Thursday, July 2, 2015

Lee Cooperman Increases Loral Space & Communcations Stake

Omega Advisors' Lee Cooperman has filed a 13G with the SEC regarding his position in Loral Space & Communications (LORL).  Per the filing, Cooperman now owns 5.21% of the company with over 1.11 million shares.

This marks an increase in his position size of 94,225 shares since the end of the first quarter.  The filing was made due to activity on June 25th.

We also highlighted some other recent portfolio activity from Cooperman here.

Per Google Finance, Loral Space & Communications is "a satellite communications company. The Company, through its ownership interests in affiliates, is engaged in satellite-based communications services. The Company participates in satellite services operations through its 62.8% economic interest in Telesat Holdings Inc. (Telesat Holdco), which owns Telesat Canada (Telesat). Telesat owns and leases a satellite fleet that operates in geosynchronous earth orbit approximately 22,000 miles above the equator. The Company also own 56% of XTAR, LLC (XTAR), a joint venture between Loral and Hisdesat Servicios Estrategicos S.A. (Hisdesat). XTAR owns and operates an X-band satellite. Telesat earns revenue by providing ground-based transmit and receive services, selling equipment, installing, managing and maintaining satellite networks, and providing consulting services in the field of satellite communications. Telesat categorizes its revenues into: Broadcast, Enterprise Services and Consulting & Other."

Tiger Global Boosts eHi Car Services Position

Chase Coleman's hedge fund Tiger Global has filed an amended 13D with the SEC regarding its stake in eHi Car Services (EHIC).  Per the filing, Tiger Global now owns 30.5% of the company with over 16.66 million shares.

This is an increase from the 9.4 million shares that Tiger Global originally disclosed via its new eHi Car Services stake back in late May.

Coleman's stake currently includes 666,666 class A shares held via 333,333 ADS's.  The filing notes that they bought 7,266,666 shares from the company at $6 per share.

We've highlighted some of Tiger Global's other recent portfolio activity here.

Per Google Finance, eHi is "a China-based holding company, which provides car rentals and car services to both individual customers and corporate clients. The Company utilizes mobile and Internet platforms to provide online to offline (O2O) mobility solutions. The Company operates its car rentals business primarily through its People's Republic of China (PRC) subsidiaries, Shanghai eHi Car Rental Co., Ltd. (eHi Rental) and eHi Auto Services (Jiangsu) Co., Ltd. (eHi Jiangsu), and their subsidiaries and branches." 

Greenlight Capital & Third Point Buy Green Brick Partners Shares in IPO

David Einhorn's Greenlight Capital and Dan Loeb's Third Point have both filed 13D's and Form 4's with the SEC regarding their stakes in Green Brick Partners (GRBK).

Green Brick came to be via a reverse merger with BioFuel (formerly BIOF) last year.  The company just completed its IPO and Einhorn and Loeb both acquired more shares.  In fact, they've been involved with the company since 2010.

Einhorn now owns 49.9% of Green Brick with over 24.12 million shares per the 13D he filed.  Greenlight bought over 8.4 million shares in the IPO.

Loeb now owns 16.9% of Green Brick with over 8.18 million shares per their separately filed 13D.  Third Point acquired over 2.84 million shares in the IPO at $10 per share.

It's also worth pointing out that the CEO Jim Brickman owns a substantial stake in the company as well and has a ton of industry experience.

Per Google Finance, Green Brick Partners "is a real estate operator. The Company is involved in the purchase and development of land for residential use, construction lending and home building operations. The Company operates through two segments: land development and homebuilding services. Within homebuilding services segment, the Company has two divisions: Texas and Georgia. The Company's land development segment conducts its business under the brand Green Brick Communities."

According to the company's website, Green Brick owns around 3,900 home sites and originates 1,000 secured first lien loans a year.  They also own a controlling interest in 4 homebuilders in Dallas, Texas as well as the fifth largest homebuilder in Atlanta, Georgia.

The company seems to be uniquely positioned due to its focus on Texas, and specifically, the Dallas / Fort Worth metroplex.  These cities/suburbs have very limited housing inventory and high demand, which has been pushing up home prices markedly.  This demand is in part caused by a large number of corporate relocations to the area.

Texas has been attracting these companies via Governor Greg Abbott's focus on tax breaks for businesses who come to the state.  He recently signed $4 billion in tax cuts for businesses and homeowners and also cut the business franchise tax by 25%.  Texas also has no state income tax.

The DFW area specifically has recently seen corporate relocations of Toyota's North American Headquarters, FedEx Office, Liberty Mutual, and many more.  This is bringing thousands of jobs to the area, resulting in a need for more housing supply. 

So home prices are up and inventory is down, but at the same time, many homebuilders are also facing increased costs on materials and labor (shortage of qualified subcontractors, etc).

Wednesday, July 1, 2015

What We're Reading ~ 7/1/15

Misbehaving: The Making of Behavioral Economics [Richard Thaler]

Investing is emotional [Reformed Broker]

On 'do something' syndrome [Farnam Street]

Four things the stock market has taught me [Morgan Housel]

An updated sum of the parts analysis on IAC Interactive [MicroFundy]

Railroads' competitive advantages are solid, but challenges lie ahead [Morningstar]

A brief look at Moody's (MCO) [Jnvestor]

How Fanuc quietly took over the world [Nikkei Asian Review]

Macau builds, but gamblers don't come [WSJ]

It's 1929 in China - here's a look at the recent mania [David Stockman]

A partnership with China to avoid world war [George Soros]

For American pundits, China isn't a country. It's a fantasyland [Washington Post]

Western firms caught off guard as Chinese shoppers flock to web [WSJ]

US short sellers betting on Canadian housing crash [National Post]

Persuasion depends mostly on audience [HBR]

Is this the office of the future? A look at WeWork [Bloomberg]

Julian Robertson on Greece/Europe, China & Various Stock Picks

CNBC's Kelly Evans interviewed Tiger Management's Julian Robertson and he talked about a range of topics, including Greece and Europe, China, Puerto Rico, and various stocks.

He doesn't seem too terribly concerned by the situation in Greece in and of itself, but if contagion spreads to Spain or Italy and potentially other countries, then things could get dicey.

Robertson says European equities "have been a very good place to be and may still be ... but you certainly want to hedge the currency."

His main concern now is that we're in the midst of a serious credit bubble.  Money that normally would flow into bonds has been forced into stocks.  This is something he's mentioned previously as well.

On Chinese equities, he notes, "I think the prospects for Chinese companies... some of them are very great.  I have changed from Alibaba (BABA) to (JD) ... JD has an advantage in that it's never had any knock-off problems.  We are very bullish on JD now and we have sold Alibaba for it."  Our Hedge Fund Wisdom newsletter back in May highlighted that many Tiger Cub funds were betting big on JD.

Robertson continues to like Apple (AAPL) but he's not overly concerned about the Watch.  He said, "Apple would be selling at double or triple its present price now if this was the 70's or 80's."

Additionally, he continues to like Gilead Sciences (GILD).  He's been short Assured Guaranty (AGO) as well.

On his industry, Robertson notes that, "I think the hedge fund industry is suffering from the expansion of the industry."  He says now you're competing with so many other hedge funds whereas back in the day you were competing with less managers and less sophisticated rivals.

Embedded below is the video of Robertson's interview on CNBC:

For more on this legendary investor, head to Morgan Creek's Q1 letter on learning from Robertson.

ValueAct Capital Supports Willis Group Merger; Slightly Trims Adobe Systems Stake

Jeff Ubben's activist investment firm ValueAct Capital has filed a Form 4 with the SEC concerning Adobe Systems (ADBE) and a 13D regarding Willis Group (WSH).

Supports Willis Group Merger

Per the amended 13D filing, ValueAct continues to own 10.3% of WSH with over 18.4 million shares.  This is the same exposure they had at the end of Q1.

The company just entered into a merger agreement with Towers Watson (TW) and ValueAct has supported the transaction and will vote in favor of it.

ValueAct Slightly Trims Adobe Systems Stake

Per the Form 4, ValueAct trimmed its ADBE stake by selling 307,000 shares spread out over June 26th, 29th, and 30th.  They sold at prices of $83.55, $82.02, and $82.08.  ADBE currently trades around $81.  After these small sales, ValueAct still owns over 15.7 million shares of Adobe.

For more from this firm, we highlighted how they recently increased their Agrium stake as well.

Tuesday, June 30, 2015

Trian Fund Takes Activist Pentair Stake

Nelson Peltz's activist firm Trian Fund Management has filed a 13D with the SEC regarding shares of Pentair (PNR).  Per the filing, Trian now owns 7.24% of the company with over 13 million shares.

This is a brand new stake for Trian as they didn't own any shares as of the end of the first quarter.  The filing notes that they've engaged management already. 

They were out buying shares in May and June at prices between $61.9163 and $64.3024.  The firm also entered into call and put transactions (May 2016 and June 2018 calls).

Trian wants Pentair to expand via acquisitions and the Wall Street Journal has more color on their thinking here.

We've also recently highlighted other portfolio activity from Trian here.

Per Yahoo Finance, Pentair is "operates as a diversified industrial manufacturing company in the United States, Europe, and internationally. The company operates through Valves & Controls, Technical Solutions, Flow & Filtration Solutions, and Water Quality Systems segments. It designs, manufactures, markets, and services valves, fittings, automation and controls, and actuators, as well as provides engineering, design, inspection, maintenance, and repair services."

Bruce Richards' Wall Street Week Interview on Credit, Greece & More

Anthony Scaramucci and Gary Kaminsky's Wall Street Week has continued its streak of impressive guests and this week interviewed Bruce Richards of Marathon Asset Management.

Marathon focuses on global credit and manages around $12.5 billion. He thinks US equity markets are looking at 3-5% returns going forward given the vast run up over the past few years.  Overall, he says "it's a difficult time to invest."

However, he sees some opportunities in Europe as quantitative easing is just getting started over there and economies are growing and banks are well healed.

He also sees some good plays in emerging markets in debt in Brazil, Argentina, Mexico and others.  Additionally, he's involved in Puerto Rico via playing the Puerto Rico Electric Power Authority (PREPA).

Richards also talked about position sizing, noting that 5% is their max, as they favor diversification and typically build 1-2% position sizes.

Embedded below is the Wall Street Week video with Bruce Richards:

And in this web extra video clip, they sit down with Bruce Richards again to give an updated look at Greece given all the activity there:

For more great interviews, head to Carl Icahn on Wall Street Week as well as Jim Chanos on Wall Street Week.

Glenview Capital Adds To Tenet Healthcare Position

Larry Robbins' hedge fund firm Glenview Capital has filed a Form 4 with the SEC regarding its stake in Tenet Healthcare (THC).  Per the filing, Glenview now owns over 14.79 million shares. 

The Form 4 notes that Glenview was out buying 979,482 shares on June 25th at weighted average prices of $54.3028, $54.9934, and $55.924.  This is right around when the Supreme Court decision reaffirmed Obamacare subsidies and hospital stocks rocketed higher.

This has been a longstanding play for Glenview, and a highly successful one at that.  This was part of their basket of for-profit hospital stocks that they wagered would benefit from the Affordable Care Act (ACA).  THC has been their biggest play in the space.

We've also detailed some other portfolio activity from Glenview earlier this week.

Per Google Finance, Tenet Healthcare is "a healthcare services company. The Company operates regionally focused, integrated healthcare delivery networks in large urban and suburban markets."

Three Bays Capital Increases Cypress Semiconductor Stake

Matthew Sidman's hedge fund firm Three Bays Capital has filed a 13G with the SEC regarding shares of Cypress Semiconductor (CY).  Per the filing, Three Bays now owns 5.6% of the company with 18.49 million shares.

This is a sizable increase over the 8.2 million shares the fund owned at the end of the first quarter.  The filing was made due to activity on June 17th.  Since the end of Q1, shares of CY have traded down from $14 to current levels of around $11.56, prompting Three Bays to add to its stake.

About Three Bays Capital

This is the first time this hedge fund has been mentioned on the site.  Sidman founded Three Bays after previously working at Highfields Capital.  It launched with around $500 million in 2013 but its latest 13F filing shows US assets of $2.37 billion as of the end of Q1 2015.

About Cypress Semiconductor

Per Google Finance, Cypress Semiconductor is "a provider of mixed-signal programmable solutions. The Company's offerings include PSoC 1, PSoC 3, PSoC 4 and PSoC 5LP programmable system-on-chip families. It caters to markets, including industrial, mobile handsets, consumer, computation, data communications, automotive and military. The Company operates in four segments: Programmable Systems Division, Memory Products Division, Data Communications Division and Emerging Technologies Division. The Programmable Solutions Division designs and develops solutions for end-product manufacturers. The Memory Products Division designs and manufactures SRAM products and non-volatile RAMs (random access memories). The Data Communications Division focuses on solutions for industrial, handset and consumer applications. The Emerging Technologies Division consists of the Company's subsidiaries, AgigA Tech, Inc. and Deca Technologies, Inc."

Blue Ridge Capital Discloses Fitbit Stake

John Griffin's hedge fund firm Blue Ridge Capital has filed a 13G with the SEC regarding shares of Fitbit (FIT).  Per the filing, Blue Ridge owns 8.32% of the company with 3.5 million shares.

This is a newly disclosed position for the firm as Fitbit recently completed its initial public offering (IPO).  The filing was made due to activity on June 18th.

Per Google Finance, Fitbit is "a provider of health and fitness products. The Company's Fitbit platform combines connected health and fitness devices with software and services, including an online dashboard and mobile applications, data analytics, motivational and social tools, personalized insights, and virtual coaching through fitness plans and interactive workouts. It offers a number of fitness products, including Fitbit Zip, Fitbit One, Fitbit Flex, Fitbit Charge, Fitbit Charge HR, Fitbit Surge and Aria. Its wrist-based and clippable devices automatically track users’ daily steps, calories burned, distance traveled, floors climbed, and active minutes and display real-time feedback to encourage them to become more active in their daily lives. Fitbit Premium is its membership that serves as an around the clock virtual personal trainer delivered to users through any Web browser. It operates FitStar, a provider of interactive video-based exercise experiences on mobile devices and computers."

Monday, June 29, 2015

Viking Global Increases Esperion Therapeutics Stake

Andreas Halvorsen's hedge fund firm Viking Global has just filed a 13G with the SEC regarding Esperion Therapeutics (ESPR).  Viking now owns 5.9% of the company with over 1.33 million shares.

This is a sizable increase over the 136,919 shares they owned at the end of the first quarter.  This new filing was made due to activity on June 18th.

You can view additional portfolio activity from Viking Global here.

Per Google Finance, Esperion is "a pharmaceutical company focused on developing and commercializing oral, low-density lipoprotein cholesterol (LDL-cholesterol) lowering therapies for the treatment of patients with hypercholesterolemia and other cardio-metabolic risk markers. The Company's primary activities include conducting research and development activities, including nonclinical, preclinical and clinical testing, performing business and financial planning, recruiting personnel, and raising capital. ETC-1002, the Company's lead product candidate, is an orally available, once-daily small molecule designed to lower LDL-cholesterol levels and avoid the side effects associated with other LDL-cholesterol lowering therapies currently available. ETC-1002 is being developed for patients with hypercholesterolemia. One completed Phase IIb clinical study and a second that is nearing completion build upon a Phase I and Phase II clinical development program for ETC-1002."

Glenview Capital Ramps Up Manpower Group Exposure

Larry Robbins' hedge fund firm Glenview Capital has filed a 13G with the SEC regarding shares of Manpower Group (MAN).  Per the filing, Glenview now owns 7.24% of the company with over 5.66 million shares.

This marks a sizable increase over the 2.26 million shares they owned at the end of the first quarter.  The filing was made due to activity on June 15th.

You can see more recent Glenview portfolio activity here.

Per Google Finance, Manpower Group is "a provider of workforce solutions and services. The Company’s services include recruitment and assessment; training and development; career management; outsourcing, and workforce consulting. Training and development offer a portfolio of training courses and leadership development solutions. The Company provides clients with outsourcing services related to human resources functions primarily in the areas of recruiting and workforce-intensive initiatives. The Company offers various brands, which include Manpower; Experis; Right Management, and ManpowerGroup Solutions."

Plymouth Lane Capital Goes Activist on Martha Stewart Living Omnimedia

Jonathan Salinas' hedge fund firm Plymouth Lane Capital has filed a 13D with the SEC regarding Martha Stewart Living Omnimedia (MSO).  Per the filing, Plymouth Lane now owns 10.9% of the company with over 3.55 million shares.

Per the filing, Salinas' firm was acquiring shares throughout May and June at prices between $4.90 and $6.97.

The 13D notes that after the company's recent merger agreement, the hedge fund plans to engage with management of the company.  Martha Stewart is selling itself to Sequential Brands Group (SQBG).

We also previously highlighted some previous portfolio activity from Plymouth Lane Capital here.

About Plymouth Lane Capital

This is the second time the fund's been featured on the site, so here's some background for those who missed it:  Plymouth Lane primarily operates an equity strategy and was launched in April 2013. Prior to founding Plymouth Lane, Jon Salinas worked at Marble Arch Investments and earned his MBA from Columbia Business School.

At a prior Columbia Business School conference, Salinas noted that you have to focus on the margin of safety if it's an event-driven idea. But if it's a compounder-type business, he said you have to have high confidence that earnings will compound at the rate expected. He also mentioned that if you're taking concentrated positions, it's detrimental to let thesis creep go unnoticed. If evidence contrary to your thesis pops up, you have to be able to recognize it and act.

About Martha Stewart Living Omnimedia 

Per Google Finance, the company is "a global lifestyle company. The Company operates in three segments: Publishing, Merchandising and Broadcasting. The Publishing segment primarily consists of the Company's operations related to its magazines and books, as well as its digital operations, which includes the Website, The Merchandising segment primarily consists of the Company's operations related to the design and branding of merchandise and related collateral and packaging materials that are distributed by its retail and manufacturing partners. The Merchandising segment also includes the licensing of talent services for television programming. The Broadcasting segment consists of the Company's limited television operations and its satellite radio operations. Its Website includes Martha Stewart Living, Martha Stewart Collection, Martha Stewart Pets, Martha Stewart Crafts, Martha Stewart Weddings, Everyday Food and Emeril."

Hedge Fund Links ~ 6/29/15

Panic among hedge fund investors in Greece [NYTimes]

Citadel preps new stock-picking unit [WSJ]

John Paulson riding healthcare with new fund [CNBC]

Profile of Oaktree's Howard Marks [Observer]

Where Coatue is betting these days [CNBC]

Ackman's Pershing Square raising up to $1b in senior notes [FINalternatives]

Hedge funds score big gains [WSJ]

Brevan Howard grooming managers in-house [Bloomberg]

The silent hedge fund apocalypse [FT Alphaville]

Why some 'Tiger Cub' hedge funds are shutting down [CNBC]

Paul Tudor Jones forms LaunchPad to train traders [FINalternatives]

Hedge funds boost investment in Credit Karma [FINalternatives]

Hedge funds for masses lose shine [Bloomberg]