Friday, March 21, 2014

What We're Reading ~ Hedge Fund Links 3/21/14

Jack Schwager's new book: The Little Book of Market Wizards [Amazon]

Klarman warns of impending asset price bubble [CNBC]

Credit Suisse: Hedge fund AUM to hit $3 trillion in 2014 [ValueWalk]

Carl Icahn proposes eBay IPO 20% of PayPal [Shareholders Square Table]

Hedge funds poised to gain from Alibaba IPO [II Alpha]

Ex-IMF chief Strauss-Kahn aims for $2 billion hedge fund [Hedgeworld]

The do's and don'ts of raising institutional capital [Absolute Return]

Team portfolio management outperforms [Morningstar]

Imagining a future of lower hedge fund fees [Dealbook]

Wednesday, March 19, 2014

What We're Reading ~ Analytical Links 3/19/14

Meb Faber's new book: Global Value [Amazon]

Why we're awful at assessing risk [Morgan Housel]

Short sellers' new favorite platform: Twitter [Buzzfeed]

The most important economic chart [House of Debt]

America's weird enduring love affair with cars and houses [Atlantic]

Addressing growing student debt [Econbrowser]

One little watched indicator for rising rates is flashing red [Investment News]

Saving, lending and tapering combine in perfect storm [Scott Grannis]

Hertz is in the driver's seat [Barrons]

American Express to spin off business travel unit [Bloomberg]

On CBS' IPO of its Americas Outdoor unit [Hollywood Reporter]

Assessing risk in China's shadow banking system [Triple Crisis]

What if all of Africa was as digital as Kenya? [Financial Access]

Russian richest face margin calls with billions at stake [Bloomberg]

Uh, warning sign? 3 reasons to tap home equity to buy stocks [MSN Money]

An interview with Bill Gates [Rolling Stone]

Interview with Apple's Jonathan Ive [Time]

Tuesday, March 18, 2014

Join Market Folly's 5th Annual Free March Madness Bracket Contest

March madness is here again and for the 5th year in a row, Market Folly will be hosting its annual bracket contest for fellow college basketball fans.  Entry is completely free!

Join Market Folly Madness

To join the free contest, please click this link
(If you don't have a CBS Sports account, simply register for free)

The password to join the contest group is: folly


1st place: A free 1-year subscription to our Hedge Fund Wisdom premium publication (a $300 value).

2nd place: A free copy of Howard Marks' popular book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

To be entered into the contest, you MUST fill out your bracket before the main games start this Thursday!  Only 1 entry per person is allowed.  Good luck!

Soros Fund Ups Penn Virginia Stake, Files 13D

George Soros' family office Soros Fund Management has filed a 13D with the SEC regarding shares of Penn Virginia (PVA).  Per the filing, Soros has disclosed a 9.18% ownership stake in PVA with just over 6 million shares.

This means they've upped their position by 173,664 shares since the end of 2013.  The filing was required due to activity on March 12th.

The activist 13D filing indicates that they've met with management from time to time regarding "the business, assets, prospects and strategic alternatives and direction."  Soros Fund says the company has been very well managed and think the company should enhance management's financial incentives.  At the same time, the family office believes Penn Virginia should explore strategic alternatives.

You can view additional recent Soros Fund portfolio activity here.

Per Google Finance, Penn Virginia is "an independent oil and gas company engaged primarily in the exploration, development and production of oil, natural gas liquids (NGL) and natural gas in various domestic onshore regions of the United States, including Texas, the Mid-Continent and Mississippi."

JANA Partners Trims URS Position, Nominates Board Members

Barry Rosenstein's hedge fund firm JANA Partners has filed an amended 13D with the SEC regarding their position in URS (URS).  Per the filing, JANA now owns 9.4% of URS with over 6.74 million shares.

This marks a slight decrease in their stake as they sold 437,740 shares since their last disclosure.  The filing was made due to activity on March 13th but the fine print highlights that they were selling in early March at prices around $47.xx.

JANA and the company have entered into a cooperation agreement where the company will increase the size of its board to 14 and will recommend that shareholders vote to elect JANA's nominees.  URS' board will also establish a Value Creation Committee to evaluate all options for enhancing shareholder value.  This committee will engage an investment bank to conduct a strategic review, engage a cost consultant to review things, and review management's compensation structure.

Of the agreement, Rosenstein says,

“We have appreciated our constructive dialogue with Martin Koffel and his team. We share their view that the Company is significantly undervalued, particularly given its strong cash flows and the valuable work Martin and his team have done over many years to ensure that URS is well-positioned to meet the needs of its clients. I am confident that the addition of four highly-qualified directors and the formation of the Value Creation Committee will help unlock this value for all shareholders.”

We highlighted JANA's previous URS activity where they requested the company to delay the deadline to nominate board members.

You can view other recent portfolio activity from JANA Partners here.

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."

Monday, March 17, 2014

Value Investing Congress Discount Expires in One Week

If you missed it, MarketFolly readers receive a $500 discount to the upcoming Value Investing Congress in Las Vegas on April 3rd and 4th.  This is a reminder to take advantage of these savings because the discount expires in one week.

Discount Code

Registration Link:
Discount Code: FOLLY2

Conference Details

The event takes place at Encore at Wynn in Las Vegas on April 3rd and 4th, only a few weeks away.  Hear the latest hedge fund investment ideas and network with other investors.  And since the event ends on Friday, stay the weekend in Vegas and have some more fun.

Hedge Fund Presentations From

- Eric Sprott, Sprott Asset Management
- Lisa Rapuano, Lane Five Capital
- Carlo Cannell, Cannell Capital
- Tom Russo, Gardner Russo & Gardner 
- Sahm Adrangi, Kerrisdale Capital
- Whitney Tilson, Kase Capital
- Daniel Miller, Gabelli Funds 
- Zeke Ashton, Centaur Capital Partners
- Isaac Schwartz, Robotti & Co
- David Hurwitz, SC Fundamental
- Michael Kao, Akanthos Capital
- Albert Yong & Chan Lee, Petra Capital
- John Lewis, Osmium Partners 
- Tim Eriksen, Eriksen Capital
- Dan Ferris, Extreme Value 
- Chris Mayer, Agora Financial
- David Neuhauser, Livermore Partners 
- Richard Lashley, PL Capital
- Arnaud Ajdler, Engine Capital 
- Eric Andersen, Western Standard 
- Mystery short-seller: "The Sleuth of Wall Street"

Discount Expires in One Week

Take advantage of the discount before it expires:  Click here to register and use discount code: FOLLY2


Hoplite Capital Reveals SunEdison Stake

John Lykouretzos' hedge fund firm Hoplite Capital has filed a 13G with the SEC and revealed a new equity position in SunEdison (SUNE).  Per the filing, the hedge fund now owns 5.99% of SUNE with over 16 million shares.

The filing was made due to activity on February 26th.  Omega Advisors' Lee Cooperman highlighted his fondness for SUNE a few months back as well, as the company is spinning off its money-losing semiconductor business.

Per Google Finance, SunEdison is "formerly MEMC Electronic Materials, Inc is engaged in the development, manufacture and sale of silicon wafers. The Company is a developer and seller of photovoltaic energy solutions. Through Solar Materials and Solar Energy (SunEdison), it is a developer of solar energy projects. The Company operates in two segments: semiconductor materials and solar energy. The Company’s Solar Energy segment includes the operations of its old Solar Materials segment, as well as its SunEdison business. In the Semiconductor Materials, the Company offers wafers with a variety of features. The Company’s wafers vary in size, surface features, composition, purity levels, crystal properties and electrical properties

You can view some past portfolio activity from Hoplite here.

Luxor Capital Acquires Convertible Preferred Stock in Altisource Asset Management

Hedge fund firm Luxor Capital has acquired 250,000 shares of convertible preferred stock in Altisource Asset Management (AAMC), the company announced today.

AAMC announced a $300 million buyback and raised $250 million from the private placement of these shares to Luxor.  The hedge fund won't receive dividends and the conversion price is $1,250 per share.

Mortgage Servicers Under Scrutiny

Altisource Asset Management is one of the companies in Bill Erbey's empire (along with Ocwen Financial (OCN), Altisource Portfolio Solutions (ASPS) and Altisource Residential (RESI)).  Shares of numerous of these companies have been under fire this year as regulatory scrutiny on mortgage servicers has picked up.  In the past, we've highlighted the investment thesis on ASPS.

Hedge Funds Involved in MSR-Related Plays

At the end of the fourth quarter (and before the scrutiny intensified), numerous hedge funds were involved in these companies.  Given the volatility in shares, it's hard to say who is still involved besides Luxor.  But here's a list of top holders as of Q4 2013:

AAMC: SAB Capital Management, Neuberger Berman, Tiger Eye Capital, Luxor Capital, Long Pond Capital, Capital Research Global Investors, White Elm Capital, Tyrian Investments

OCN: Capital Research Global Investors, Neuberger Berman, Egerton Capital, Pennant Capital, Pine River Capital, White Elm Capital,Tyrian Investments

ASPS: Neuberger Berman, Luxor Capital, Renaissance Technologies, Omega Advisors, SAB Capital, White Elm Capital, Tiger Eye Capital,Tyrian Investments

RESI: Capital Research Global Investors, SAB Capital, BlackRock, Bloom Tree Partners, Neuberger Berman, Hayman Capital

Last week, Kyle Bass' hedge fund Hayman Capital boosted its stake in Nationstar Mortgage Holdings as well.