Eminence Capital Increases Men's Wearhouse Stake

Ricky Sandler's hedge fund firm Eminence Capital has filed an amended 13D regarding their position in Men's Wearhouse (MW).  Per the filing, Eminence now owns 8.3% of the company with over 4 million shares.

This is up from the 3.19 million shares they owned at the end of the second quarter.  The new filing was made due to activity on September 9th.  They purchased the bulk of their recent shares at $52.43 and $51.10.

If you missed it, Ricky Sandler also recently appeared on Wall Street Week and talked about many of their other positions.

Per Google Finance, Men's Wearhouse is "a specialty retailer of men's suits and a provider of tuxedo rental product in the United States and Canada. It operates in two segments: retail, which offers its products and services through its four retail merchandising brands and Internet Websites. The Company's corporate apparel segment provides corporate clothing uniforms and work wear to workforces."

Eminence Capital Reduces Men's Wearhouse Stake

Ricky Sandler's hedge fund firm Eminence Capital has filed a 13D with the SEC regarding its position in Men's Wearhouse (MW).  Per the filing, Eminence now owns 6.6% of the company with over 3.2 million shares.

This is a decrease from the end of the first quarter when they owned over 4.2 million MW shares.  The filing notes they sold the bulk of shares on June 5th at $57.97.

Eminence also recently disclosed a Yelp position.

Per Google Finance, Men's Wearhouse is "a specialty retailer of men's suits and a provider of tuxedo rental product in the United States and Canada. It operates in two segments: retail, which offers its products and services through its four retail merchandising brands and Internet Websites. The Company's corporate apparel segment provides corporate clothing uniforms and work wear to workforces."

Eminence Capital Adds To Xoom, Men's Wearhouse Stakes

Ricky Sandler's hedge fund firm Eminence Capital has filed a 13G and a 13D with the SEC regarding two of their positions.


Adds To Xoom Stake

First, Eminence has revealed a 6.4% ownership stake in Xoom (XOOM) with over 2.44 million shares. 

This means they've boosted their stake by over 1.57 million shares since the end of the second quarter.  The filing was required due to activity on December 9th.

Per Google Finance, Xoom is "engaged in online international money transfer service. Its customers use Xoom to send money to family and friends in 30 countries. The Company generates revenue from transaction fees charged to customers and from foreign exchange spreads on transactions where the payout currency is other than United States dollars."


Increases Men's Wearhouse Position

Second, Sandler's hedge fund also disclosed a 11.9% ownership stake in Men's Wearhouse (MW) with over 5.7 million shares in an amended 13D filing with the SEC.

Their position size is now larger to the tune of 1.15 million more shares.  The filing was required due to activity on December 16th.

The filing also notes that Eminence's standstill clause (which capped their ownership at 10%) has been amended to 12%.

Per Google Finance, Men's Wearhouse is "a specialty retailer of men's suits and a provider of tuxedo rental product in the United States and Canada. It operates in two segments: retail and corporate apparel."

For more from this manager, you can see what stocks Sandler recommended at the Robin Hood Investors Conference.

Frank Brosens Long Men's Wearhouse: Capitalize For Kids Sohn Canada

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Frank Brosens of Taconic Capital who pitched a long of Men's Wearhouse (MW).


Frank Brosens' Sohn Canada Presentation

Runs a multi-strategy firm, with a focus on event driven ideas.

Pitched LONG The Men’s Wearhouse. Mentioned short term oriented traders flooded the stock during the merger battle with Jos. A. Bank Clothiers and has caused significant opportunities. The stock has sold off hard over last 2 weeks and they think it looks interesting again. The company can earn $5.50/share two years out with some catalysts to mention.

New CEO was appointed in 2011, but has just recently started implementing new plans and changes since chairman retired last year. Estimates the synergies of $100m by 2017. Men’s Wearhouse merger has a few unique opportunities; such as tuxedos, slimfit. Mentioned MW does $400M in tux rentals and Jos. A. Bank Clothiers only does $30M in tuxedo rentals.

Incremental margins are very strong, approximately 0.55 EPS accretion for every $50m incremental revenue gain for JOSB in tuxedos. Both JOSB and MW are well below peak margins due to heavy advertising spend. If MW can de-lever to ~2.5x Net Debt/EBITDA. They estimate MW can de-lever to 2.5x by 2018 and adjusting for 1x integration costs, FCF should exceed net income. Base case price target of $63 (~40% upside); upside and downside of +71% and -3%.

Be sure to check out the rest of the presentations from Capitalize For Kids Sohn Canada here.

Jamie Dinan's Rules of Investing & Current Market Thoughts (York Capital)

Jamie Dinan of hedge fund York Capital made a rare appearance on CNBC today and talked about his current market outlook, his rules of investing, and some of his stock picks these days.


Current market thoughts:  Instead of likening last year's positive market return to that of a beta move, he called it "an engagement move," as both investors and companies re-engaged.  Dinan says it's definitely a stock picker's market right now as corporate activity has picked up.


Latest exposures:  While his largest exposure is the US, he says York is increasingly moving to Europe for opportunities.  "We think European equities are apples to apples less expensive than their North American counterparts."  He also thinks the dealflow in Europe is about 6-12 months behind the US and he anticipates it picking up.


Dinan's rules of investing: He says the best thing to do in investing is learn from your mistakes.  His rules are:  focus on liquidity (so you can get out if you're wrong), be diversified, always be diversified (you never know where the dangers are gonna hit).

He says managing position sizes is also key (they run 50-60 positions at 1-4% position sizes).  Dinan argues to size positions not by how much you can make, but by how much you can lose.  The last important thing is leverage (or lack thereof).   He also noted that, "I find the trick in investing is to try not to give too much back" (after you're up a good amount).


York's stock picks:  They continue to like American Airlines (AAL) as the merger has completed and the industry is starting to act a lot more rational and margins are improving.  He thinks AAL can earn $6+ next year and applies a 10x multiple to that number.  And when looking at stocks they own that are up a lot, they ask themselves: "If we didn't own it, would we buy it today?"  He says AAL falls in this category and they'd still buy it.  As noted in our newly released Hedge Fund Wisdom issue, AAL was a consensus buy among the hedge funds tracked in Q4.

York also likes a potential consolidation play between Men's Wearhouse (MW) and Jos A. Bank (JOSB) as he highlights the potential cost savings that could come from a merger here.  He feels you can double the profitability if the companies combine. 

Dinan also touched on his stake in Hertz (HTZ) as he likes how the industry has consolidated and the fleet has rationalized.  He also highlights their equipment rental business that they think could be spun-off and the company could take advantage of its balance sheet and buyback stock.

Embedded below are the videos of Dinan's interview:

Video 1

Video 2

Video 3

Video 4


For more on York Capital's leading man, check out Dinan's other recent interview.

Eminence Capital Goes Activist on Mens Wearhouse, Now Largest Shareholder

Ricky Sandler's hedge fund firm Eminence Capital recently filed an activist 13D with the SEC regarding shares of Men's Wearhouse (MW).  Per the filing, Eminence has disclosed a 9.8% ownership stake in the company with 4,684,200 shares, making them the largest shareholder.

The filing shows Eminence was buying MW shares in early October around $34 and then later in the month between $42 and $44.

Men's Wearhouse has recently been approached by fellow retailer Jos A. Bank (JOSB) about buying the company.  MW rebuffed the offer and now Sandler has sent a letter to MW's board asking them to reconsider.

While Sandler agrees that JOSB's $48 offer for MW undervalues the company, he argues that there are large synergies to be had in a merger.

In his letter, Sandler asks for the company to, "1) instruct your financial advisors to evaluate MW's strategic alternatives, including soliciting competing proposals to acquire MW and analyzing a leveraged recapitalization of MW in the public marketplace, and 2) enter into a dialogue with JOSB regarding a possible combination.  We intend to exercise our rights as shareholders to hold you accountable if you fail to take these actions by close of business on November 11th."

For more on this hedge fund, we've covered Eminence Capital's portfolio activity here.