200 shares, making them the largest shareholder.

The filing shows Eminence was buying MW shares in early October around $34 and then later in the month between $42 and $44.

Men's Wearhouse has recently been approached by fellow retailer Jos A. Bank (JOSB) about buying the company.  MW rebuffed the offer and now Sandler has sent a letter to MW's board asking them to reconsider.

While Sandler agrees that JOSB's $48 offer for MW undervalues the company, he argues that there are large synergies to be had in a merger.

In his letter, Sandler asks for the company to, "1) instruct your financial advisors to evaluate MW's strategic alternatives, including soliciting competing proposals to acquire MW and analyzing a leveraged recapitalization of MW in the public marketplace, and 2) enter into a dialogue with JOSB regarding a possible combination.  We intend to exercise our rights as shareholders to hold you accountable if you fail to take these actions by close of business on November 11th."

For more on this hedge fund, we've covered Eminence Capital's portfolio activity here.

Pennant Capital Boosts BioScrip & MRC Global Positions

Alan Fournier's hedge fund firm Pennant Capital has filed 2 separate 13G's with the SEC regarding two of their pre-existing positions.

BioScrip (BIOS)

First, Fournier has revealed an increased stake in BioScrip (BIOS).  Per the filing, Pennant now owns 8.44% of the company with 5,737,773 shares.  This is an increase of 250% in their position size since the end of the second quarter.  The filing was made due to activity on October 30th.

Per Google Finance, BioScrip is "a provider of pharmacy and home health services, which partners with patients, physicians, hospitals, healthcare payors and pharmaceutical manufacturers to provide clinical management solutions and the delivery of prescription medications and home health services. Its platform provides service capabilities and the ability to deliver clinical management services, which offers patients a community-based and home-based care environment. Its core services are provided in coordination with, and under the direction of the patient’s physician. Its home health professionals, including pharmacists, nurses, respiratory therapists and physical therapists, work with the physician to develop a plan of care suited to its patients’ specific needs. In August 2013, BioScrip Inc completed the acquisition of the business of CarePoint Partners Holdings LLC and its subsidiaries."

MRC Global (MRC)

Second, the hedge fund also increased its holdings of MRC Global (MRC). Per the 13G filing, Fournier's firm now owns 7.34% of MRC with 7,468,433 shares.  This marks an increase of around 13% since the end of Q2.  The filing was required due to activity on November 7th.

Per Google Finance, MRC is "the distributor of pipe, valves and fittings (PVF) and related products and services to the energy industry. The Company operates in two segments: North American segment and International segment. Its North American segment includes over 180 branch locations, six distribution centers in the United States, one distribution center in Canada, 11 valve automation service centers and over 170 pipe yards located in the oil and natural gas regions in North America. Its International segment includes over 40 branch locations throughout Europe, Asia and Australasia with distribution centers in each of the United Kingdom, Singapore and Australia and 10 automation service centers in Europe and Asia. In July 2013, MRC Global Inc announced that it has completed the previously announced acquisition of the operating assets of Dan H. Brown, Inc., D/B/A Flow Control Products (Flow Control)."