Tuesday, May 31, 2016

Carl Icahn Reveals Allergan Stake

Activist investor Carl Icahn today in a statement revealed he has taken a position in Allergan (AGN).  On his website, he writes:

"We have recently acquired a large position in Allergan and are very supportive of CEO Brent Saunders. We were instrumental in bringing Brent on board as the new CEO of Forest Labs a few years ago and worked cooperatively and constructively with him to help increase value for all Forest shareholders. Less than a year later Forest was acquired by Actavis (which subsequently merged with Allergan) resulting in massive gains for Forest shareholders. While we at that time disposed of our position in Forest, we still have always maintained great respect for Brent. We have every confidence in Brent’s ability to enhance value for all Allergan shareholders."

As our brand new Hedge Fund Wisdom issue detailed last week, AGN is a crowded hedge fund trade.  The company's merger with Pfizer (PFE) was called off after the US government implemented anti-inversion rules.  AGN has now basically become a capital deployment optionality story.

Howard Marks' Latest Memo: Economic Reality

Oaktree Capital's chairman Howard Marks is out with his latest memo entitled Economic Reality.  If you haven't spent time reading any of Marks' stuff before, all you really need to know is that Warren Buffett reads them religiously.

Marks' latest letter touches on the actions of central banks and governments and the underlying effects on economies.

Embedded below is Howard Marks' latest memo: 'Economic Reality'

You can download a .pdf copy here.

To hear more from Oaktree's chairman, head to Howard Marks' talk at Google.

For more recent fund manager letters, head to Third Point's Q1 letter and Greenlight Capital's Q1 letter.

Corvex Management Boosts Signet Jewelers Stake, Files 13D

Keith Meister's activist hedge fund Corvex Management has filed an amended 13D with the SEC on shares of Signet Jewelers (SIG).  Per the filing, Corvex now owns 8.3% of Signet with over 6.52 million shares.

The filing notes that Corvex "commend the Issuer for the announcement in its quarterly earnings call on May 26, 2016 of its commitment to conduct, along with its advisor Goldman Sachs, a strategic evaluation of its credit portfolio.  The Reporting Persons strongly support the Issuer’s review of credit portfolio alternatives, and believes that it is essential that the Issuer complete this review as quickly as reasonably practicable, and thereafter promptly both announce to the shareholders and implement the actions which were determined to create the greatest enhancement to financial and shareholder value."

Corvex also indicates they purchased shares of SIG in April and May with the bulk of the activity coming on May 26th at $98.25 per share.

The firm previously owned 5.93 million Signet shares at the end of the first quarter.

Per Google Finance, Signet Jewelers is "a retailer of jewelry, watches and associated services in the United States, Canada and the United Kingdom. The Company's segments are the Sterling Jewelers division, the UK Jewelry division, the Zale division, which consists of Zale Jewelry and Piercing Pagoda, and the Other segment. The Other segment includes subsidiaries involved in purchasing and conversion of rough diamonds to polished stones. The Company operates retail jewelry stores in various real estate formats, including mall-based, free-standing, strip center and outlet store locations. It operates approximately 3,620 stores and kiosks across approximately five million square feet of retail space. The Sterling Jewelers division operates approximately 1,540 stores. Its stores operate nationally in malls and off-mall locations as Kay Jewelers, and regionally under various mall-based brands. Zale Jewelry consists of brands, including Zales Jewelers and Zales Outlet."

Friday, May 27, 2016

Hedge Fund Links ~ 5/27/16

The 2016 rich list of the world's top earning hedge fund managers [ii alpha]

3 lessons from hedge funds' rise and (partial) fall [Morningstar]

John Burbank sees US recession, China devaluation within year [Bloomberg]

Some recent thoughts from David Tepper [Forbes]

Is stock shorting smart if you aren't Jim Chanos? [Barrons]

Tudor cuts fees on some funds [Bloomberg]

UBS prime brokerage crowded positions report [LadyFOHF]

Concerns grow over hedge fund bunching effect [eFinancialNews]

Hedge funds aren't what they used to be [Marketplace]

Calling the bottom for the hedge fund industry [CNBC]

We asked an expert why hedge funds still exist [Vice]

Insurance industry falling out of love with hedge funds [Bloomberg]

Hedge funds hold onto last year's favorites [ii alpha]

Goldman Sachs explains why hedge funds aren't magic anymore [Yahoo Fin]

Rise of the billionaire robots [The Guardian]

Money managers seek AIs 'deep learning' [FT]

Hedge funds may lose 25% of assets, Blackstone says [Bloomberg]

One hedge fund goes against industry titans on big China banks [Bloomberg]

Wednesday, May 25, 2016

What We're Reading ~ 5/25/16

How to make better investment decisions [Morgan Housel]

Why active management fell off a cliff - perhaps permanently [Reformed Broker]

Falsification: how to destroy your best ideas [Farnam Street]

Importance of ROIC: reinvestment vs legacy moats [Base Hit Investing]

Position sizing in value investing [Journeys of a Bumbling Trader]

8 big ideas from super investor Philip Fisher [Safal Niveshak]

JD.com (JD): a multi-decade compounder [Value Venture]

The race to 5G: inside the fight for the future of mobile [Tech Republic]

An inside look at Google Fiber [Recode]

The story of Facebook's biggest setback in India [The Guardian]

The most important investors of all time [The Irrelevant Investor]

On hero worship in investing [Clear Eyes Investing] 

The battle between startups & incumbents: distribution vs innovation [Andreessen Horowitz]

Why we still don't see a China hard landing [Mark Mobius]

The business of too much TV [Vulture]

Baby lull promises growing pains for economy [WSJ]

Luxury brands go on a diet [Bloomberg]

Tuesday, May 24, 2016

Berkshire Hathaway Acquires More Phillips 66

Warren Buffett's Berkshire Hathaway has filed a Form 4 with the SEC regarding its stake in Phillips 66 (PSX).  Per the filing, Berkshire was out buying PSX shares on May 19th, 20th, and 23rd.

They purchased 824,630 shares in total at weighted average prices ranging from $76.70 to $78.63.  After these buys, they now own over 76.37 million Phillips 66 shares.

We've previously highlighted how Buffett has been buying PSX across multiple quarters now.

Per Google Finance, Phillips 66 is "an energy manufacturing and logistics company with midstream, chemicals, refining and marketing and specialties businesses. The Company operates its business through four segments: midstream, chemicals, refining and marketing and specialties. It gathers, processes, transports and markets natural gas, and transports, fractionates and markets natural gas liquids (NGL) in the United States. The Chemical segment manufactures and markets petrochemicals and plastics. The Chemicals segment consists of its 50% equity investment in Chevron Phillips Chemical Company LLC (CPChem). The refining segment buys, sells and refines crude oil and other feedstocks into petroleum products (such as gasolines, distillates and aviation fuels) at 14 refineries, mainly in the United States and Europe. The Marketing and Specialties segment purchases for resale and markets refined petroleum products (such as gasolines, distillates and aviation fuels), mainly in the United States and Europe."

JANA Partners Reduces Walgreens Boots Alliance Position

Barry Rosenstein's hedge fund firm JANA Partners has filed a Form 4 with the SEC regarding its position in Walgreens Boots Alliance (WBA).  Per the filing, JANA sold 6 million shares on May 16th at $77.29.

After this transaction, JANA still owns over 4.57 million shares of WBA.  This was previously their second largest position.  They originally acquired shares in the third quarter of 2013.

Per Google Finance, Walgreens Boots Alliance "is a global pharmacy-led health and wellbeing enterprise. It operates through three segments: Retail Pharmacy USA, which consists of the Walgreens business, including the operation of retail drugstores and convenient care clinics, in addition to providing specialty pharmacy services; Retail Pharmacy International, which consists of the Alliance Boots pharmacy-led health and beauty stores, optical practices and related contract manufacturing operations, and Pharmaceutical Wholesale, which consists of the Alliance Boots pharmaceutical wholesaling and distribution businesses. Its portfolio of retail and business brands includes Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as global health and beauty product brands, including No7, Botanics, and Soap & Glory. Walgreens Boots Alliance, through its subsidiary, Liz Earle Beauty Co. Ltd, offers the Liz Earle skincare brand."

Trian Fund Buys More Bank of New York Mellon

Nelson Peltz's activist firm Trian Fund Management has filed a Form 4 with the SEC regarding its stake in Bank of New York Mellon (BK).  Per the filing, Trian acquired 20,700 shares of BK on May 16th at a weighted average price of $39.6531. 

After this transaction, they now own over 31.84 million shares of BK.  As we've previously highlighted, Trian was buying BK around these levels last year as well.

Per Google Finance, Bank of New York Mellon is "a provider of financial products and services in domestic and international markets. Through its two principal businesses, Investment Management and Investment Services, it serves institutions, corporations and high net worth individuals. For institutions and corporations, it provides investment management, trust and custody, foreign exchange, fund administration, global collateral services, securities lending, depositary receipts, corporate trust, global payment/cash management, banking services and clearing services. For individuals, it provides mutual funds, separate accounts, wealth management and private banking services. BNY Mellon’s investment management businesses provide investment products in different asset classes and investment styles."  Read more: http://www.marketfolly.com/search?q=bk&max-results=20&by-date=true#ixzz49amsK8Mj

Monday, May 23, 2016

Capitalize For Kids Investors Conference 2016

On October 26th and 27th, Capitalize for Kids will present their 3rd annual Investors Conference at Arcadian Court in Toronto, in partnership with the Sohn Conference Foundation.  More than 20 world-renowned money managers will be presenting their highest conviction ideas in front of 400 of the most prominent family offices, pension plans, and institutional investors in North America.

All proceeds are allocated to help solve the toughest challenges in children's brain and mental health.  Limited tickets and exclusive packages available.  You can find out more and register at: https://capitalizeforkids.org/

Confirmed Speakers

Ed Garden, Trian Fund Management

Jeffrey Smith, Starboard Value

Bruce Richards, Marathon Asset Management

Cliff Asness, AQR Capital

Brad Dunkley, Waratah Advisors

Tom Russo, Gardner Russo & Gardner

Tom Wagner, Knighthead Capital Management

Michael Gentile, Formula Growth

Ted Goldthorpe, Apollo Investment Corp

Nat Zilkha, KKR & Co

Jonathan Lewinsohn, Centerbridge Partners

Aaron Cowen, Suvretta Capital Management

Honourable Michael Wilson, Former Minister of Finance for Canada

Embedded below is the flyer for the event:

You can click here to register for the conference.

Hound Partners Files 13G on Infoblox

Jonathan Auerbach's hedge fund firm Hound Partners has filed a 13G with the SEC regarding shares of Infoblox (BLOX).  Per the filing, Hound now owns 6.2% of the company with over 3.6 million shares.

This is an increase over the 1.93 million shares Hound owned at the end of the first quarter, when they first showed a new long position in the name.  The latest filing was made due to activity on May 10th.

Per Google Finance, Infoblox "provides enterprise and service provider-class solutions to automate management of the critical network infrastructure services. The Company provides network control, network automation and domain name system (DNS) security though appliance-based solutions. The Company's solutions combine real-time Internet protocol address management (IPAM), automation of network control, change and configuration management processes and DNS-based infrastructure security in purpose-built physical and virtual appliances. The Company's functions include delivering critical network protocol services, such as dynamic host configuration protocol (DHCP), network change and configuration management, and network infrastructure security. The Company offers four product families: Core Network Services, Infrastructure Security, Cloud Network Automation, and Network Change and Configuration Management.."

Steadfast Capital Files 13G on Windstream

Robert Pitts Jr.'s hedge fund firm Steadfast Capital has filed a 13G on Windstream (WIN).  Per the filing, Steadfast nows  5.1% of WIN with over 4.92 million shares.

The filing was made due to activity on May 9th and this is a newly disclosed long.

For more from this hedge fund, head to see what other stock Steadfast recently disclosed a stake in.

Per Yahoo Finance, Windstream "provides network communications and technology solutions for consumers, businesses, enterprise organizations, and carrier partners in the United States."

Saturday, May 21, 2016

New Q1 2016 Hedge Fund Wisdom Issue Released Today

The new Q1 2016 issue of our Hedge Fund Wisdom newsletter is now available.  Subscribers, please login at www.hedgefundwisdom.com to download it!

Included in the brand new 82-page issue:

- Equity analysis of 2 stocks hedge funds have been buying: Find out why

- New consensus buy/sell lists: See the most popular stocks among hedge funds

- Latest portfolios of 25 top managers: See what Tepper, Mandel, Loeb & more are doing

- European market short positions disclosed when applicable

- Commentary on each fund's moves: We've been tracking them for 7 years

To Read the New Issue Immediately, Subscribe Below

1-year Subscription (4 issues): $299.99 per year

Quarterly Subscription: $89.99 per quarter

Want to pay by check or soft dollar account?  Email us: info (at) hedgefundwisdom (dot) com

Monday, May 16, 2016

Charlie Munger's Recommended Reading List

If you haven't noticed before, we've compiled a list of books recommended by top investors like Seth Klarman, Warren Buffett and many others on the right sidebar of the website.  This time around we'll look at picks from Charlie Munger, Warren Buffett's business partner at Berkshire Hathaway.

One quote from Munger always sticks out: "In my whole life, I have known no wise people who didn't read all the time - none, zero."  With that in mind, here's some of Charlie Munger's favorite books:

Charlie Munger's Recommended Reading List

  Influence: The Psychology of Persuasion by Robert Cialdini
Probably the most frequent recommendation from Munger

   The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy by Robert Hagstrom
Has actually been recommended by both Munger & Warren Buffett

   Getting to Yes: Negotiating Agreement Without Giving In 
by Roger Fisher & William Ury
Learn how to negotiate and resolve conflict

   Judgment in Managerial Decision Making by Max Bazerman
Learn how to recognize and overcome your biases

   Getting It Done: How to Lead When You're Not In Charge by Roger Fisher
You need an edge in order to reach solutions and effectively work with others

  Deep Simplicity: Bringing Order to Chaos and Complexity by John Gribbin
A look at the study of complex systems

  Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company by Andrew Grove
Reveals his strategy at Intel

  Andrew Carnegie by Joseph Frazier Wall
Biography of an industrialist genius, philanthropist, and enigma

  Titan: The Life of John D. Rockefeller by Ron Chernow
Story of history's first billionaire

  In The Plex: How Google Thinks, Works, and Shapes Our Lives
by Steven Levy
Recommended at the 2011 Berkshire Hathaway annual meeting

  Barbarians at the Gate: The Fall of RJR Nabisco 
by Bryan Burrough & John Helyar
"One of the finest, most compelling accounts of what happened to corporate America and Wall Street in the 1980's" ~ New York Times Book Review

  Hard Drive: Bill Gates and the Making of the Microsoft Empire
by James Wallace & Jim Erickson
The title says it all

  Conspiracy of Fools: A True Story by Kurt Eichenwald
The mind-boggling story of Enron

  Master of the Game  by Connie Bruck
Biography of a media mogul

  Models of My Life by Herbert Simon
Autobiography of a Nobel laureate looking at whether what he learned as a scientist helps explain other aspects of life

  Fiasco: The Inside Story of a Wall Street Trader by Frank Partnoy
A fascinating (and kind of crazy) look at the derivatives trading industry

  The Wealth and Poverty of Nations by David Landes
Why some nations achieve success and others don't

This isn't a comprehensive list (after all, Munger reads a ton).  But we've tried to focus on the most relevant business/finance books as a good starting point.

Books About Charlie Munger

And if you want to read up on Munger himself, there are a few great books in that regard as well.  Be sure to check out:

Poor Charlie's Almanack Edited by Peter Kaufman

Seeking Wisdom: From Darwin to Munger by Peter Bevelin

Charlie Munger: The Complete Investor by Tren Griffin

Damn Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger
by Janet Lowe

And if you still want even more reading material, head to Seth Klarman's favorite books and Warren Buffett's recommended reading list.  Or, simply check out the right sidebar on the website for picks from other top investors.

Friday, May 13, 2016

Mauboussin's Talk at Google: The Success Equation: Untangling Skill & Luck

This week, we're posting up the various "Talks at Google" that focus on investing.  These typically feature authors of well known investment books.  Next up is Michael Mauboussin who talked about his book The Success Equation: Untangling Skill and Luck in Business, Sports and Investing.

Mauboussin is well known for his work on the more psychological/behavioral aspects of investing.  We've previously featured his talk about developing an investment process.

His talk touches on the concepts of the roles luck and skill play in success and failure and how you can provide a framework to analyze their contributions.

Embedded below is the video of Mauboussin's talk at Google:

Be sure to check out Mauboussin's book The Success Equation as well as his past work, Think Twice: Harnessing the Power of Counterintuition.

Jason Zweig's Talk at Google: The Intelligent Investor & The Devil's Financial Dictionary

This week, we're posting up the various "Talks at Google" that focus on investing.  These typically feature authors of well known investment books.  Next up is Jason Zweig who talked about The Intelligent Investor and his latest book, The Devil's Financial Dictionary.

The latter basically sums up his learnings across three decades as an investment journalist.  Yale professor Robert Shiller said of the book: "This is the most amusing presentation of the principles of finance that I have ever seen."

Embedded below is the video of Jason Zweig's Talk at Google:

If you haven't read his newest book yet, check it out: The Devil's Financial Dictionary.  And don't forget the instant classic as well: The Intelligent Investor.

Thursday, May 12, 2016

SALT Conference Notes 2016: Griffin, Cooperman, Burbank, Chanos & More

The Skybridge Alternatives Conference, better known as the SALT Conference, is taking place in Las Vegas this week.  It's a multi-day affair with many speakers on a broad range of subjects.  We've condensed notes into primarily finance/investing thoughts from various hedge fund managers and investors below.

2016 SALT Conference Notes

Ken Griffin (Citadel):  Talked about how he built Citadel and the importance of culture at an organization.  'Avoid marrying a strategy' and instead focus on building a platform with the best people.  Business really taught him how to delegate and manage people.  On finding good talent: you've gotta be able to sell them on why they should leave and come to you.  You have to go out and find that talent instead of waiting for them to come to you.  The ones that 'knock on your door' aren't the best.  One interesting quote:  "Who is the number five manufacturer of personal computers?  Who cares?  We're in a more and more winner take all world."

Leon Cooperman (Omega Advisors):  He talked about a trend of investors moving from active to passive strategies and says that hedge fund performance can't really justify the fees these days, so fees need to come down.  He said that long-term (i.e. 'permanent') capital is doing good because they don't have to worry about lockups (citing Warren Buffett).  The other winner has been quant strategies.  Pitched the stock First Data (FDC) which recently IPO'd.  Says he's got around ~20% of his fund in structured credit at the moment.  Reiterated his belief that conditions for a recession are not present (a concept he's talked about for a while now).  Thinks the bubble is in fixed income.  Government bonds are a bad idea.  Likes Tetragon Financial, yields 7%, dividend coverage of 4x.  Buying a stock trading at half of book.

Kyle Bass (Hayman Capital):  Implied that investors need to lower their return expectations over the next few decades (5% global real return expectation).  Also agreed that fees for funds need to come down.  Says it's much harder to maintain investors than it is conviction.  Thinks we're in the early part of '07 in terms of credit/equity markets.  Says a hard landing in China is happening as we speak. Argues that China credit system is one of the biggest macro imbalances, something has to give sooner rather than later.  Hong Kong real estate is collapsing.

Roslyn Zhang (China Investment Corp):  Sovereign Wealth Fund.  Disappointed with hedge fund performance.  Compared Chinese retail investors to hedge fund herding.  Criticized those betting against the Chinese Yuan.  Argued that China's economy is still strong and that all of the building is due to the massive population; supply can be absorbed.

Sam Zell (Equity Group Investments):  Cost of regulation has gone up around 5x over the last decade.  Have been big investors in Brazil, Far East, Mexico. 

Ty Wallach (Paulson & Co):  Thinks specialty pharma stocks are oversold.  Specifically pointed out Valeant Pharmaceuticals (VRX) bonds.  Bought at 80cents on the dollar and says the co still has $10bn in equity value.  Could sell one of the many companies they've acquired if they need to cover debt payments.

Jeff Smith (Starboard Value): Activist investor.  Says settled with Yahoo (YHOO), put four new members on the board.  Notes the parts of the company are worth more than where its trading.  Core biz with $4bn in revenue, huge stake in Alibaba, Yahoo Japan, add it all up and it's more than the current market cap.  Said 'we're friendly but no one describes us as passive.'

Scott Ferguson (Sachem Head Capital):  Sold out of Zoetis (ZTS).  We noted how Pershing Square was also selling ZTS recently.  Ferguson was the one that brought the idea to Ackman to begin with (he used to work at Pershing).  Talked about how to change leadership and achieve things on behalf of investors: "Money's a great way to effectuate things" i.e. severance for getting rid of a CEO.  Says things are easier for activists these days and companies are more likely to engage. 

Clifton Robbins (Blue Harbour Group):  Activist investor.  Owns 10% of Investors Bancorp (ISBC), says it's trading at a discount to peers.  Also talked about Xilinx (XLNX), a net-cash semiconductor play; says they have some ideas as to how to utilize the balance sheet.

Michael Lewis (Author of Flash Boys and The Big Short):  Said he was surprised that both Moneyball and The Big Short were made into movies.  Said Christian Bale was dead-on with his interpretation of Michael Burry after just spending some hours with him.

Richard Chilton (Chilton Investments): Sherwin Williams (SHW): makes premium paint and coatings.  Says the company's purchase of Valspar was years in the making and they can repay the price with free cashflow in about 5 years.  Thinks there's a lot of synergies and margin overlap.  SHW does higher margins in paint/consumer and VAL does better margins in industrial coatings.  "You can't buy paint online."

John Lykouretzos (Hoplite Capital):  Takes a bit of an issue with the 'oligopoly' theme of airlines, saying it's still a competitive industry with margin pressure.  Bearish on the industry.  Main threats: excess capacity, union labor wage hikes, and of course higher oil prices.  Says that low cost carriers (LCC's) have basically destroyed the chance for legacy airlines to become a true oligopoly.  Thinks American Airlines (AAL) is the most compelling short play there.  Has some of the highest costs & exposure to rising oil.  High leverage.  Weakest FCF generation of the group.  Thinks that Southwest Airlines (LUV) can still add capacity even at higher oil prices (~$80 or so) and still generate high IRR.

John Burbank (Passport Capital):  Says China won't let outside companies 'win' especially Facebook.  "It's a hard place to win if you're not Chinese."  (While he didn't mention it, just look at Amazon's failed venture there as well).  Burbank owns Tencent (700.HK) with short Chinese Renminbi as partial hedge.  Thinks it isn't as much of a crowded trade as Facebook (FB) is.  His slide also said "Short FXI: Hedge out 'Old China' country-specific risk with China large cap ETF."

Jim Chanos (Kynikos Associates): Still short Cheniere Energy (LNG), calling it a 'pipe dream' and very expensive to peers.  Trades at 11-12x EV/EBITDA using "base case" 2021 EBITDA of $2.1bn.  Peers trading between 5-7x 2020 EBITDA.  Also commented on Alibaba (BABA) saying their accounting is dubious and that you don't really know what they're earning, calls it some of the most questionable he's ever seen. Chanos also recently talked about some of his short positions at the Sohn Conference.

For other recent hedge fund manager thoughts, head to our notes from Sohn Conference New York 2016.

Howard Marks' Talk at Google: The Most Important Thing

This week, we're posting up the various "Talks at Google" that focus on investing.  These typically feature authors of well known investment books.  Next up is Oaktree Capital's Howard Marks.  He is the author of The Most Important Thing: Uncommon Sense for the Thoughtful Investor.

Marks often shares wisdom in periodic memos that we always post on the site (you can scroll through his past letters here).  His thoughts are widely read (even by the likes of Warren Buffett) as they constantly feature enlightenment on various investing topics.

He is known for his belief of investing as part psychology and part finance.    In this talk he shares his wisdom as well as origins and inspirations for the book.

Embedded below is the video of Howard Marks' Talk at Google:

You can read Howard Marks' book The Most Important Thing here.

Kerrisdale Capital's Short Thesis on Dish Network: Calling Charlie's Bluff

Sahm Adrangi's hedge fund Kerrisdale Capital recently raised $100 million to short 1 stock.  That stock has been revealed as Dish Network (DISH).  They outlined their thesis in a presentation called "Calling Charlie's Bluff."

The title refers to DISH CEO Charlie Ergen, a noted poker player.  While most would think of Dish Network as simply that, a satellite television provider, Ergen has essentially bet the company on wireless spectrum by acquiring a ton of it with the view that there are multiple options to monetizing it.

Kerrisdale's argument is that the most likely buyers/partners for that spectrum (the major wireless carriers) don't really need as much of it these days and as such its value has decreased.  Combine this with DISH's core TV product that is in decline, and Kerrisdale thinks that DISH shares can trade between 58-80% lower.

Embedded below is Kerrisdale Capital's 31-page thesis on their short of Dish Network:

You can download a .pdf copy here.

Passport Capital Updates Hortonworks Stake

John Burbank's hedge fund firm Passport Capital has filed an amended 13G with the SEC regarding its stake in Hortonworks (HDP).  Per the filing, Passport now owns 12.7% of the company with over 7.18 million shares.

This is up from the 1.7 million HDP shares at the end of 2015.  The latest filing was due to activity on February 29th.

Per Google Finance, Hortonworks is "a provider and distributor of an enterprise-grade Hadoop solution called the Hortonworks Data Platform (HDP). The Company's platform integrates with data center technologies to enable data architectures and enables its customers to collect, store, process and analyze existing and new data types in a way that augments rather than replaces their existing data center infrastructure. It provides support subscription offerings and related professional services around the HDP, which is its open source software distribution of Apache Hadoop and associated projects. Its products include Hortonworks Data Platform and Hortonworks Sandbox. Its range of professional services are training and consulting. It caters to vertical markets, including online services, education, financial services, Government, healthcare/pharmaceuticals, industrials/manufacturing, media/entertainment, retail/ecommerce, technology and telecommunications.."

Wednesday, May 11, 2016

London Value Investor Conference Agenda - Limited Ticket Availability

With just over two weeks to go until the fifth London Value Investor Conference on 26th May the final programme including presentation titles have now been announced.

On the morning of the 26th, delegates will gather in the networking area for breakfast from 7.30am, with the conference opening remarks beginning at 8.30am.  Shortly afterwards Gary Channon of Phoenix Asset Management will give the first presentation - titled "Running Winners".

There will also be more than 10 investment ideas presented in detail at the conference this year, with some interesting topics presented and discussed, plus extensive audience Q&A sessions with both Howard Marks of Oaktree Capital and Jean-Marie Eveillard of First Eagle.

There are still a limited number of tickets available for the conference but you need to book now if you want to attend - until Tuesday 17th May (or until tickets sell out).  MarketFolly readers can get a discount of £120 (inc VAT) by using the code MARKETFOLLY-MAY when booking.

Here is the full agenda for 26th May:

Tuesday, May 10, 2016

William Thorndike's Talk at Google: The Outsiders

This week, we're posting up the various "Talks at Google" that focus on investing.  These typically feature authors of well known investment books.  Next up is William Thorndike who talks about his popular book, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success.

This book was recommended by Warren Buffett in his 2012 annual letter. The Outsiders basically looks at 8 CEO's that have excelled at capital allocation and shareholder value creation.

The book almost has a cult-like following in that investors have latched onto the fact that management is a critical part of any investment.  As such, investors are always trying to find the next 'Outsider.'  This book has also been referenced in numerous hedge fund letters over the years.

In his talk, Thorndike talked about certain CEOs who might potentially fit the mold in today's markets.

- Jeff Bezos (Amazon.com ~ AMZN): Though he admits to not studying the company too terribly in-depth, he believes Bezos is probably the best CEO example in tech given his 5-10 year focus on per share value.

- Nick Howley (TransDigm Group ~ TDG): Specialized aircraft components roll-up.

- Rales Brothers (Colfax ~ CFX): This is a re-up of the playbook they ran at Danaher, but with more cyclical businesses to start.

- Mark Leonard (Constellation Software ~ CSU.TO): Software

- Mike Pearson (Valeant Pharmaceuticals): He said it was still 'early days' in assessing this one, but obviously this one has kind of blown up.  It should be noted that Thorndike's talk was published on October 2015.

- ArchRe

- Mini Berkshire insurance companies: WhiteMountain, Allegheny, Fairfax, Markel

- NVR: Homebuilder

Embedded below is the video of William Thorndike's Talk at Google:

If you haven't already, be sure to pickup a copy of The Outsiders.

Pershing Square Offering Zoetis Block of Shares For Sale

Yesterday it was rumored that Bill Ackman's hedge fund Pershing Square Capital was shopping an over 16.8 million block of shares of Zoetis (ZTS) and the NYTimes basically confirmed it. 

Bank of America and Credit Suisse are running the transaction which would net Pershing around $800 million.  After the sale, Pershing will still own around 25 million shares of ZTS.

Pershing's board member also stepped down at Zoetis recently.

Ackman has suffered a big blow with his investment in Valeant Pharmaceuticals (VRX) which has left him reshuffling the rest of his portfolio a bit.  Part of his thesis on ZTS was that perhaps VRX might be interested in buying it.

This is the second stake that the hedge fund manager has trimmed recently.  He sold some Mondelez (MDLZ) back in March.

For more on this firm, we also posted up Pershing's latest presentation on their holdings.

ValueAct Capital Trims MSCI Stake Again

Jeff Ubben's investment firm ValueAct Capital has filed a Form 4 with the SEC regarding their stake in MSCI (MSCI).  Per the filing, they sold 91,800 shares at a price of $74.93 on May 5th.  After the sale, they still own over 3.67 million shares.

We posted about how ValueAct sold some MSCI back in March as well, as they previously owned over 6 million shares.

For more from this firm, check out Jeff Ubben's recent interview.

Per Google Finance, MSCI "together with its wholly owned subsidiaries, is a provider of investment decision support tools, including indexes, portfolio risk and performance analytics and multi-asset class market risk analytics products and services. The Company’s products include global equity indexes and environmental, social and governance (ESG) products marketed under the MSCI and MSCI ESG Research brands, its private real estate benchmarks marketed under the IPD brand, its portfolio risk and performance analytics covering global equity markets marketed under the Barra brand, its multi-asset class, market and credit risk analytics marketed under the RiskMetrics and Barra brands and its performance reporting products and services offered to the investment consultant community marketed under the InvestorForce brand." 

Monday, May 9, 2016

Stan Druckenmiller's Sohn Presentation & Transcript: The Endgame

The 2016 Sohn Conference New York just finished and we posted up notes here if you missed them.  Stan Druckenmiller of Duquese Family Office gave a presentation called "The Endgame" and the slideshow and transcript have been released.  They're embedded below:

Druckenmiller's Sohn Conference Presentation

You can download a .pdf copy here.

Druckenmiller's Sohn Conference Transcript

You can download a .pdf copy here.

And if you haven't already, be sure to check out our full notes from Sohn Conference New York featuring the likes of Larry Robbins, David Einhorn, Jim Chanos and more.

Sohn Contest Winner & Finalist Presentations: Short Dexcom, Long Amerco, Long Exor

The Sohn Investment Contest recently concluded and it was announced that the winner was Mark Grow, a Columbia Business School student who pitched a short of Dexcom (DXCM).  We posted up full notes from the Sohn Conference here.

Some of the finalist presentations have also been released, which include Alexandra Esparza, an MBA candidate at the Yale School of Management who pitched a long of Amerco (UHAL) and then Steven Wood of Greenwood Investors who pitched a long of Exor.  All of these presentations are embedded below:

Short Dexcom (DXCM) Sohn Pitch

You can download a .pdf copy here.

Long Amerco (UHAL) Sohn Pitch

You can download a .pdf copy here.

Long Exor Sohn Pitch

You can download a .pdf copy here.

Be sure to check out the rest of the investment ideas shared at the Sohn Conference in New York.

William Green's Talk at Google: Lessons From the Great Minds of Investing

This week, we're taking a look at some "Talks at Google" that focus on investing and feature authors of popular books on the subject.  Previously in one of our "What We're Reading" posts, we featured William Green's book, The Great Minds of Investing.

If you haven't already, we'd recommend checking it out.  Green has had the chance to interview many well known investors such as Seth Klarman, Howard Marks, Joel Greenblatt, Tom Russo, Mohnish Pabrai, and many more.

But also worth your time is this: the author recently had a talk at Google about Lessons From the Great Minds of Investing.  The video of his talk is embedded below:

And you can read William Green's book The Great Minds of Investing here.

Friday, May 6, 2016

Hedge Fund Links ~ 5/6/16

So you want to start a hedge fund: Lessons for managers and allocators [Seides]

The future of the hedge fund industry [A Wealth of Common Sense]

Is the hedge fund industry heading for a crossroads? [HFIntelligence]

Investors' changing approach to hedge funds [Bloomberg]

Hedge funds haven't delivered on their promise [Economist]

Excerpts from Tiger Global's letter [ValueWalk]

Hedge fund analyst checklist [MebFaber]

On due diligence on manager skill [Rzepczynski]

Advice from hedge fund manager Karim Moussalem [WiloWallStreet]

CalSTRS CIO: The 2 and 20 hedge fund model is dead [CNBC]

NY state pension leader calls hedge fund fees unfair [NYPost]

Kerrisdale raises $100m to short Dish Network [ValueWalk]

Hedge fund due diligence starts with Google [Lumentus]

Hedge fund investors have fallen in love with merger arb again [Bloomberg]

HF investor Aurora to return $5.4 billion to clients [Bloomberg]

How US Attorney Preet Bharara struck fear into Wall Street [New Yorker]

Tybourne Capital Ups Boston Beer Stake

Eashwar Krishnan's hedge fund firm Tybourne Capital has filed an amended 13G with the SEC regarding its position in Boston Beer (SAM).  Per the filing, Tybourne now owns 8.2% of the beer company popular for its Samuel Adams brand with 766,547 shares.

This is up from the 552,695 shares that Tybourne owned at the end of 2015.  Their recent filing was made due to activity on May 5th.  Boston Beer recently cut its 2016 earnings guidance, providing a drop for Tybourne to add to their position.

Prior to founding Tybourne, Krishnan worked at Steve Mandel's Lone Pine Capital.  You can see other recent portfolio activity from Tybourne here.

Per Google Finance, Boston Beer is "a craft brewer in the United States. The Company is engaged in the business of producing and selling alcohol beverages primarily in the domestic market and in international markets." 

7 Keys to the Perfect Pitch by James Rosebush

James Rosebush has used his experience in the Reagan Administration to develop what he feels are the 7 keys to the perfect pitch.  We thought this could be relevant for readers whether you are pitching an investment to others, pitching yourself to a potential employer, or pitching your fund to investors.

Rosebush's 7 Keys to the Perfect Pitch

His presentation focuses specifically on the mindset of pitching a fund to investors.  Here are his keys quickly summarized, with his full presentation video at the bottom:

1.  Start at the desired end - envision the final results

2.  Visualize when you talk - communication is mental transfer

3.  Associate your strategy with impact, with something bigger than just your own compact strategy -
activate something in the mind of the investor.  Where does your strategy mesh with the marketplace?

4.  Build a relationship bridge - research, get to know the investor, find out something about them that's impressive and tell them

5.  Be targeted, focused, exceptionally prepared and welcome tough questions

6.  Know what you believe and why you believe it

7.  Know yourself - ask if you have confidence in your strategy

Embedded below is the video of Rosebush's 7 keys to the perfect pitch:

Wednesday, May 4, 2016

Notes From Sohn Conference New York 2016: Druckenmiller, Robbins, Einhorn & More

The 2016 Sohn Conference New York just concluded and featured top hedge fund managers sharing investment ideas in order to benefit the Sohn Conference Foundation which is dedicated to the treatment and cure of pediatric cancer and childhood diseases.  Here's the takeaways:

Notes From Sohn Conference New York 2016

Larry Robbins (Glenview Capital): “Get a Grip.” Theme was stocks can be a bumpy ride for investors, and hedge funds have taken a lot of hits in the press, but if you expect them to not be short-term traders, then don’t judge them by their short-term records.   He talked his book; claiming that fundamental investing is not dead.   He is long: VCA (WOOF) – Veternarian hospital, multiple has compressed as earnings have grown and “There is no Obamacare for Veternarian hospitals.” Also pitched his longstanding holding of Thermo Fisher Scientific (TMO).  Yes, it has FX issues, but it has EPS growth.  Pitched Lab Corp (LH) as well: hit by fears of new technology, but Theranos story shows that it’s not that easy to come up with new technology. On CBS (CBS): the viewing model is changing, with over-the-top (OTT), but content still has value.   Flextronics (FLEX): they got out of the low value business, but still grew revenue 3% and EPS 15% yet their P/E is only 8.5x.  The stock fell in February 19% and nobody knows why. Abbvie (ABBV): has a pipeline, Humira has IP protection, and biosimilars will take time to develop. Brookdale Senior Living (BKD): earning less, but still, oversold. Talked about Anthem (ANTM): 1.     Managed care is still a good business  2.     Cigna (CI) merger could lead to 20% accretion  3.     ANTM vs ESRX contract repricing spat could lead to more earnings  4.     Market pricing says deal breaks, he doesn’t think it will.

Carson Block (Muddy Waters):  Famed short seller says, “No such thing as alchemy in banking” and touts Bank of the Ozarks (OZRK) as a short because they’ve done a lot of aggressive construction loans and acquisitions. Best case stock re-rates due to unsustainable EPS growth rate, worst case, balance sheet pressure.

John Khoury (Long Pond Capital):  Value oriented, private equity approach. Hyatt (H) long. Says 65% upside, and low leverage gives a floor to valuation.  Admits Pritzker family controls company but says they make good capital allocation decisions. Low end, leisure hotels most vulnerable to AirBnB threat.  Hyatt has more corporate, higher end, which is relatively insulated. Not making a bullish call on all hotel stocks.  Saying Hyatt since 2010 IPO, EBITDA is up 66%, shares up only 14% while they have bought back 20% of shares outstanding.    Uses SOTP to get $79 PT, 65% upside.

Chamath Palihapitiya (Social Capital):  Silicon Valley investor. Says Amazon (AMZN) is a multi-trillion monopoly in plain sight. Walked through e-Commerce, Amazon Web Services (AWS), says this is just the beginning, that Jeff Bezos will make good investment decisions. Says AWS is not understood by the Street and could be worth a lot more. (Seems like the AWS bull case is already widely touted by AMZN bulls?) Lots of potential losers as AWS scales.

Jeff Smith (Starboard Value): Activists. In 12 years they have replaced 162 board members at 50 companies. Likes Depomed (DEPO) long, pain medication, like Oxycontin, less abuse potential. Not taking price increases. Horizon Pharma (HZNP) tried to buy them, they refused to deal. Starboard has nominated a new board- sounds like a proxy battle is brewing.   Also like Westrock (WRK), merger of Mead WestVaco and Rock Tenn.  Sounds like a commodity business, but he says it is not, and it’s still cheap, at 4.9x 2017E EBITDA. Has $71 PT, almost a double from here.

Richard Deitz (VR Capital):  They do a lot of emerging markets stuff. He says long Greek banks and Greek treasury bonds.  Went through the sordid history of bailouts, and says now things are better, the banks are finally strong, may need one more round of recapitalizations.  141% upside, 34% IRR over next 3 years.

Stanley Druckenmiller (Duquesne Family Office): In a sentence: we have low rates, high multiples on stocks, high leverage, sell stocks and everything, buy gold.  Fed is out of control, encouraging borrowing, reckless behavior. China is out of control, just buy gold.

Jeff Gundlach (DoubleLine Capital): Comedy show, with art talk in the beginning.  In other words, his usual type of presentation. Says short XLU (utilities) long REM (mortgage REITs.)  REITS are priced at 0.88x p/book, with 11% dividend, Utilities are 1.9x p/book with 3% dividend, you earn 8% net and you can lever it up 100% and earn 15%, plus the two should converge. He mocked the “low volatility” equities and showed that even utilities have had 56% drawdowns in the past. His most incendiary statement was that Donald Trump would be President, and “he’s comfortable with debt.”

Zach Schreiber (PointState Capital): He is the man that pitched oil short 2 years ago, when it was $100 per barrel.   Long USD, short the Saudi currency, he says.  He made a compelling case for why Saudi is in an “unsustainable equilibria” with lavish unfunded entitlements, unsustainable debt, and not enough currency reserves to protect their peg. Other oil producers’ currencies are down 25- 45% vs the dollar- Mexico, Norway, Russia, for example, yet the Saudi currency is unchanged.  Only costs 1.5% to put this trade on and very asymmetric pay off.

Sohn Investment Contest Winner (Mark Grow, Columbia Business School):   DXCM, Dexcom short was the pitch. Insulin device maker (continuous glucose monitoring ~ CGM) which is facing impending competition and is unable to increase price as revenue per user declines. Says stock can drop in half.

Adam Fisher (Commonwealth Opportunity Capital):  Real estate background, now a Macro guy. Says short Japanese rates, long European rates. Very compelling case for how long JGBs that yield only 30 bps have nowhere to go but up. Even a move to 40 bps yield wipes out 10 years of return.  Says maximum return for bondholders is 9% return over 30 years - that is not a CAGR of 9%, that is a TOTAL of 9%!  Huge convexity in the trade.

David Einhorn (Greenlight Capital): He pitched Caterpillar (CAT) short, says company is NOT at trough earnings yet and the mining sector will never recover to the heights of the China boom.  No catalyst on the short, other than EPS growth expected to take longer than expected.  Then he pitched General Motors (GM) as a long, admitting that US business would drop off almost 20% but the currently money losing segments in Europe and Mexico could make up for the shortfall.  Long deck with lots of charts and cartoons as usual.  GM pitch rested on low P/E of 5.6x to increase despite US EBITDA to decline.

Jim Chanos (Kynikos Associates): Got a dig in on Tesla (TSLA), which he had said he was short earlier that day on TV.  He said Elon Musk had not enough production, not enough batteries, and now not enough executives, but he pulls production forward 2 years.  “What a showman,” he said. His pitch was a complicated one, talking about weakness in South Africa, and Nigeria, which led to a short of MTN group, a wireless carrier which is also struggling with subscriber growth and declining average revenue per user (ARPU).  At $20B EV, this is a big company that he says is not cheap.

What We're Reading ~ 5/4/16

Concentrated Investing: Strategies of the World's Greatest Value Investors [Benello] 

The internet economy [Chris Dixon]

Everything as a service [Stratechery]

A look at Cable One (CABO) [Value Seeker]

Rise of the robots is sparking an investment boom [FT]

Nielsen's blindspot and the fight for the future of TV ratings [The Wrap]

Company profile of TransDigm Group [Rational Walk]

Building failure into your process [A Wealth of Common Sense]

'Free' shipping crowds out small retailers [WSJ]

Africa's market of 1.2 billion people still holds huge promise [Economist]

Is Facebook approaching bubble territory? [Peridot Capitalist]

How grocery stores can survive Amazon [Bloomberg]

In China's Northeast, a daily jostle for jobs [NYTimes]

Baidu's moral dilemma [CNSpoon]

Google's yearly founders' letter [GoogleBlog]

Google has run away with the web search market and no one is chasing [Quartz]

Why are there so many mattress stores? [Marketplace]

The US homeownership rate falls again [WSJ]

How to be a better networker [Both Sides of the Ghost]

Jim Chanos Still Short Valeant, Alibaba, Tesla, SolarCity

At the Sohn Conference in New York today, Kynikos Associates' founder Jim Chanos appeared on CNBC to talk about what he's seeing in the markets lately (stay tuned for our full Sohn Conference notes later on).   Here are some takeaways:

- Still short Alibaba Group (BABA) with his bearish China bet

- Notes that some hedge funds charging 2/20 that generate 8% return will only give their investors a 4-5% return - is that worth paying for?

-  Still short Valeant (VRX) after originally shorting in 2014; thinks it's still not cheap and argues people are using valuation metrics that aren't right.  Doesn't think the company is trading at 3x earnings like Bill Ackman suggested recently.  Chanos: "Valeant was genius at gaming the system. That game is over."

- Cheniere Energy (LNG): Says he agrees that the contracts are money good, but the company's cost estimates are too low.  "You're paying a ridiculous price for 2020 cashflows compared to any other energy play you can buy today."  Asks how profitable can the plants operate and at what capital cost?

- Short Elon Musk: betting against Tesla (TSLA) and SolarCity (SCTY) still.  Sees flood of executives leaving TSLA as a negative sign.  Since the company can't really make money selling a $100,000 car, how are they going to do so selling a $35000 car (upcoming Model 3)?  Feels TSLA will need to raise money eventually.  Thinks SCTY gets in financial trouble in 2016.

We'll post video of his appearance if/when it becomes available.

Berkshire Hathaway Slightly Trims Verisign Position

Warren Buffett's Berkshire Hathaway has filed a Form 4 with the SEC regarding its position in Verisign (VRSN).

Per the filing, Berkshire slightly trimmed their stake in VRSN on April 29th.  They only sold 32,255 shares at weighted average prices ranging from $88.21 to $91.81.  After these sales, they still own a sizable 12.95 million shares.

This stock was largely thought to be one of Berkshire's younger portfolio managers' holdings (either Ted Weschler or Todd Combs).  These gentlemen now manage $9 billion each for Berkshire.

Per Google Finance, Verisign is "a provider of domain name registry services and Internet security, enabling Internet navigation for domain names and providing protection for Websites and enterprises around the world (Registry Services). The Company operates in Registry Services and Security Services segment. Its product suite also includes Security Services consisting of Distributed Denial of Service (DDoS) Protection Services, Verisign iDefense Security Intelligence Services (iDefense) and Managed Domain Name System (Managed DNS) Services. The Company's Registry Services provides the security and resiliency of Internet infrastructure and services, including the .com and .net domains, approximately two of the Internet's root servers, and operation of the root-zone maintainer functions for the core of the Internet's Domain Name System (DNS). The Company has operations inside, as well as outside the United States. Its operations infrastructure consists of approximately three secure data centers.."

Tuesday, May 3, 2016

Steve Cohen, Cliff Asness & Neil Chriss Talk Hedge Funds at Milken Institute

The Milken Institute just featured a conversation on the evolution of hedge funds and the future of asset management. The talk included Point72's Steve Cohen (formerly SAC Capital), Cliff Asness of AQR, and Neil Chriss of Hutchin Hill.

It's rare to hear directly from Cohen, so it's certainly worth watching the whole chat.  But here's some brief takeaways:

- Steve Cohen: says that there's so many players out there and they're all chasing the same names these days.  He was worried about levered/crowded names and becoming 'collateral damage' and you saw that play out earlier this year. "It's very hard to maximize returns and maximize assets too." He also noted that their data says their team are great stock pickers but not necessarily good at market timing.  In general, Cohen feels that talent is really thin.  He's "blown away" by the lack of true talent.  Later said around 80% of PMs come from inside their firm as they like to provide teaching tools.  "If you're not innovating, you're dying."  He says there's opportunities overseas but their offices there are always going to be smaller than the 'mothership' in the US.  They like to find people who have a strategy, stick to it, and do it over and over again (process).

- Cliff Asness: says that fees in the industry are just too high.  Gotta be more unique ways to structure fees, i.e. based on correlation of returns.  Barriers to entry for newer funds have gone up with increased regulatory environment (compliance, cost, etc).  Moderator says 67% of managers manage less than $250 million.  Asness notes hedge funds haven't performed well since the financial crisis and thinks they should be hedging more and be more uncorrelated to the indexes.  Also says the benchmark hedge funds compare to is simply wrong.  Noted that people overreacted to 3-5 year performance figures.

- Neil Chriss: argues that funds are too much like the indices but also too much like each other.  Says in order to scale in this business you need to be able to handle drawdowns and hire more people, expand into new investments, etc.  Made an interesting point that AUM from the 1990's until present has gone up something like 15-fold, but the talent level has not mirrored that expansion.  Thinks active managers will have more success when monetary policy stops influencing things so much.  On Hutchin Hill's multi-platform, they're looking for good decision makers, as that's ultimately what PMs are.  They want people with track records of good decision making.

Embedded below is the video of their Milken Institute talk:

Greenlight Capital Q1 Letter: New Positions in Yelp, PVH, Hatteras & American Capital Agency

David Einhorn's Greenlight Capital is out with its first quarter letter.  They returned 3% net in the first quarter after a very difficult 2016 which saw many of their top holdings implode.

During Q1, they started positions in American Capital Agency (AGNC), Hatteras Financial (HTS), PVH (PVH), and Yelp (YELP).  You can read their thesis on those names below.

Additionally, they're now dabbling in natural gas through calendar strips.

At the end of the first quarter, Einhorn's top holdings (alphabetically) were: Apple (AAPL), CONSOL Energy (CNX), General Motors (GM), gold, and Time Warner (TWX).  Their average exposure was 99% long and 79% short.

Embedded below is Greenlight's Q1 letter:

Graham & Doddsville New Issue: Interviews With MSD Capital, Meritage Group & More

The Spring 2016 issue of the Graham & Doddsville newsletter has been released by Columbia Business School.  In it, they have some great interviews with John Phelan of MSD Capital, Alex Magaro of Meritage Group, Adam Wyden of ADW Capital, and short-seller Marc Cohodes.

The issue also features the stock pitches from students from the 9th annual Pershing Square challenge.  Long Alimentation Couche-Tarde (TSE:ATD.B) won first place.  Next, second place went to a long pitch on Charles Schwab (SCHW).  Finalists also included a long pitch on Advance Auto Parts (AAP), a long of Alcoa (AA), and a long of Alliance Data Systems (ADS).

Embedded below is the latest Graham & Doddsville issue:

You can download a .pdf copy here.

SPO Advisory Reduces Resolute Energy Stake

John Scully's SPO Advisory has filed a 13G and a Form 4 with the SEC regarding their position in Resolute Energy (REN).  Per the filings, SPO now owns 6.3% of the company with 4.8 million shares.  They sold 10 million shares on April 28th at $0.51. 

Per Google Finance, Resolute Energy is "an independent oil and gas company. The Company is engaged in the exploitation, development, exploration for and acquisition of oil and gas properties. Its properties are Aneth Field located in the Paradox Basin in southeast Utah (the Aneth Field Properties or Aneth Field), and the Permian Basin in Texas and southeast New Mexico (the Permian Properties or Permian Basin Properties). It has an interest in gas gathering and compression facilities located within and adjacent to its Aneth Field Properties. Aneth Field is an oil field in southeast Utah, which produces approximately 6,290 equivalent barrels of oil per day. It owns working interests in the Aneth Unit, the McElmo Creek Unit and the Ratherford Unit. The Company has interests in approximately 27,750 gross (17,570 net) acres in the Permian Basin of Texas and southeast New Mexico. It covers over two project areas, including the Delaware Basin project area and the Northwest Shelf project area.."

Monday, May 2, 2016

Steadfast Capital Starts GrubHub Stake

Robert Pitts, Jr.'s hedge fund firm Steadfast Capital has filed a 13G with the SEC regarding shares of GrubHub (GRUB).  Per the filing, Steadfast now owns 5.1% of the company with over 4.31 million shares.

This is a newly disclosed equity position for the firm.  The filing was made due to activity on April 19th.  GRUB became publicly traded late last year.

About Steadfast Capital

This is the first time Steadfast Capital has been covered on the site.  The fund was founded by Robert Pitts, Jr. after working at Julian Robertson's Tiger Management.  As such, Steadfast is one of the many so-called 'Tiger Cub' funds.  Steadfast's most recent 13F filing reported assets of $5.2 billion, but keep in mind that doesn't include any of their international positions/exposure.

Per Google Finance, GrubHub "is an online and mobile platform for restaurant pick-up and delivery orders. The Company connects more than 30,000 local restaurants with diners in more than 800 cities across the United States. The Company’s target market is primarily composed of independent restaurants. The Company provides diners on the platform with a personalized platform that helps them search for local restaurants and then place an order from an Internet-connected device. It also provides diners with information about their orders and status. In addition, the Company enables re-ordering by storing previous orders, preferences and payment information. The Company’s products include GrubHub and seamless Websites, GrubHub and seamless mobile applications and mobile Website, seamless corporate program, allmenus and menupages, orderhub and boost, restaurant Websites and delivery."