Scout Capital Increases COTY Holdings

Adam Weiss and James Crichton's hedge fund firm Scout Capital Management filed a 13G with the SEC regarding shares of COTY (COTY).  Per the filing, Scout has revealed a 4.3% ownership stake in COTY with 3,530,000 shares.

This marks an increase of 30,000 shares since the the end of the second quarter.  The new filing was required due to activity on October 28th.

Per Google Finance, COTY is "engaged in the manufacturing, marketing and distribution of women’s and men’s fragrances, color cosmetics and skin and body care related products globally. The Company operates in three segments: Fragrances, Color Cosmetics and Skin & Body Care. The Company’s power brands consists of adidas, Calvin Klein, Chloe, Davidoff, Marc Jacobs, OPI, philosophy, Playboy, Rimmel and Sally Hansen. The Company sells products in each of its segments through retailers, including hypermarkets, supermarkets, independent and chain drug stores and pharmacies, upscale perfumeries, upscale and mid-tier department stores, nail salons, specialty retailers, duty-free shops and traditional food, drug and mass retailers."

For more portfolio activity from Scout Capital head here.

Scout Capital Slightly Reduces DineEquity Stake

Adam Weiss and James Crichton's hedge fund firm Scout Capital have filed an amended 13D with the SEC regarding shares of DineEquity (DIN). Per the filing, Scout has reported a 5.4% ownership stake in DIN with 1,034,762 shares.

This marks a small reduction of 6.5% in the number of shares they own since the end of the first quarter.    This latest filing was required due to portfolio activity on July 30th, but they were selling shares throughout the month of July.  They sold at prices ranging from $65.6473 up to $71.9411.

Previously, we highlighted how Scout went activist on DineEquity back in May of this year.  Another activist hedge fund, Mick McGuire's Marcato Capital, had also been involved but sold around 38% of their position at the end of June.

Per Google Finance, DineEquity "owns franchise and operate two restaurant concepts: Applebee's Neighborhood Grill & Bar, (Applebee's), in the bar and grill segment of the casual dining category of the restaurant industry, and International House of Pancakes (IHOP), in the family dining category of the restaurant industry." 

We've also posted other portfolio activity from Scout Capital here.

Scout Capital's Letter to Tim Hortons' Board

Adam Weiss and James Crichton's hedge fund Scout Capital today filed an amended 13D with the SEC regarding Tim Hortons (THI).  Per the filing, their position size in THI remains unchanged (we originally flagged Scout's activist position in THI here).

Scout has sent a letter to the board of directors outlining their issues with the company and we've embedded it below:




For more on this hedge fund, check out some of Scout's other portfolio activity here.

Scout Capital Goes Activist on Tim Hortons, Boosts Position

Adam Weiss and James Crichton's hedge fund firm Scout Capital has filed a 13D with the SEC regarding shares of Tim Hortons (THI).  Per the filing, Scout has revealed a 5.5% ownership stake in with 8.4 million shares.

This marks a 271% increase in their position size since the end of the first quarter as they only owned 2.26 million shares then.  The 13D was filed due to portfolio activity on June 6th.

The fine print of the filing also outlines what Scout is trying to accomplish with their new activist position:

Scout has "engaged and expect to continue to engage in discussions with senior management of the Issuer with respect to the Issuer’s optimal capital structure, capital expenditures, timing and magnitude of share repurchases, management compensation metrics, and technology investments, among other matters."

Per Google Finance, Tim Hortons is "a quick service restaurant in North America. The Company’s menu includes premium coffee, espresso-based hot and cold specialty drinks, including lattes, cappuccinos and espresso shots, specialty teas, fruit smoothies, home-style soups, grilled Panini and classic sandwiches, wraps, hot breakfast sandwiches and fresh baked goods, including donuts."

For more on this hedge fund, we highlighted a new stock Scout has been buying recently.

Scout Capital Discloses CST Brands (CST) Stake

Adam Weiss and James Crichton's hedge fund firm Scout Capital filed a 13G with the SEC regarding shares of CST Brands (CST).  Per the filing, Scout has disclosed a 5.9% ownership stake in CST with 4,485,000 shares.

This is a brand new position for the hedge fund and Scout crossed the threshold requiring an SEC filing on May 15th. 

This month CST was spun-off from Valero (VLO).  Scout did not report ownership of VLO at the end of Q1, so it's hard to say if they bought VLO shares more recently and received shares via the spin, or if they simply built a position once CST started trading.

Shareholders of Valero on the books as of mid-April received 1 CST share for every 9 VLO shares owned.

Per Google Finance, CST Brands is "a retailer of transportation fuels and convenience goods in North America. As of April 30, 2013, the Company operated 1,032 Corner Stores throughout the United States, including Texas, Louisiana, Arkansas, Oklahoma, New Mexico, Colorado, Wyoming, Arizona and California. Its stores also provide prepared foods. The Company offers a range of products, such as snack foods, tobacco products, beverages and fresh foods, including its own brands: Fresh Choices sandwiches, salads and packaged goods; U Force energy drinks; Cibolo Mountain coffees (the United States); Transit Cafe coffee and bakery (Canada); FC bottled sodas, and Flavors 2 Go fountain sodas."

For more portfolio activity from this hedge fund, we recently posted about another stock Scout has been buying.

Scout Capital Discloses SeaWorld Entertainment Stake

Adam Weiss and James Crichton's hedge fund firm Scout Capital filed a 13G on shares of SeaWorld Entertainment (SEAS) and revealed a 7.8% ownership stake with 7,200,257 shares.

The 13G was required due to activity on April 18th.  SeaWorld recently completed its initial public offering and it's likely that Scout participated in the IPO.

Per Google Finance, SeaWorld Entertainment is "a theme park and entertainment company. The Company is engaged in delivering personal, interactive and educational experiences that blend imagination with nature and enable its customers to celebrate, connect with and care for the natural world. The Company own or license a portfolio of globally recognized brands including SeaWorld, Shamu and Busch Gardens. The Company has built a diversified portfolio of 11 destination and regional theme parks that are grouped in key markets across the United States. Its theme parks feature a diverse array of rides, shows and other attractions with broad demographic appeal which deliver memorable experiences and a strong value proposition for its guests."

This hedge fund has been active recently and we also highlighted Scout's other new position.

Scout Capital on Anheuser-Busch InBev (BUD): Q2 Letter Excerpt

Adam Weiss and James Crichton co-founded Scout Capital in 1999 and now manage around $4 billion.  In their second quarter letter to investors, they touched on their new stake in Anheuser-Busch InBev (BUD) that they initiated in the first quarter.

They purchased shares thinking that domestic (US) beer demand was coming back and that the company would turn from paying down debt to share repurchases or dividends.  Scout also felt BUD was cheap at a 7.5% free cash flow yield which was trading at a discount to other consumer franchises.

Their thesis centered on the discount stemming from two disconnects: 1. fundamentals of the industry and 2. capital allocation.

1. On fundamentals, they felt that the Street was "confusing cyclical effects for secular ones" as many investors had modeled the negative trend of beer volume into the future.  Scout went the other way and assumed better employment would help US volumes.

2. On capital allocation, Scout's analysis pointed to Anheuser-Busch InBev being likely to allocate cashflow in a different direction than simply paying low coupon debt in order to keep its investment grade rating.  The hedge fund thought BUD could buyback 7-9% of its shares per year, something that wasn't being priced in.

However, Scout also noted that the company's management is very smart with allocating capital as BUD instead chose to purchase Mexican brewer Grupo Modelo for $20 billion just before the end of the second quarter.

Scout writes,

"Factoring in expected costs savings, we believe the acquisition adds 10%-15% to ABInBev’s 2013 EPS on a full-year, pro forma basis. This doesn’t account for the tremendous international growth opportunity for Modelo’s flagship Corona brand as part of ABInBev’s global distribution network, which we estimate could contribute an additional 2%-4% earnings accretion. While the stock rose 10% on the news of the Modelo deal, our earnings estimates increased even more, and we believe BUD valuation is still too cheap relative to the growth and quality. The current free cash flow yield of 7.5% continues to represent a 20% discount to global consumer staples stocks with similar growth."

As if Anheuser-Busch InBev wasn't already in a dominant position in the beer market, this acquisition further entrenched their status.

Weiss and Crichton then concluded that,

 "With the benefit of an improving U.S. beer market, upside to the cost and revenue synergies from the Modelo acquisition, and redeployment of excess cash flow toward buybacks, we believe ABInBev can compound free cash flow per share at around 15% for the next few years and generate total shareholder returns in the high teens, before any multiple improvement. On our 2014 free cash flow per share estimate of $6.50 and a peer-like cash flow yield of 6%, our two-year price target is $110 or 40% upside (including dividends) from the current level. BUD remains a core position."

Per their most recent 13F filed with the SEC, Scout disclosed over a $365 million position in BUD as of June 30th.  At that time, it was their largest disclosed US equity long.  This isn't the first time we've seen a hedgie's pitch on the brewer as Whitney Tilson's T2 Partners also made a presentation on BUD a few years ago.

For more hedge fund Q2 letters, this week we've also posted up:

- Eminence Capital bullish on Google

- Why Bill Ackman sold Citigroup

Scout Capital Builds Sally Beauty (SBH) Stake

James Crichton and Adam Weiss' hedge fund Scout Capital filed a 13G with the SEC in regards to their new position in Sally Beauty (SBH).

Scout originally started a brand new position in Sally Beauty in the fourth quarter. And according to their most recent SEC filing, they've continued to buy SBH shares in the new year. Scout now shows a 5.9% ownership stake in SBH with 10,986,862 shares.

At the end of 2011, they owned just over 7 million shares. Over the past two months, they've increased their position size by almost 56%. The SEC disclosure was triggered due to portfolio activity on February 7th.

For more from this hedge fund, we've previously posted Scout's presentation on Williams (WMB) & Sensata Technologies (ST).

About Scout Capital

Scout was founded and is co-managed by James Crichton and Adam Weiss. Before founding Scout, Crichton worked at Zweig-DiMenna and received his MBA from Harvard. Weiss, on the other hand, worked at Dan Loeb's Third Point and received his MBA from Columbia.

About Sally Beauty

Per Google Finance, Sally Beauty is "an international specialty retailer and distributor of professional beauty supplies with operations primarily in North America, South America and Europe. The Company operates primarily through two business units: Sally Beauty Supply and Beauty Systems Group (BSG). Through Sally Beauty Supply and BSG, the Company sells and distributes beauty products through 4,128 Company-owned stores, 181 franchised stores and 1,116 professional distributor sales consultants. Sally Beauty Supply stores target retail consumers and salon professionals, while BSG exclusively targets salons and salon professionals."

Hedge Fund Scout Capital Buys More Arcos Dorados (ARCO)

James Crichton and Adam Weiss' hedge fund Scout Capital just filed an amended 13G with the SEC regarding their position in Arcos Dorados (ARCO).

They've boosted their position size by almost 48% since the end of the second quarter. Scout now owns 10.78% of Arcos Dorados with 13,962,000 shares per portfolio activity on November 9th.

In other activity from the hedge fund, we detailed that they acquired total return swaps on Domino's Pizza.

Also, we've posted Scout's presentation on Williams (WMB) and Sensata Technologies (ST) from the Value Investing Congress.

Per Google Finance, Arcos Dorados is "is a McDonald’s franchisee. As of December 31, 2010, the Company operated or franchised 1,755 McDonald’s-branded restaurants, which represented 6.7% of McDonald’s total franchised restaurants globally. It operates McDonald’s-branded restaurants under two different operating formats, Company-operated restaurants and franchised restaurants."

Hedge Fund Scout Capital Acquires Total Return Swaps on Domino's Pizza

James Crichton and Adam Weiss' hedge fund Scout Capital just filed a Form 3 and Form 4 with the SEC regarding their position in Domino's Pizza (DPZ).

On October 18th, Scout acquired various total return swaps with expiration dates of September 6th, 2012 and November 16th, 2012. The conversion/exercise price of these derivatives range from $23.38 to $28.94 and in all these swaps seem to represent over 750,000 shares. DPZ currently trades around $31.40.

The footnotes of the filings also indicate that Scout has now become a 10% owner of Domino's Pizza (DPZ) as a result of the company's buyback program.

For more from this hedge fund, head to Scout's presentation on Williams (WMB) and Sensata Technologies (ST) from the Value Investing Congress.

Per Google Finance, Domino's Pizza is "is a pizza delivery company in the United States. The Company operates its business in three segments: domestic stores, domestic supply chain and international. Its brands include the Domino’s Pizza, Domino’s HeatWave hot bag, Domino’s American Legends pizzas and Domino’s BreadBowl Pasta and Cinna Stix. Domino’s earns its revenue by retail sales at its franchise stores, which generate royalty payments and supply chain revenues to the Company. DPI’s also generates earnings through retail sales at its Company-owned stores."

Scout Capital: Long Williams (WMB) & Sensata Technologies (ST) ~ Value Investing Congress Presentation

At day two of the Value Investing Congress, Adam Weiss & James Crichton of hedge fund Scout Capital gave the case for a long of Williams (WMB) and Sensata Technologies (ST) in a presentation entitled "Two Investment Opportunities."

Be sure to check out all our notes from the Value Investing Congress.


Scout Capital

Adam Weiss: long Williams Co (WMB)

Three parts: pipelines, midstream producer of LNG, E&P. Feb new CEO breaking up the company. Stock $24, Base case $37, based on infrastructure business being revalued on break up, reserves is $9 per share for E&P, “hidden asset” worth $3/share. Upside case is total $47-50.

*Note: In the past we saw large hedge fund buying in WMB and analyzed it in a past issue of our Hedge Fund Wisdom newsletter.

Business quality: “good, not great”

Business model: inevitable product/service, benefits of scale, favorable competitive environment as pipelines take time to build, WMB is low cost provider.

Sustainable growth: 7-10% EBITDA CAGR over 5 years. Well-located pipelines, in most cases, coal to gas switching is required by law and Transco (WMB) has the only pipelines there.

Management: New CEO, break-up of company within months of taking over, strong performance record in the past – he ran the WMB midstream business prior to this and it had the highest growth of any division.

Street misunderstanding: spin/break-up of a conglomerate- different types of investors in the stock- E&P and infrastructure are at odds with each other. Sell-side and buy-side coverage issues. New CEO, new culture. Hidden asset- the off-gas processor in the Canadian gas sands. By breaking up the company, shifts focus from EBITDA to multiples to dividend power, yield and NAV.

Valuation: Sum of the parts: Base case $37, bull case $47-50

1. Infrastructure assets. Dividend of $1.14-1.37, 1.2x coverage, gets $25 stock based on 4.5% yield, similar to KMI or OKE comps. Upside case 4% yield is $30.

2. E&P business: $9.00 floor share, based on NAV comps- CHK, et al. $1.24 per proven mcf, 25% below peers.

3. Hidden asset. Canadian Midstream business, oil sands gas processor. Based on 4.5x EBITDA get $3.00 base case, upside based on dividends, 0.40 div, 4.5-5.0% yield, get $6-8 per share in bull case.

4. Balance sheet value/ cap structure optimization. Either M&A or buyback, get $2-3 per share.


Risks: MLP valuation risk, NGL stability (20% of EBITDA from commodity-sensitive margins), regulatory changes - taxation of MLPs are a headline risk.

Path to realization? Spin of business Q1-2012 is catalyst. Dividend raise. Discovery of hidden asset by Street. Excess capital usage.



James Crichton: long Sensata Technologies (ST)

Airbags, jet circuit breakers, HVAC systems. High value add solutions. Low cost, high value nature of products, with high switching costs. The current issue of our Hedge Fund Wisdom newsletter also analyzes ST.

How Scout determines their Circle of Competence: Know the right people? Not quarter-to-quarter news flow, deep industry knowledge. Product? Do we understand the drivers of demand? Mental models: are there any useful predictable models in place? His example, Sensata engineers work at customers’ facilities, so familiarity makes it easy for customers to buy from them. Impact of un-analyzables. Identify risks and things that you can’t know for sure.

Business Quality. Powerful moat, inevitable product- make machines safer and more efficient. High value, low cost value proposition- typical sensor costs $10, in a multi-thousand dollar engine. High switching costs once designed into products. In flat GDP, grows revenue from 4% to as high as 20% in a better economy. FCF grows 12-30%.

Management: grew revenue 6.5% CAGR despite auto industry contraction. Management owns 2.2%, $100M of stock, CEO owns $45M.

Misunderstanding by Street: levered equity stub in a relatively new public company without peers. Change of incentives makes levered equity stubs work. (This was a Bain LBO from TXN in 2006, and then IPO’d). Management is paid more by stock than cash. Scout is higher than Street on estimates. “Sponsor” still owns 51% of stock, is selling, and may become more liquid. (Can be some overhang in these situations though).

Risks: need auto sales to hold up, improve for stock to work. Scout is modeling no growth, but also no further drop. Also, bull case relies on further accretive acquisitions. Valuation multiple may not expand.


Q&A Session: Did KMI/EP deal change their numbers for WMB? Gets you 11-12x EBITDA for pipeline asset, does indeed add to bull case price target.


For more from this hedge fund, head to some of Scout's other new positions.

Don't miss the rest of the hedge fund manager presentations in our notes from the Value Investing Congress.

Scout Capital Starts Sodastream (SODA) & Fresh Market (TFM) Positions

James Crichton and Adam Weiss' hedge fund Scout Capital just filed two 13G's with the SEC regarding Sodastream International (SODA) and The Fresh Market (TFM). Both are brand new positions for the hedge fund.

Scout Capital manages over $4 billion. Weiss and Crichton will be presenting investment ideas this October at the Value Investing Congress in New York. Market Folly readers can receive a 42% discount to the event here.

Sodastream International (SODA)

Due to portfolio activity on July 11th, Scout has revealed a 5.07% ownership stake in SODA with 1,010,000 shares. Since this position didn't appear on their first quarter disclosure, they've acquired their entire position sometime over the last three and a half months (with buying activity as recent as last week).

Per Google Finance, Sodastream "is engaged in developing, manufacturing and marketing home beverage carbonation systems and related products. The Company develops manufactures and sells soda makers and exchangeable carbon-dioxide (CO2) cylinders, as well as consumables, consisting of CO2 refills, reusable carbonation bottles and flavors to add to the carbonated water."

The Fresh Market Inc (TFM)

The hedge fund also disclosed a 5.21% ownership stake in Fresh Market (TFM) with 2,500,000 shares (a brand new stake as well). To see what else they've been up to, head to some of Scout's recent portfolio activity.

Per Google Finance, Fresh Market is "a specialty retailer focused on perishable product categories, which include meat, seafood, produce, deli, bakery, floral, sushi and prepared foods. Its non-perishable product categories consist of traditional grocery and dairy products, as well as specialty foods, including bulk, coffee and candy, and beer and wine."

To hear these hedge fund managers' latest stock picks, be sure to head to the Value Investing Congress and take advantage of our discount before it expires next week.

Scout Capital's Adam Weiss & James Crichton Presenting at Value Investing Congress

It's just been announced that the founders of hedge fund Scout Capital will be speaking at the Value Investing Congress in New York City on October 17th & 18th. We've featured Weiss and Crichton's fund on the site numerous times before as they manage over $4 billion.


42% Discount to the Event: Market Folly readers receive a 42% discount by clicking here and using code: N11MF4. Take advantage of this ASAP because it expires July 29th!

Other Speakers:

- Bill Ackman (Pershing Square)
- Leon Cooperman (Omega Advisors)
- Jim Chanos (Kynikos Associates)
- Joel Greenblatt (Gotham Capital)
- Alexander Roepers (Atlantic Investment Mgmt)
- Guy Gottfried (Rational Investment Group)
- Michael Kao (Akanthos Capital)
- Whitney Tilson & Glenn Tongue (T2 Partners)

As you can see, the Value Investing Congress is loaded with prominent hedge fund managers. Get a peak inside their portfolios by hearing their latest investment ideas in New York this coming October.

The big discount for our readers expires in one week, so act now. Click here to save 42% off admission.

Scout Capital Discloses Sensata Technologies (ST) Stake

James Crichton and Adam Weiss' hedge fund Scout Capital just filed a 13G with the SEC on shares of Sensata Technologies (ST). Based on portfolio activity on May 13th, 2011, Scout has disclosed a 5.02% ownership stake in ST with 8,750,000 shares.

At the end of the first quarter (March 31st), Crichton and Weiss' hedge fund owned 8,200,000 shares so this marks only a 6.7% increase in their position size.

However, Scout just revealed their position in Sensata equity as a new holding in the first quarter. As such, all of their buying in the name has been within the past five months. They also recently started an Arcos Dorados stake (ARCO).

Scout isn't the only hedge fund that has recently disclosed a position in Sensata equity. As noted in the brand new issue of our newsletter, John Griffin's Blue Ridge Capital started a new stake in the quarter and Alan Fournier's Pennant Capital was adding to its position as well.

Per Google Finance, Sensata Technologies is "The Company is engaged in the development, manufacture and sale of sensors and controls. It produces a range of sensors and controls for mission-critical applications, such as thermal circuit breakers in aircraft, pressure sensors in automotive systems, and bimetal current and temperature control devices in electric motors."

Scout Capital Starts Arcos Dorados Stake (ARCO)

James Cricthon and Adam Weiss' hedge fund Scout Capital has started a position in Arcos Dorados Holdings, Inc (ARCO). Due to a 13G filed with the SEC, Scout has revealed a 5.2% ownership stake in the company with 6,733,263 shares.

The company recently priced its initial public offering (IPO) at $17 per share in the middle of April and it's very likely Scout participated in this. Shares now trade around $22.50.

The name of the company in Spanish literally translates into "gold arches." They purchased McDonalds' (MCD) operations in Latin America back in 2007. Scout's interest in the name shouldn't come as a surprise given that they've also held a very large position in McDonald's (MCD).

Scout manages over $4 billion. Before founding their hedge fund, Crichton worked at Zweig-DiMenna and received his MBA from Harvard while Weiss worked at Dan Loeb's Third Point and received his MBA from Columbia.

We've detailed some other recent portfolio activity from this hedge fund including an increase in their Domino's Pizza position (DPZ).

Per Yahoo Finance, Arcos Dorados "operates and franchises McDonald's restaurants. The company has operations in 19 territories, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, and more.".

Scout Capital Orders More Domino's Pizza (DPZ)

James Crichton and Adam Weiss' hedge fund Scout Capital Management recently updated its position in Domino's Pizza (DPZ). Per portfolio activity on February 23rd, Scout has now revealed a 5.07% ownership stake in DPZ with 3,040,000 shares.

This recent SEC 13G filing marks almost a 21% increase in their position size since the end of last year. At 2010 year-end, Scout previously owned 2,519,600 DPZ shares.

For other activity from the hedge fund, we've detailed some of Scout's other positions here. Signs of a 'fast food' theme are evident in Scout's portfolio as they also own Yum! Brands (YUM) and McDonald's (MCD), the latter in size.

Scout manages over $4 billion and was founded in 1999. Before founding Scout, Weiss worked at Dan Loeb's Third Point and earned his MBA from Columbia University and undergraduate degree from Harvard. Crichton previously worked at Zweig-DiMenna and earned his MBA at Harvard.

Per Google Finance, Domino’s Pizza, Inc. (Domino’s) is "a pizza delivery company in the United States. The Company operates through a network of 8,999 company-owned and franchise stores, located in all 50 states and in more than 60 international markets. It operates in three segments: domestic stores, domestic supply chain and international."

Hedge Funds Pile Into QR National IPO (ASX: QRN)

A recent Australian initial public offering (IPO) has caught the eye of many prominent hedge funds. QR National (ASX: QRN), Queensland Rail's primarily coal network in Australia, recently became public with the backing of various new hedge fund owners. Shares IPO'd at AUD $2.55 and are now trading around AUD $2.77. It priced at the low end of the range and the Queensland government is left with a 40% ownership stake after the IPO raised $4.5 billion.

Adam Weiss and James Crichton's Scout Capital has disclosed a 5.1% ownership stake in QRN with 124 million shares (around a $316 million stake). We also recently detailed how Scout boosted its stake in Coca-Cola Enterprises (CCE). The Children's Investment Fund has also disclosed a 6.1% ownership stake in QRN with a $316 million position. Overall, 46% of QRN's recently IPO'd shares went to overseas investors with the buzz being that numerous other hedge funds have smaller positions.

Interestingly enough, a lot of domestic Australian long-only fund managers avoided the IPO as many argued it was overpriced. Hedge funds have clearly disagreed. Although we haven't been able to verify it yet, it's been rumored that Richard Perry's hedge fund Perry Capital had also taken a stake in the IPO. QRN is Australia's largest IPO since Telstra (Australia's monopoly phone carrier).

The propensity for hedge funds and investment managers in general to gravitate toward railroad plays is interesting. Some see these companies as attractive due to the oligopolistic nature of the business. Others fancy rails as plays on commodities, energy, or an economic recovery. Hell, Warren Buffett's Berkshire Hathaway even acquired rail company Burlington Northern Santa Fe in its entirety. And in the just released new issue of our Hedge Fund Wisdom newsletter, we see that many managers own shares of rival rail Union Pacific (UNP). And in Australia, this theme continues as QR National seems to be a play on coal.

Taken from the company's website, QR National is "QR National is the largest rail freight haulage operator in Australia by tonnes hauled, operating in key freight sectors and supply chains across the country. We are focused primarily on large, heavy haul rail tasks such as the transportation of coal, iron ore, other minerals, agricultural products and general freight as well as containerised freight."

Adam Weiss & James Crichton's Scout Capital Boosts Coca-Cola Enterprises (CCE) Stake

James Crichton and Adam Weiss' hedge fund Scout Capital recently filed a 13G with the SEC regarding shares of Coca-Cola Enterprises (CCE).

Per the filing, Scout Capital disclosed a 5.01% ownership stake in CCE with 16,719,500 shares due to portfolio activity on October 4th. This is a 35% increase in their position size as Crichton and Weiss' hedge fund held 12,350,000 shares back on June 30th.

Coca Cola Enterprises is a bit of an event driven play as Coca-Cola (KO) recently acquired the North American bottling operations of Coca-Cola Enterprises (CCE). CCE shareholders received a cash payout of $10 per share and the stock dropped 30% to reflect this.

Following the transaction, Goldman Sachs added CCE to its America Buy List with a price target of $28 per share (CCE currently trades around $24). Goldman feels that Coca-Cola Enterprises has "a stronger top-line growth outlook, a better margin/return profile and a dominant market share position." In the past, we've detailed how Jamie Dinan's York Capital was fond of Coca-Cola Enterprises and likes CCE's free cash flow.

This is the first time we've covered hedge fund Scout Capital and we will continue to do so from here on out. Adam Weiss founded Scout with James Crichton in August 1999. Before founding the hedge fund, Weiss worked at Dan Loeb's Third Point LLC (who we recently revealed has positions in gold bullion and Potash). Weiss received his degree from Harvard College (Phi Beta Kappa and a John Harvard Scholar) and his MBA from Columbia University.

Taken from Google Finance, Coca-Cola Enterprises (CCE) is "engaged in marketing, producing and distributing non-alcoholic beverages. The Company serves a market of approximately 421 million consumers throughout the United States, Canada, the United States Virgin Islands and certain other Caribbean islands, Belgium, continental France, Great Britain, Luxembourg, Monaco, and the Netherlands."