Wednesday, June 17, 2015

What We're Reading ~ 6/17/15

How to judge a business's durability [Gannon & Hoang on Investing]

Make more money by doing less [Abnormal Returns]

Learning to love volatility [Farnam Street]

The struggle to define risk [A Wealth of Common Sense]

Confirmation bias: how intelligent people develop totally incorrect beliefs [PsyBlog]

A look at Heico [Jnvestor]

John Deere: great 'cannibal' or cyclical trap? [Value and Opportunity]

Precision Castparts shares offer a rare bargain [Barrons]

Profile of T-Mobile's John Legere [Fast Company]

US births up after years of decline [AP]

P/E multiples versus (past and future) returns and volatility [EconompicData]

How Hermes' legendary Birkin bag remains dominant [Bloomberg]

A look at Expedia and Dara Khosrowshahi [Barrons]

On tech unicorns [Stratechery]

Andreessen Horowitz: why we're not in the next tech bubble [Fortune]

How Facebook is eating the $140 billion hardware market [Business Insider]

ValueAct Capital Increases Agrium Stake

Jeff Ubben's activist investment firm ValueAct Capital has filed an amended 13D with the SEC regarding its position in Agrium (AGU).  Per the filing, ValueAct now owns 6.8% of the company with over 9.72 million shares.

This marks around a 22% increase in the number of shares owned since the end of the first quarter.  The filing indicates ValueAct was buying AGU in late April, late May, and early June.  They purchased shares between $102.54 and $104.08.  AGU currently still trades within that range.

ValueAct also recently trimmed their large Valeant Pharmaceuticals stake and definitely has more cash on hand to deploy if desired.

Per Google Finance, Agrium is "a Canada-based producer and marketer of nutrients for agricultural and industrial markets. Agrium is a retailer of agricultural products and services in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay and a multi-national producer and wholesale marketer of nutrients for agricultural and industrial markets. The Company operates through its two business units: Retail and Wholesale. Agrium Wholesale owns 16 production facilities in North and South America across the nitrogen, potash and phosphate spectrum; two mines; and a distribution and storage network throughout North America and internationally through Agrium Europe. Agrium Retail operates approximately 1,375 retail locations, 57 terminals, 8 plants and 18 distribution centers in North and South America, as well as Australia."

PointState Capital Starts Amaya Position

Zach Schreiber's hedge fund firm PointState Capital has filed a 13G with the SEC regarding shares of Amaya (AYA).  Per the filing, PointState now owns 8.76% of the company with over 11.66 million shares.

This is a newly disclosed equity stake for the firm as they did not report ownership at the end of the first quarter.  The filing was made due to activity on June 11th.

Per Yahoo Finance, Amaya "provides technology-based solutions, products, and services for global gaming and interactive entertainment industries worldwide. It operates through two segments, Business-to- Consumer (B2C) and Business-to-Business (B2B)."

Tuesday, June 16, 2015

2 Free Issues of Singular Diligence For Our Readers

Investors Geoff Gannon, Quan Hoang, and Tobias Carlisle write a long-term, buy-and-hold value investing newsletter called Singular Diligence.

They want to share two free issues with Market Folly readers.

Each 12,000 word issue of Singular Diligence covers a single stock.  That stock could be big or small, foreign or domestic.

Obscure helicopter rescue hoist maker Breeze-Eastern is the most recent domestic small cap pick.  And iconic watch maker Swatch is a recent foreign large cap pick.

Please click here to download the two issues for free.

If you'd like to learn more or subscribe to Singular Diligence, visit

Monday, June 15, 2015

Farallon Capital Increases Perfect World Stake

Andrew Spokes' hedge fund firm Farallon Capital has filed a 13D with the SEC regarding their position in Perfect World (PWRD).  Per the filing, Farallon now owns 8.6% of the company with 18,950,000 shares.

This marks an sizable increase in their position size after owning only 1.32 million shares as of the end of the first quarter.  The 13D contains the standard boilerplate that they might engage the company, etc.

Perfect World received a takeout offer from its Chairman, Michael Yufeng Chi, to acquire all shares for $20 per ADR share.  Farallon was out buying shares in April, sporadically throughout May, and into early June at prices around $19.90.

You can view additional portfolio activity from Farallon here.

Per Google Finance, Perfect World is "an online game developer and operator in China. The Company develops online games based on its game engines and game development platforms. Its technology capabilities consist of its game engines, game development platforms and real-time anti-cheating, all developed and built by its development team. The Company operates in two segments: PRC operations and International operations."

Corsair Capital Boosts Globe Specialty Metals Position

Jay Petschek and Steven Major's hedge fund firm Corsair Capital has filed a 13G with the SEC on their position in Globe Specialty Metals (GSM).  Per the filing, Corsair now owns 5.01% of the company with over 3.69 million shares.

This marks an increase in their position size of almost 2 million shares since the end of the first quarter.  The filing was made due to activity on May 20th.  They've owned this stock for many years now.

For more from this hedge fund, check out Corsair's Q1 letter here with their thesis on Orbital ATK.

Per Google Finance, Globe Specialty Metals is "is the producer of silicon metal and silicon-based alloys. The Company’s customers include silicone chemical, aluminum and steel manufacturers, auto companies and their suppliers, ductile iron foundries, manufacturers of photovoltaic solar cells and computer chips, and concrete producers. The Company operates in five segments: GMI is a manufacturer of silicon metal and silicon-based alloys and a provider of metallurgical coal for the silicon metal and silicon-based alloys industries; Globe Metales is a manufacturer of silicon-based alloys; Solsil is a developer of upgraded metallurgical grade silicon metal; Corporate segment include general corporate expenses, investments, and related investment income, and the other segment include Yonvey’s electrode production operations, as well as Siltech’s silicon alloy production and certain other distribution operations for the sale of silicon metal and silicon-based alloys."

Pleasant Lake Partners Files 13D on MagnaChip

Jonathan Lennon's hedge fund firm Pleasant Lake Partners has filed a 13D with the SEC regarding its position in MagnaChip (MX).  Per the filing, Pleasant Lake now owns 7.7% of the ompany with over 2.64 million shares.

This is an increase over the 919,211 shares that they owned at the end of the first quarter.  The filing indicates they were out buying throughout April, May, and into June at a wide range of prices from as low as $5.37 to as high as $7.80.  They also bought call options that expire this week as well as in September at a $7.50 strike.  MX shares currently trade around $7.49.

The 13D filing also contains the standard boilerplate about potentially meeting with management, etc.

About Pleasant Lake Partners

Prior to launching his hedge fund, Lennon previously worked as a senior analyst at John Thaler's JAT Capital.  He founded Pleasant Lake in 2012 and runs a long/short equity strategy.

About Magna Chip

Per Google Finance, Magna Chip is "a South Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for high-volume consumer applications. The company operates through three segments: Display Solutions, Power Solutions, and Semiconductor Manufacturing Services. Display Solutions products include display drivers that cover a range of flat panel displays and mobile multimedia devices. Its Power Solutions products include discrete and integrated circuit solutions for power management in high-volume consumer applications. Its Semiconductor Manufacturing Services segment provides specialty analog and mixed-signal foundry services for fabless semiconductor companies that serve the consumer, computing and wireless end markets."

Jeff Saut's Latest Market Commentary: "Rescue Me"

It's been a while since we checked in on market strategist Jeff Saut, so embedded below is his latest commentary entitled "Rescue Me":

You can download a .pdf copy here.