Friday, February 28, 2014

What We're Reading ~ Hedge Fund Links 2/28/14

Best ideas from the Harbor Conference: Kingdon, Locust Wood, Blackstone [Street]

New hedge funds move away from monthly liquidity in 2013 [HedgeWeek]

George Soros considers investing in European banks [HedgeWorld]

Ackman talks Herbalife, P&G, Target, and Air Products [CNBC]

Steve Mandel tops best-earning hedge funds for clients in 2013 [Bloomberg]

Hedge funds wrestle with employee personal account trading conflicts [Forbes]

With ban on ads removed, hedge funds test waters [Dealbook]

Funds look to hire PR heads [CNBC]

Investor pushes to block Red Lobster spinoff [Dealbook]

Carl Icahn's various letters to eBay [Shareholders' Square Table]

Why Sam Zell loves Mexico [UTSanDiego]

The hedge fund report card [II Alpha]

Blackstone buys minority stake in hf Senator [Bloomberg]

Third Point Seeks Sotheby's Board Seats

Dan Loeb's hedge fund firm Third Point revealed in an amended 13D filing that they're seeking 3 board seats at Sotheby's (BID).  You'll recall that Third Point initiated an activist stake in BID last year and pushed for corporate change. Third Point now owns over 9.5% of the company with 6.55 million shares.

While they're pleased the company announced it will return $450 million to shareholders via buyback and dividends, Loeb seeks to nominate himself, Harry Wilson, and Olivier Reza to the board.

The company has agreed that Loeb would be an "appropriate member" but Third Point also wants more representation.  Third Point also outlined other thoughts on the company which you can read here.

Other activists have also been involved in this stock, including Mick McGuire's Marcato Capital Management.

If you want to play catch up on the thesis, we analyzed Sotheby's in the Q3 2013 issue of our Hedge Fund Wisdom premium publication (not to mention, a brand new issue was just released).

JANA Partners Files 13D on URS

Barry Rosenstein's hedge fund firm JANA Partners has filed a 13D with the SEC regarding its stake in URS (URS).  Per the filing, JANA now owns 9.7% of URS with 7.28 million shares.

This is a net increase of only 105,300 shares since the end of 2013.  The filing was required due to activity on February 17th.

The main reason they filed the 13D, of course, was to disclose their activist investing intentions.  They have decided to meet with management to talk about the board of directors, capital structure, corporate structure and "other matters impacting shareholder value creation." 

JANA has requested the company delay the deadline to nominate board members.

Per Google Finance, URS is "a provider of engineering, construction and technical services. The Company offers a range of program management, planning, design, engineering, construction and construction management, operations and maintenance, and decommissioning and closure services to public agencies and private sector clients worldwide. It provides its services through four reporting segments: Infrastructure & Environment, Federal Services, Energy & Construction, and Oil & Gas Divisions. URS also is a United States federal government contractor in the areas of systems engineering and technical assistance, operations and maintenance, and information technology (IT) services. It provides services for federal, oil and gas, infrastructure, power, and industrial projects and programs."

For more from this hedge fund, head to some of JANA's other recent portfolio activity.

Thursday, February 27, 2014

Senator Investment Group Starts Brookdale Senior Living Position

Alex Klabin and Doug Silverman's hedge fund firm Senator Investment Group has filed a 13G with the SEC on shares of Brookdale Senior Living (BKD). 

This is a newly disclosed equity stake for Senator and they now own 5% of the company with over 6.2 million shares.  The filing was made due to activity on February 24th.

Per Google Finance, Brookdale Senior Living is "an owner and operator of senior living communities throughout the United States."

For more from this hedge fund, we recently posted up Senator's thesis on Air Products & Chemicals (Q4 letter) and detailed some of their other recent portfolio activity here.

Valinor Boosts dELiA's Stake, Nominates Board Member: 13D Filing

David Gallo's hedge fund firm Valinor Management has just revealed an increased stake in dELiA's (DLIA).  Per a Form 3 and a 13D filed with the SEC, Valinor has revealed they own 18.7% of the company with aggregate exposure to over 14.3 million shares.

The Form 3 outlines that they own over 10.7 million shares of common stock.  They also own over 13.1 million shares worth of Series B convertible preferred stock as well.  The filings were made due to activity on February 18th and we flagged Valinor's original purchase of DLIA late last year

Valinor has also nominated Seth Cohen to the company's board of directors.  Prior to founding Valinor, Gallo worked at Roberto Mignone's Bridger Capital.

Numerous other hedge fund managers have been involved in this name as Lee Cooperman also reported a DLIA stake in November.  Whitney Tilson's Kase Capital had also previously been a big proponent of shares, but per his recent 13F filing, it looks like he exited the position in the fourth quarter of 2013.

Per Google Finance, dELiAs is "a retail company comprised of two lifestyle brands primarily targeting teenage girls and young women. The Company generates revenue by selling predominantly to teenage consumers through direct mail catalogs, Websites and retail stores. It operates in dELiA*s brand. Through its e-commerce Webpages, catalogs and retail stores, dELiA*s (the brand) offers a variety of product categories to teenage girls to cater to an entire lifestyle. Through its catalogs and the e-commerce Webpages, it sells many name brand products along with its own brand products in key teenage spending categories. These products include apparel and accessories. Its mall-based dELiA*s specialty retail stores derive revenue primarily from the sale of apparel and accessories and, to a lesser extent, branded apparel to teenage girls. It operates in two segments: direct marketing and retail stores." 

Berkshire Hathaway Adds to DaVita Stake Again

In what has become a bit of a routine occurrence, Berkshire Hathaway has been out buying even more shares of DaVita (DVA) recently.  Per a Form 4 filed with the SEC, Warren Buffett's company has acquired over 1.1 million shares of DVA.

Berkshire acquired shares at weighted average prices ranging from $66.12 to $68.00 between February 24th and 26th.  After these purchases, Berkshire now owns over 37.6 million shares.

As we've highlighted in our premium publication Hedge Fund Wisdom (new issue just released),  this big stake is most likely attributed to Ted Weschler, one of Berkshire's newer portfolio managers.  DVA was one of Weschler's top holdings at his hedge fund before he joined Buffett's team.

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)." 

If you haven't seen it, be sure to check out Warren Buffett's recommended reading list.

Elliott Management Discloses F&C Asset Management and Alliance Trust Stakes

Paul Singer’s Elliott Capital Advisors activist hedge fund has made two new disclosures in London recently.  

F&C Asset Management Stake

Elliott started a new position in F&C Asset Management (LON:FCAM) with an 11% stake. Half of the holding is held via contract for difference (CFD) / derivatives.  F&C Asset Management has recently received a takeover offer from the Bank of Montreal. 

Per Google Finance “F&C Asset Management plc (F&C) is an asset management company.   The Company operates in three segments: F&C, F&C REIT and Thames River Capital (TRC). The   Company’s clients are insurance companies, institutional, retail and wholesale investors. The   Company manages portfolios across multiple asset classes on behalf of a range of clients including   insurance funds, pension schemes, public authorities and charities as well as private individuals   through savings schemes, investment trusts and mutual funds.”  

Alliance Trust Position

Elliott also added to its stake in London listed Alliance Trust (LON: ATST), taking its holding from 5% of voting rights to 10.02%. 

Per Google Finance – “Alliance Trust PLC is a self-managed investment trust. The Company’s   objective is to be a core investment for investors seeking increasing value over the long-term. The Company pursues its objective by investing in both quoted and unquoted equities in different sectors and industries; investing internationally in fixed income securities; investing in other asset classes and financial instruments, either directly or through investment vehicles, and investing in subsidiaries and associated businesses.”

Wednesday, February 26, 2014

What We're Reading ~ Analytical Links 2/26/14

Excerpts from Warren Buffett's upcoming annual letter [Fortune]

A look at 2014's best online brokers [Stockbrokers]

On adapting as an investor [ReformedBroker]

Is value investing bred in the bone? [WSJ]

Don't fall in love with your stocks [Marketwatch]

On the MBA vs CFA debate [CNBC]

A pitch on Discovery Communications [SumZero]

American shoppers are making a giant shift to dollar stores [QZ]

Vodafone cable deals interest complicates possibility of AT&T deal [WSJ]

The internet is F'd [The Verge]

Social advertising economics [Morally Bankrupt]

On what Facebook's acquisition of Whatsapp really means [Benedict Evans]

A look at Spirit Airlines [NPR]

A conversation about young Wall Streeters [Dealbook]

Gross vs El-Erian: inside the showdown atop the world's biggest bond firm [WSJ]

Lee Cooperman Ramps Up Chimera Position

Lee Cooperman of Omega Advisors has filed a 13D with the SEC regarding shares of Chimera Investment Corp (CIM).  Per the filing, Cooperman now owns 7.6% of the company with over 77.8 million shares.

This marks a sizable increase of over 62.1 million shares since the end of 2013 when he only owned 15.7 million shares.  The filing was required due to activity on February 24th.

The activist filing indicates Cooperman has met with management and talked with them "regarding the Issuer’s operations, business, strategies and strategic direction. These discussions have reviewed, and may continue to review, options for enhancing shareholder value through various strategic alternatives, improving the Issuer’s operational and financial execution, and general corporate matters."

Per Google Finance, Chimera Investment Corp is "a specialty finance company that invests, either directly or indirectly through its subsidiaries, in residential mortgage-backed securities (RMBS), residential mortgage loans, commercial mortgage loans, real estate-related securities and various other asset classes. The Company is managed by Fixed Income Discount Advisory Company (FIDAC), an investment advisor registered with the Securities and Exchange Commission (SEC)."

For more on this manager, check out some of Lee Cooperman's other recent portfolio activity here.

JANA Partners Updates QEP Resources Stake

Barry Rosenstein's activist hedge fund JANA Partners has filed an amended 13D with the SEC updating their stake in QEP Resources (QEP).  Per the filing, JANA now owns 9.4% of QEP with over 16.875 million shares.

This means they've increased their stake by around 3 million shares in January.  At the same time, they also indicated they trimmed their stake ever-so-slightly more recently (from 16.9 down to 16.8 million shares).  We highlighted when JANA first went activist on QEP back in October of 2013.

JANA also entered an agreement with the company where William Thacker joined the board and will serve until QEP separates its midstream business.

Per Google Finance, QEP Resources is "a holding company. The Company operates in three lines of business: gas and oil exploration and production, midstream field services, and energy marketing. It conducted through three principal subsidiaries: QEP Energy Company (QEP Energy) acquires, explores for, develops and produces natural gas, oil, and natural gas liquids (NGL); QEP Field Services Company (QEP Field Services) provides midstream field services, including natural gas gathering, processing, compression and treating services for affiliates and third parties; andQEP Marketing Company (QEP Marketing) markets affiliate and third-party natural gas and oil, provides risk-management services, and owns and operates an underground gas-storage reservoir."

For more on this hedge fund we've posted up JANA's thesis on Equinix from their Q4 letter.