Viking Global Boosts Calpine Stake

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G regarding its position in Calpine (CPN). Per the filing, Viking now owns 5.7% of Calpine with over 20.5 million shares.

This marks an increase of over 10 million shares since the end of the first quarter when Viking owned 10.49 million shares.  The latest filing was made due to activity on June 23rd.

For more on this manager, be sure to check out Andreas Halvorsen on investment process.

Per Google Finance, Calpine is "a power generation company. The Company is engaged in the ownership and operation of primarily natural gas-fired and geothermal power plants in North America. The Company's segments include West (including geothermal), Texas and East (including Canada). In the Northeast and Mid-Atlantic regions, the Company has generating units capable of burning either natural gas or fuel oil. The Company operates its business through various divisions and subsidiaries. The Company's portfolio consists of various types of power generation technologies, including natural gas-fired combustion turbines, which include combined-cycle plants and renewable geothermal conventional steam turbines. Its Geysers Assets located in northern California represent the geothermal power generation portfolio in the United States, as well as the producing power generation asset of all renewable energy in the state of California."

Steve Tananbaum on Calpine Equity: Invest For Kids Chicago Presentation

We're posting up notes from the Invest For Kids Chicago conference 2015.  Next up is GoldenTree Asset Management's Steve Tananbaum who talked about Calpine equity.


Steve Tananbaum's Invest For Kids Chicago Presentation

•    $24B AUM – credit manager formed in 2000.
•    Credit market discussion – HY defaults increasing, many leading indicators.
•    High transaction multiples and leverage increasing – debt to ebitda around 5.2x. Increase in default rates, just about to begin over the next 12-24 months.
•    Would get 1000 bps, think were halfway there at 500 bps spread.
•    Is HY cheap now? Now its ok, closer to fair value.
•    2/3 bonds trading below par. 90% of loans trading below PAR
•    Now a bond/loan picker market.
•    June 14 – 90% of bonds above par
•    In bonds – 2/3 of what is trading below 95 isn’t energy. Loans its 80%.
•    Looking at triple C credits, many funds who owned them did great in FY09-13, and then 14/15 something went wrong. What occurred is the lowest part of the market had a significant reversal (i.e. CCC) underperforming by almost a 1000 bps. Expect it to continue.
•     Triple C headwind.
•    Oil futures $52 for dec 15, hy market/stock market pricing in a $65 price. Performance in energy/commodity function where oil is.
•    Problematic sector? Technology. Leverage is around 7x currently for Tech LBOs. What enters LBO tech market is slow to no growth tech companies (i.e. Compuware although no mentioned by name). Went from 4x to 8x. Technology is 8% of CCC issuance.
•    Illiquidity in HY market? More where it is in the 90s, 05 was an anomaly.
•    Finding some value in structured products. Greater issuance versus corp bonds a decade ago. 2x1 structure vs corporate. Now it is 20% of issuance. Less eyes on structured products.
•    Adjustable rate feature in structured rate products aren’t being priced in.


•    Idea is Calpine equity (CPN) –an independent power producer trading at low multiple, trough earnings and strong cash flow.
•    Half of cash flow is locked in for 3 years. Stable earnings outlook even in a low commodity price environment.
•    Young reliable efficient gas and geothermal fleet.
•    Texas – currently at trough earnings/depressed margin (25% of cash flow)
•    Buying back stock aggressively – 20% over last two years.
•    Significant NOL to shield free cash.
•    Will buy back another 15% of stock.
•    $22.3 by FY17 or a 20% FCF yield today.
•    Create gas assets at $477kw less than half of replacement costs.
•    Risk is increasing renewable supply such as wind/solar, potential new gas supply if prices recover and high leverage at 5.4x or 6.4x including major maintenance.
•    Bonds trade above par at spread basis, credit markets benign view.
•    FCF conversion currently 33%. 
•    Trades for ~8.25x EBITDA.
•    Price target includes 298 shares, $3.16 per share of FCF and implies a 12% fcf yield.
•    Down 32% YTD – market thinks price will be priced off $2 gas. Half of cash flows already locked in.


Check out the rest of the presentations from Invest For Kids Chicago 2015.

Falcone's Harbinger Dumps Calpine (CPN) Shares, Adds Options

In an amended 13D filed with the SEC, Philip Falcone's hedge fund Harbinger Capital Partners is now showing a 2.21% ownership stake in Calpine (CPN) with 10,000,000 shares. The filing was made due to activity on March 3rd, 2010 and the fine print reads, "This amount consists of Shares that the Reporting Person may be entitled to obtain upon the exercise of options." Digging into the filing further, we see that Harbinger has acquired options that are exercisable into shares within 60 days for their Master & Special Situations funds, as they bought $18,000 worth of options. This paints a vastly different picture from what we last saw when we looked at Harbinger's portfolio. After having a dismal 2008, Harbinger had a solid showing last year as they finished up 46.5% as we noted in our 2009 hedge fund performance numbers post.

These transactions comes after a wave of selling as Falcone's fund was disposing of CPN shares throughout January. We now also see that Harbinger's Master Fund sold 18,310,600 Calpine shares on March 3rd at a price of $10.75 per share. Their Special Situations Fund sold 9,155,300 shares at the same price on the same date. Then, interestingly enough, Harbinger purchased the above referenced options on the same day.

Here is a graphical breakdown of their recent transactions in Calpine:

(click to enlarge)

In conclusion, they dumped a bunch of shares and then picked up options. So, they're definitely up to something here and we'll continue to watch the developments. For more from Philip Falcone's hedge fund, check out our coverage of Harbinger's portfolio.

Taken from Google Finance, Calpine is "a wholesale power company in the United States. Calpine owns and operates natural gas-fired and geothermal power plants in North America and has a presence in power markets in the United States. Its portfolio consists of two types of power generation technologies: natural gas-fired combustion turbines, which are combined-cycle plants, and renewable geothermal conventional steam turbines."

Phil Falcone's Harbinger Capital Bets Big on Sprint Nextel (S): 13F Filing

(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)

Next up is Philip Falcone's hedge fund Harbinger Capital Partners. Falcone runs his $6 billion hedge fund with a focus both on distressed and equity plays and often takes concentrated positions in companies. And, that last reason is exactly why we track them. Even though we can't see their distressed plays (they aren't required to disclose them), we can track their equity plays that they have high conviction in. You aren't going to devote large portions of your portfolio to one company unless you truly believe in your thesis. After having a dismal 2008, Harbinger had a solid showing last year as they finished up 46.5% as we noted in our 2009 hedge fund performance numbers post.

The positions listed below were Harbinger's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.


Brand New Positions
Sprint (S)
Exco Resources (XCO)
Take Two Interactive (TTWO)
SPDR Gold Trust (GLD)
Corn Products (CPO)
US Airways (LCC)
Superior Well Services (SWSI)
Cloud Peak Energy (CLD)
Alpha Natural Resources (ANR)
iStar Financial (SFI)
Delta Petroleum Bond
The rest of the new stakes were each less than 0.25% of reported holdings: ICO Global (ICOG), MGIC Investment (MTG), & Strategic Hotels (BEE)


Increased Positions
Harry Winston Diamond (HWD): Increased by 587%
Walter Energy (WLT): Increased by 128.5%
Complete Production (CPX): Increased by 44.5%
Mercer International (MERC): Increased by 11.7% (we detailed their convertible bond exposure)


Reduced Positions
Interpublic Group (IPG): Reduced by 46.5%
Freeport McMoran (FCX): Reduced by 38.2%
Calpine (CPN): Reduced by 28.1%
Media Gen (MEG): Reduced by 18.1%


Removed Positions (Sold out completely):
McDermott (MDR)
Solutia (SOA) ~ we saw this coming with their previous repetitive sales
Zapata (ZAP)
Gentek (GETI)
USEC Bond International Coal (ICO)


Top 15 Holdings by percentage of assets reported on 13F filing

1. Calpine (CPN): 18.47%
   
2. Sprint Nextel (S): 15.35%
   
3. New York Times (NYT): 12.71%
   
4. Walter Energy (WLT): 10.42%
   
5. Complete Production Services (CPX): 5.31%
   
6. Interpublic Group (IPG): 4.81%
   
7. Exco Resources (XCO): 4.75%
   
8. Freeport McMoran (FCX): 3.82%
   
9. Take Two Interactive (TTWO): 3.26%
   
10. SPDR Gold Trust (GLD): 3%
    
11. Corn Products (CPO): 2.35%
    
12. US Airways (LCC): 2.17%
    
13. Terrestar (TSTR): 1.66%
    
14. Harry Winston Diamond (HWD): 1.57%
    
15. Superior Well Services (SWSI): 1.37%
    

Harbinger runs quite a concentrated equity portfolio and remember that a lot of their holdings are also in distressed assets, Falcone's specialty. They turned over their portfolio quite significantly in the fourth quarter as a large portion of their top holdings are brand new positions. Most notable will be their stake in Sprint (S) which takes up over 15% of their reported assets. But also take not of their Exco Resources stake (XCO). We did, on the other hand, already know about their new Superior Wells position. This just goes to show that you have to track all SEC filings, not just the 13F's, as hedge funds will often give you glimpses into their portfolio on a much more real-time basis.

Most people will take notice of Harbinger's new stake in the gold ETF: GLD. So many hedge funds have some exposure to gold these days it's not even funny. We found two of Harbinger's new stakes intriguing. Firstly, Falcone has joined Carl Icahn in buying TTWO shares. Additionally, like David Tepper's Appaloosa Management, Falcone bought shares of airline LCC.

We saw some notable sales as Harbinger sold completely out of Solutia, something we saw coming as we detailed their seemingly constant sales of SOA. We had also seen Falcone's previous sales in CPN as well, so that wasn't surprising to see. It was interesting to see the hedge fund shed a good portion of their FCX position as they hadn't held it very long. Overall, Harbinger increased exposure to basic materials and sharply decreased exposure to Utilities.

All data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with ease. Assets reported on the 13F filing were $1.78 billion this quarter compared to $1.48 billion last quarter, a 20% increase. Remember that these filings are not representative of the hedge fund's entire base of AUM.

We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, David Tepper's Appaloosa Management, Warren Buffett's portfolio, John Paulson's hedge fund Paulson & Co, Lee Ainslie's Maverick Capital, Dan Loeb's Third Point, Eddie Lampert's RBS Partners, David Ott's Viking Global, Chris Shumway's hedge fund Shumway Capital Partners, and Chase Coleman's Tiger Global. Check back daily for our new updates.

Philip Falcone's Harbinger Capital Continues Calpine (CPN) Sales

Philip Falcone's hedge fund firm Harbinger Capital Partners has been quite busy as of late. In particular, they've been unloading Calpine shares (CPN). This time is no different as they sold even more shares just a few days ago. Per an amended 13D filing with the SEC, Harbinger Capital Partners is now showing a 6.78% ownership stake in Calpine with 30,000,000 shares remaining. Breaking it down, we see that 20 million of those shares are held in their Master Fund and 10 million are held in their Special Situations Fund. Harbinger had a great showing last year as they finished 2009 up 46.5% as we saw in our 2009 hedge fund performance numbers post. So, all their portfolio shuffling apparently has been for good reason.

While we were aware of their previous sales, we now see that Falcone's hedge fund sold over 14 million shares on the 12th of January at a price of $11.75. Below is a sceenshot taken directly from their SEC filing that details their sales of CPN over the past few months:

(click to enlarge)

So, the theme of reducing their position size in this name continues. In terms of other portfolio movement, we also reported on Harbinger's three new positions so make sure you check those out as well. Harbinger is a multi-billion dollar hedge fund ran by Philip Falcone that primarily focuses on distressed plays and special situations.

For a complete timeline of Harbinger's moves with their Calpine stake, you'll see that they recently sold shares, having previously reduced their position in December. Prior to that, they were selling even more CPN shares and executed an offering back in September. Whew. We'll have to see if this trend continues, but our guess is that they're trying to reduce their position size to a smaller allocation in their overall portfolio.

Taken from Google Finance, Calpine is "an independent wholesale power generation company engaged in the ownership and operation of natural gas-fired and geothermal power plants in North America. The Company sells wholesale power, steam, capacity, renewable energy credits and ancillary services to its customers, including industrial companies, retail power providers, utilities, municipalities, independent electric system operators, marketers and others."

Hedge Fund Harbinger Dumps More Calpine (CPN)

Philip Falcone's hedge fund Harbinger Capital Partners has filed two form 4's and an amended 13D with the SEC recently to detail changes to their position in Calpine (CPN). Simply put, they've sold a lot of shares and below you'll find screenshots of the transactions taken directly from the SEC filings:

(click to enlarge)

Additionally:

(click to enlarge)

After all was said and done, it appears that Falcone's hedge fund still owns over 14 million shares of CPN. We also want to highlight the purpose of the transaction as identified on their amended 13D filing. According to the amendment, "On December 8, 2009 and December 9, 2009, Kelson Investments, S.ar.l., an indirect wholly owned subsidiary of the Master Fund and Special Fund ("Kelson Sarl"), sold 8.4 million and 882,248 shares, respectively. The proceeds of these sales will be used to pay off a loan made to Kelson Canada, Inc., an affiliate of Kelson Sarl and wholly owned subsidiary of the Master Fund and Special Fund. These shares were pledged as collateral for the Loan."

These sales come after Harbinger has recently sold Calpine shares (CPN), and executed an offering back in September. In terms of additional portfolio activity, Harbinger has been quite busy making SEC filings as of late and they recently adjusted two positions as well. Philip Falcone runs his $6 billion hedge fund with a focus both on distressed and equity plays and often takes concentrated positions in companies. For even more of their recent position adjustments, we previously penned a post detailing a portfolio update too.

Taken from Google Finance, Calpine is "an independent wholesale power generation company engaged in the ownership and operation of natural gas-fired and geothermal power plants in North America. The Company sells wholesale power, steam, capacity, renewable energy credits and ancillary services to its customers, including industrial companies, retail power providers, utilities, municipalities, independent electric system operators, marketers and others. The Company’s portfolio comprises two types of power generation technologies: natural gas-fired combustion turbines (primarily combined-cycle) and renewable geothermal conventional steam turbines."

Philip Falcone's Harbinger Capital Sells More Calpine (CPN)

Philip Falcone's hedge fund firm Harbinger Capital Partners has recently filed two separate Form 4's with the SEC on Calpine (CPN). In the filings, we see that Harbinger has sold a total of 647,221 shares. On December 7th, they sold 85,600 shares at a price of $11.03. On December 2nd, they sold 336,000 shares at a price of $11.24. The next day on December 3rd, they sold 65,269 shares at a price of $11.19. Lastly, on December 4th, they sold 160,352 shares at $11.02. After all was said and done, Harbinger still owns 39,135,915 shares of CPN direct and 17,856,266 shares on an indirect basis. This comes after Harbinger executed their Calpine offering back in late September. Overall though, their stake in CPN is way down over the past few months as they previously had owned almost 70 million shares.

This news comes after Harbinger recently adjusted two positions as well and Harbinger has been one of the busier hedge funds in terms of SEC filings this year. Philip Falcone runs his $6 billion hedge fund with a focus both on distressed and equity plays and often takes concentrated positions in companies. For more of their recent activity, we put up a post detailing a portfolio update too.

Taken from Google Finance, Calpine is "an independent wholesale power generation company engaged in the ownership and operation of natural gas-fired and geothermal power plants in North America. The Company sells wholesale power, steam, capacity, renewable energy credits and ancillary services to its customers, including industrial companies, retail power providers, utilities, municipalities, independent electric system operators, marketers and others. The Company’s portfolio comprises two types of power generation technologies: natural gas-fired combustion turbines (primarily combined-cycle) and renewable geothermal conventional steam turbines."