SRS Investment Management Reduces Avis Budget Stake

Karthik Sarma's hedge fund firm SRS Investment Management has filed an amended 13D with the SEC regarding its position in Avis Budget Group (CAR).  Per the filing, SRS now owns 9.5% of CAR with 9 million shares.

The filing indicates they sold 500,000 shares on May 5th at $25.40.  SRS previously owned 9.5 million shares at the end of the first quarter of 2016.

About SRS Investment Management  

Prior to founding SRS, Karthik Sarma worked at Tiger Global.  He started SRS in 2007 and has a large focus on international markets (particularly in India, China, etc) and typically invests in technology, media and other high-growth industries.  SRS's latest 13F filing indicates they manage in excess of $2.7 billion and that doesn't include their foreign positions.

About Avis Budget Group  

Per Google Finance, Avis Budget Group is "a provider of vehicle rental and car sharing services. The Company operates three brands, which include Avis, Budget and Zipcar. Avis is a rental car supplier and Budget is a rental vehicle supplier. It also owns Payless, which a car rental brand, and Apex, which is a car rental brand in New Zealand and Australia. It operates in two segments: Americas and International. The Americas segment provides and licenses the Company's brands to third parties for vehicle rentals and ancillary products and services in North America, South America, Central America and the Caribbean, and operates its car sharing business in certain of these markets. The International segment provides and licenses the Company's brands to third parties for vehicle rentals and ancillary products and services in Europe, the Middle East, Africa, Asia, South America, Central America, the Caribbean, Australia and New Zealand, and operates its car sharing business in certain of these markets.."

Marcato Capital Increases Avis Budget Stake

Mick McGuire's activist investment firm Marcato Capital Management has filed a 13G regarding shares of Avis Budget (CAR).  Per the filing, Marcato now owns 5.4% of the company with over 5.71 million shares.

This is up from the 3.34 million shares that Marcato owned at the end of the first quarter.  The filing was made due to activity on July 9th.  CAR traded at $65 to start the year, but has since slowly declined down to current levels of around $42 and Marcato has used the weakness to boost its exposure to the name.

The thesis here has largely been based on the industry consolidating down from a lot of companies into a few major ones, creating an oligopoly.  The thought is that they could act rationally together, raise prices, and profit.  Thus far, that road has been a little bumpier than expected for bulls.

While Marcato primarily takes activist stakes in companies, this looks to be a passive investment, at least for now.  Prior to founding Marcato, McGuire worked at Bill Ackman's Pershing Square.

We've highlighted previous Marcato portfolio activity here.

Per Google Finance, Avis Budget is "a provider of vehicle rental and car sharing services. The Company operates three brands, which include Avis, Budget and Zipcar. Avis is a rental car supplier and Budget is a rental vehicle supplier. The Company also own Payless, a car rental brand and Apex, which is a car rental brand in New Zealand and Australia. The Company operates in three segments: North America, International and Truck Rental. North America segment provides car rentals in the United States and vehicle rentals in Canada, as well as ancillary products and services. International segment provides and licenses the Company’s brands to third parties for vehicle rentals and ancillary products in Europe, the Middle East, Africa, Asia, South America, Central America, the Caribbean, Australia and New Zealand. Truck Rental segment provides truck rentals and ancillary products and services to consumers and commercial users in the United States.."

Viking Global Starts Avis Budget Group Position

Andreas Halvorsen's hedge fund firm Viking Global has started a new position in Avis Budget Group (CAR).  Per a 13G just filed with the SEC, Viking now owns 5% of the company with over 5.34 million shares.

They did not report owning a stake at the end of the third quarter.  The filing was made due to activity on December 17th.  This is now the second major hedge fund to file with the SEC regarding CAR shares.  We highlighted last week that Glenview Capital also was buying Avis Budget shares.

Per Google Finance, Avis Budget Group is "a provider of vehicle rental and car sharing services. The Company operates under brands Avis, Budget and Zipcar. The Company’s other brands include Budget Truck, Payless and Apex."

Glenview Capital Increases Avis Budget, Lithia Motors & PVH Corp Positions

Larry Robbins' hedge fund firm Glenview Capital has been active recently in shares of three of their holdings.


Increases Avis Budget Group Stake

Readers of the site won't be surprised by this move because we highlighted an interview with Robbins where he pointed out his fondness for car rental companies a few months ago.  Glenview has revealed they now own 5.2% of Avis Budget Group (CAR) with 5.44 million shares per a 13G filed with the SEC.

This means they've increased their stake by over 1.49 million shares since the end of the third quarter. The filing was required due to activity on December 10th.

Per Google Finance, Avis Budget Group is "a provider of vehicle rental and car sharing services. The Company operates under brands Avis, Budget and Zipcar. The Company’s other brands include Budget Truck, Payless and Apex. The Company operates in three segments: North America, which operates provides car rentals in the United States and vehicle rentals in Canada, as well as ancillary products and services, and operates the Company’s Zipcar car sharing business; International that provides and licenses its brands to third parties for vehicle rentals and ancillary products and services primarily in Europe, the Middle East, Africa, Asia, South America, Central America, the Caribbean, Australia and New Zealand; and Truck Rental, which provides truck rentals and ancillary products and in the United States."


Boosts Lithia Motors Position

Second, Glenview Capital has also revealed a 5.92% ownership stake in Lithia Motors (LAD) with over 1.4 million shares.  They've boosted their position size by 237,364 shares since the end of the third quarter.

Per Google Finance, Lithia Motors is "an operator of automotive franchises and a retailer of new and used vehicles and services. The Company sells new and used cars and light trucks and replacement parts; provides vehicle maintenance, warranty, paint and repair services; and arranges related financing, service contracts, protection products and credit insurance."


Adds To PVH Corp Holdings

Lastly, Larry Robbins' hedge fund firm also filed a 13G with the SEC regarding their PVH Corp (PVH) stake.  They now own 5.5% of the company with over 4.53 million shares.

This is an increase of 427,071 shares since the end of the third quarter and the filing was required due to activity on December 10th.

Per Google Finance, PVH is "an apparel company. The Company’s portfolio of brands includes Calvin Klein, Tommy Hilfiger brands, Van Heusen, IZOD, Bass, ARROW and Eagle, which are owned brands, and Geoffrey Beene, Kenneth Cole New York, Kenneth Cole Reaction, Sean John, JOE Joseph Abboud, MICHAEL Michael Kors, Michael Kors Collection, CHAPS, Donald J. Trump Signature Collection, DKNY, Elie Tahari, Nautica, Ted Baker, J. Garcia, Claiborne, Robert Graham, U.S. POLO ASSN., Axcess and Jones New York, which are licensed, as well as various other licensed and private label brands. It designs and markets branded dress shirts, neckwear, sportswear and, to a lesser extent, footwear and other related products. Additionally, it licenses its owned brands over a range of products."


This isn't the only activity out of Glenview recently either.  Robbins' firm also bought shares of two more companies.

Carl Icahn Raises Hertz Global Stake

Corporate activist Carl Icahn has filed an amended 13D with the SEC regarding his position in Hertz Global (HTZ).  Per the filing, Icahn now owns 10.77% of the company with over 49.2 million shares of HTZ.

This means he's recently purchased over 10.4 million shares and did the bulk of his buying on November 24th and 25th at around $24.xx per share.  Icahn's nominee for CEO, John Tague, was recently appointed to the position as Icahn looks to get the turnaround at the company started.

HTZ has been a popular stock among hedge funds.  Not to mention, another activist investor is involved too: JANA Partners.

Hertz is featured in the equity analysis section of the brand new issue of our Hedge Fund Wisdom newsletter that was just released.  For a limited time, we're having a 33% off sale and you can read the investment thesis on Hertz by signing up here.

Larry Robbins: Doesn't Believe This is a Change in Tone in the Market

Glenview Capital's Larry Robbins sat down for an interview with CNBC recently and here's what he had to say:

They're looking at what's happening to the economy and to liquidity.  They don't think there's a systemic issue out there.

He says, "Our own checks with companies indicate that the economy is doing reasonably well in the US, clearly some challenges overseas.  We don't believe that this a change in tone in the market that's likely to be here to stay.  We believe that this is a transitory risk problem."

Robbins also pointed to all the good news coming the US consumer's way recently: wages up, price of oil down.

Glenview took down exposure in the second week of September (net exposure) due to the laundry list of risk items.  They've started to re-risk about halfway to where they were before, as buying opportunities have presented themselves recently.   He argued that certain stock movements have outdone their fundamentals.

He specifically pointed out the rental car industry as being annihilated recently and called it a rational oligopoly as 3 players control 95% market share.  He said the Hertz (HTZ) CEO change has happened and likes Avis Budget's (CAR) opportunity ahead.  Robbins also said the travel industry has been impacted by the ebola scare, but didn't name any companies specifically.


Embedded below are the videos of Robbins' CNBC interview:

Video 1


Video 2


You can view some of Glenview's portfolio activity here.

Blue Ridge Capital Adds to Avis Budget Group Stake

John Griffin's hedge fund firm Blue Ridge Capital has filed a 13G with the SEC regarding shares of Avis Budget Group (CAR).  Per the filing, Blue Ridge now owns 6.17% of the company with 6,613,700 shares.

This marks a 56% increase in their position size since the end of the third quarter.  The filing was required due to activity on November 13th.

Last week, our premium Hedge Fund Wisdom newsletter drew attention to the fact that Blue Ridge had been increasing its stake in CAR in Q3, and now they've acquired even more shares in Q4.  Additionally, CAR was analyzed in the Q2 issue of our newsletter and new subscribers can access that as well.

Per Google Finance, Avis Budget Group "operates two brands in the global vehicle rental industry through Avis and Budget. Avis is a rental car supplier positioned to serve the commercial and leisure segments of the travel industry and Budget is a rental car supplier focused primarily on more value-conscious segments of the industry. It operates in three segments: North America, consisting of its Avis and Budget car rental operations in the United States and its Avis and Budget vehicle rental operations in Canada; International, consisting of its Avis and Budget vehicle rental operations in Europe, the Middle East, Asia, Africa, South America, central America, the Caribbean, Australia and New Zealand, and Truck Rental, consisting of its Budget truck rental operations in the United States."

Notes From Invest For Kids Conference: Ackman, Robbins, Whitney, Zell

The Invest For Kids Conference took place last week in Chicago and was a resounding success, raising over $1 million to benefit local children. We wanted to post up a quick summary of the event, including in-depth notes below from the prominent hedge fund managers that presented. Speakers included Bill Ackman (Pershing Square), Larry Robbins (Glenview Capital), Meredith Whitney, and more. Here are some of their latest investment recommendations:

Bill Ackman of Pershing Square Capital Management: Instead of doling out equity specific investment advice, Ackman instead turned to real estate. At the conference, he proclaimed his bullishness on the housing market and said to buy single family homes, citing home affordability at its highest level in many years. The low interest rate environment obviously helps this but he cautions rates won't stay low for long. This is the same recommendation as John Paulson who said to buy housing recently as well. Stay tuned next week as we'll examine Ackman's latest portfolio in our newsletter, Hedge Fund Wisdom. For our recent posts on the manager, head to Ackman's potential thesis on JC Penney (JCP).

Meredith Whitney of Whitney Advisory Group: Whitney harped on the issues found on the state and local government level regarding their fiscal problems. In short, she feels that municipalities are in trouble, especially New Jersey, Illinois, Massachusetts, and Michigan.

William Browder of Hermitage Capital: Browder focused on emerging markets and an inflationary environment. As such, he tossed out Koza Gold as an idea, a miner in Turkey. He cites their cheap valuation and cheap production costs at $320 an ounce. He also recommended Renhe Commercial Holdings, a shopping mall developer in China.

Larry Robbins of Glenview Capital: Robbins has been presenting the case for McKesson (MCK), Express Scripts (ESRX), and Life Technologies (LIFE) as of late. This conference was no different as he again pointed out the attractiveness of each investment. ESRX is well positioned for the generic drug boom in 2012 and Robbins likes their $6 billion in cash. He fancies LIFE due to its valuation and thinks the company should buyback shares. MCK is attractive due to the company's use of cash to accelerate EPS growth. He also cautioned about mortgage put-backs and appears to be short two banks with high exposure there. Head to our Hedge Fund Wisdom newsletter to view the rest of Glenview's portfolio. We also recently detailed how Glenview increased its position in Punch Taverns.

Joshua Friedman of Canyon Partners: Friedman's suggestion was to play the Lehman Brothers bankruptcy but cautions that it's a complex situation, to say the least. More detailed thoughts are found below.

John W. Rogers of Ariel Investments: Rogers offered three ideas: CBS (CBS), Viacom (VIA), and Gannett (GCI), the last of which he likes the best. He believes a natural move for CBS would be to go private later on as Sumner Redston ages. He also believes Redstone could push VIA private as well. Of the two, Rogers says VIA is cheaper and has solid upside. On GCI, Rogers argues that despite the unpopular print media business, he has been buying on the way down. In a sense, this is an economic recovery play as ad sales pick up.

Doug Silverman of Senator Investment Group: Possibly the most telling information from Silverman's presentation was the fact that they had previously focused on credit the past few years but are now focused on value equities. In terms of specific recommendations, Senator likes rental car companies at present. He referenced the bidding war for Dollar Thrifty (DTG) and sees consolidation in the space. Senator owns 6% of Avis Budget (CAR) and then a lot of Hertz (HTZ) shares as well. You can read his detailed thoughts below.


Numerous other speakers presented at the Invest For Kids Conference and we highly recommend reading the full set of notes attached. Embedded below are the notes, courtesy of Simoleon Sense:



You can download a .pdf copy here.

Overall the second annual conference was a resounding success, raising over $1 million to benefit local children. And, the various hedge fund managers that spoke presented some interesting investment ideas.