Friday, February 17, 2017

Hedge Fund Links ~ 2/17/17

Black Edge: new book about billionaire trader Steve Cohen [Sheelah Kolhatkar]

Excerpts from Elliott Management's letter [Business Insider]

Trump's 'stew of uncertainties' puts hedge fund managers on alert [WSJ]

Tiger hedge funds become Wall Street prey [WSJ]

TCI's Chris Hohn launches bid to block aerospace deal [Cityam]

Meet Paul Hilal, the activist investor taking on CSX [WSJ]

A look at Folger Hill's year-end letter [Business Insider]

How to invest like Loeb, Einhorn, Ackman at a discount [Barrons]

Chelsea Clinton's husband closes hedge fund [Bloomberg]

Former MSD Capital analyst convicted of insider trading [FINalternatives]

An older story about George Soros' portfolio after Trump's election [WSJ]

ValueAct Capital Starts Bioverativ Stake

Jeff Ubben's activist investment firm ValueAct Capital just filed a 13D with the SEC regarding shares of Bioverativ (BIVV).  Per the filing, ValueAct now owns 7.1% of the company with 7.7 million shares.

This is a newly disclosed stake for the firm and the filing was made due to recent activity.  BIVV just went public in January as a spin-off from Biogen (BIIB). ValueAct did not own any BIIB shares as of the end of 2016 per their latest 13F filing with the SEC.

The 13D filing notes Ubben's firm made equity forward purchases and were buying between mid-January and early February with the bulk of their purchases coming with a forward price of around $44.41.

The filing contains the standard boilerplate that they bought shares because they thought the security was undervalued.  They've had and anticipate having further discussions with directors of the company.

For more on this firm, we just highlighted other recent ValueAct portfolio transactions.

Per Google Finance, Bioverativ is "focused on the discovery, research, development and commercialization of therapies for the treatment of hemophilia and other blood disorders. It markets approximately two products, including ELOCTATE [Antihemophilic Factor (Recombinant), Fc Fusion Protein], and ALPROLIX [Coagulation Factor IX (Recombinant), Fc Fusion Protein], extended half-life clotting-factor therapies for the treatment of hemophilia A and hemophilia B, respectively. ELOCTATE and ALPROLIX use a process known as Fc fusion to link recombinant factor VIII and factor IX, respectively, to a protein fragment in the body known as Fc. The fusion of the factor with the Fc protein fragment uses a naturally occurring pathway and is designed to extend the half-life of the factor thereby making the product last longer in a person's blood than various factor therapies. Its pipeline includes BIVV 001(rFVIIIFc-VWF-XTEN) and BIVV 002 (rFIXFc-XTEN)."

Thursday, February 16, 2017

Charlie Munger's Talk at Daily Journal Annual Meeting 2017

Charlie Munger just held the annual meeting at the Daily Journal and shared his thoughts on a wide range of topics.  It's a rare chance to hear from one of the investment world's great minds.

Here's a few quick takeaways and quotes followed by the full video below:

- He owns a chunk of Berkshire Hathaway (BRK.A/B) stock, a chunk of Costco (COST) stock, and then has money allocated to Li Lu's fund.  He feels diversification is basically for the 'know nothing' investor.

- On why Berkshire bought airline stocks and Apple: "I don't think we've gone crazy.  I think the answer is we're adapting to a business that's gotten much more difficult." Consolidation in airlines has finally happened similar to what happened in railroads

- Munger recommended the book A Man For All Markets about Ed Thorp.  For other books he likes, be sure to check out out Charlie Munger's recommended reading list.

- "The success of Berkshire came from making two decisions a year over 50 years." 

- "You don't want to believe in luck, you want to believe in odds."

 - Regarding American Express (AXP): "If you think you know what's going to happen to payment systems 10 years out, you're probably under some state of delusion."

- On Wells Fargo (WFC): "(It) had a glitch... I don't think anything is fundamentally wrong."

- They bought Exxon Mobil (XOM) as basically a cash substitute 

 - Lots of opportunity still in China; strong and selling at cheap prices.  Problem is they gamble a lot and believe in luck, but they're formidable workers.

- On India: "India is grossly defective because they took the worst aspects of our culture, allowing a bunch of idiots to scream and stop everything.  They've taken the worst aspects of democracy."  Says the country is still battling corruption.

- "One thing about doing something dumb is that you're unlikely to do it again."

Embedded below is the video of Charlie Munger's talk at the Daily Journal annual meeting 2017:

For more on him, check out the book Charlie Munger: The Complete Investor as well as notes from the previous Charlie Munger Daily Journal meetings.

What We're Reading ~ 2/16/17

Ed Thorp's new book: A Man for All Markets [Ed Thorp]

Seth Klarman weighs in on Trump [NYTimes]

Homeownership rate in 2016 was lowest in 50 years [Corelogic]

US household debts climbed in 2016 by most in a decade [WSJ]

Income share for the bottom 50% of Americans is collapsing [Marketwatch]

On the downfall of Toshiba, a nuclear industry titan [FT]

This free range short seller is making his comeback [Bloomberg]

Does Chipotle's valuation offer a margin of safety? [Rational Walk]

A whirlwind tour through trends in China [Andreessen Horowitz]

Beware Sears's zombie apocalypse [Bloomberg]

Inside Sears' death spiral [Business Insider]

Jeff Bezos wants Amazon to be the next HBO, Showtime [NYPost]

Tim Cook says augmented reality is a big idea like the smartphone [The Verge]

Bill Gates 2017 annual letter [GatesNotes]

Wednesday, February 15, 2017

1-Week Free Trial to Scuttleblurb: Investment Analysis and Commentary is giving our readers a free 1-week trial.  With earnings season in full swing, it's the ideal time to check it out.

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As a subscriber, you'll get access to their growing library of content and weekly email updates on 100+ blurbs per year (several hundred pages of analysis and summaries).

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Recent posts include:

[OAK] Valuation Attractive on Normalized Fee-Related Earnings

[DLTR, DG] Dollar Store Deep Dive

[CHUBA/K] A Skeptical Take


Monday, February 13, 2017

New Graham & Doddsville Issue: Kingstown Capital Interview

Columbia Business School has released the Winter 2017 edition of its Graham & Doddsville newsletter.  In it, they feature a great interview with Guy Shanon and Michael Blitzer of Kingstown Capital.

They talk about their investment process and also outline their thesis for their largest position, Adient (ADNT), a spin-off from Johnson Controls (JCI).

The issue also features chats with Rupal Bhansali of Ariel Investments, Simeon Wallis of ValorBridge Partners, Jared Friedberg of Mercator, as well as Charles and Roy Studness of Studness Capital Management.

Lastly, this edition includes student investment pitches on short Foot Locker (FL), long Axalta Coating Systems (AXTA), and short Cardtronics (CATM).

Embedded below is Columbia Business School's latest Graham & Doddsville:

You can download a .pdf copy here.

You can also view past issues of this newsletter, including interviews with Meritage Group and MSD Capital.

Eminence Capital Starts Imperva Position

Ricky Sandler's hedge fund firm Eminence Capital has filed a 13G with the SEC regarding shares of Imperva (IMPV).  Per the filing, Eminence now owns 9.7% of the company with over 3.19 million shares.

This is a newly disclosed equity position for Eminence and the filing was made due to activity on January 31st, 2017.

Per Google Finance, Imperva "provides cyber-security solutions that protect business-critical data and applications whether in the cloud or on premises. The Company operates in the segment of development, marketing, sales, service and support of cyber-security solutions that protect business critical data and applications whether in the cloud or on premises. Its products include its Imperva SecureSphere platform for enterprise data centers, and Imperva Incapsula and Imperva Skyfence offerings for cloud-based security services. Its Imperva SecureSphere platform provides database, file and Web application security across various physical and virtual systems in data centers. Its Imperva Incapsula product line provides cloud-based Website security, denial of service protection and performance solutions. Its Imperva Skyfence product line provides visibility into, and control over, cloud and Software-as-a-Service (SaaS) applications, including shadow information technology (IT)."

Viking Global Discloses Myovant Sciences Position

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC regarding shares of Myovant Sciences (MYOV).  Per the filing, Viking now owns 61.8% of the company with over 37.23 million shares.

This is a newly disclosed public equity position for the firm and the filing was made due to activity on December 31st.  However, Viking previously invested in private company Roivant Sciences.  Roivant has stakes in numerous other biopharma companies that have been spun-out, including Myovant.

Myovant completed its initial public offering in the latter months of 2016.

Per Google Finance, Myovant Sciences is ".a clinical-stage biopharmaceutical company focused on developing and commercializing therapies for women’s health diseases and other endocrine-related disorders. Its main product candidate is Relugolix. Relugolix is an oral, once-daily, small molecule that acts as a gonadotropin-releasing hormone (GnRH) receptor antagonist that binds to and inhibits receptors in the anterior pituitary gland. Inhibition of GnRH receptors decreases the release of the gonadotropins, luteinizing hormone, or LH, and follicle-stimulating hormone, or FSH, thereby decreasing the down-stream production of estrogen and progesterone by the ovaries in women and testosterone by the testes in men. It is advancing relugolix for the treatment of heavy menstrual bleeding associated with uterine fibroids, endometriosis-associated pain and prostate cancer. It intends to develop its second product candidate, RVT-602, for the treatment of female infertility as part of assisted reproduction."