Pennant Capital Raises Ocwen Financial Stake

Alan Fournier's hedge fund firm Pennant Capital has filed a 13G with the SEC on their position in Ocwen Financial (OCN).  Per the filing, Pennant now owns 7.2% of the company with over 9.44 million shares.

This means they've boosted their position size by 4 million shares since the end of the second quarter.  Shares of OCN have been under extreme pressure as regulators scrutinize the non-bank servicers.  They're seeking to beef up compliance and have previously halted OCN's purchase of mortgage servicing rights (MSRs).

The filing was made due to activity on September 22nd. 

Per Google Finance, Ocwen Financial is "a financial services holding company. The Company is engaged in the servicing and origination of mortgage loans. The Company's Shared Appreciation Modification (SAM) incorporates principal reductions and lower payments for borrowers while providing a net present value positive loss mitigation outcome for investors, including the ability to recoup losses if property values increase over time."

Fairholme Capital Purchases Participation Interest in Sears Short-Term Loan

Bruce Berkowitz's Fairholme Capital has filed an amended 13D with the SEC regarding their position in Sears Holdings (SHLD).  Per the filing, Fairholme now owns 23.1% of the company with 24.64 million shares.

Berkowitz has now bought an additional 49,200 shares since his last amended 13D disclosure recently.

More importantly though, the filing notes that Berkowitz has participated in Sears' short-term loan.  The 13D indicates that:

"On September 30, 2014, The Fairholme Partnership, LP (the "Partnership"), a private fund affiliated with the Reporting Persons, purchased a 6.25% participation interest in the Short-Term Loan from entities affiliated with ESL Investments, Inc. pursuant to that certain Amended and Restated Participation Agreement, dated September 30, 2014, by and among PYOF 2014 Loans, LLC, the Partnership and affiliates of the ESL Investments, Inc. (the "A&R Participation Agreement")."

What We're Reading ~ Hedge Fund Links 10/3/14

Profile of Canyon Capital [Institutional Investor]

Perry Capital appeals Fannie, Freddie dismissal [FINalternatives]

Relational Investors plans to wind down [WSJ]

Goldman takes stake in Caxton [Reuters]

Hedge fund managers to increasingly defer performance fee pay-outs [COO Connect]

Short seller Chanos targets China's casino industry [Newsweek]

Complex and expensive but hedge funds can benefit us all [Telegraph]

Carol Loomis' 1970 piece: hard times come to hedge funds [AWJones]

Looking at the next generation of institutional investing [All About Alpha]

David Tepper's Latest Thoughts: Bloomberg Interview

Appaloosa Management's David Tepper sat down with Bloomberg TV today to discuss the upcoming Robin Hood Investors Conference that fights poverty in New York and to share some of his latest market thoughts.  Here are the highlights:


David Tepper's Bloomberg Interview


On his bet against bonds:  "They (ECB) haven't done any QE yet. So let them start some QE. But the beginning of the end was basically saying that when you create inflation and some inflation in the eurozone, then the bond market is going to start going down. If you don't create inflation in the eurozone of some sort or you don't stop the deflation, then that might not happen. But I do think that if they go in action, if they get in action, if they really get in action you will start creating inflation at some point in time. Until you do that, things will go where they go. And you can look at the curves over there."

On how the saying used to be "don't fight the Fed" and now it's "don't fight Draghi": "Yeah, I think that's probably right to a certain extent. I don't think you want to fight it, but you've got to understand what it's going to mean. So the extent that if he's really in action then you don't want to fight him, but he has to really get in action. You have to start QE. This negative interest rates doesn't necessarily have the effect of creating money. It doesn't necessarily have the effect of creating inflation. So if you want to do that, do that. But right now he's done nothing. So let him start."

On the US equity market multiple:  "Well I don't think it's high because if you – if you believe interest rates are 4 or 4.5 percent, 16.5 seems like about the right multiple. But I don't think we're at the 4.5 percent 10-years. We're at 2.5 percent 10-years or unfortunately 2.43 or something like that right now. And next year at 14 –"

On Fannie/Freddie:  "I wish I didn't have any investment.  And we're just – we're going to do a little bit more research and see where we stand in different courts. There's – it's – there's appeal processes for different lawsuits, so you’re not done with this particular court. You also have other courts that you’re involved in. I forget the name. The court of settlement claims or something like that.   So you have different places, different venues to – to – that you haven't brought a case yet, and also you can appeal this last decision. So I think that will go on. And then you want to see what happened exactly in this – in this judge's opinion right here. So you have to do some analysis right now to see where the securities are (inaudible) down a lot. Are they value now? Are they buy, sell, hold? That's what you have to do, reevaluate (inaudible)."

Tepper's thoughts on equities: "Well I kind of told you. Listen, it's – it's interesting on a multiple basis and – but you have to have certain things happening. You’ve got to have Europe stop – stop the nonsense, so to speak, Draghi stop the nonsense. So that's kind of it."


Embedded below is the video of Tepper's Bloomberg Television interview:



For more from Tepper, head to his call for the beginning of the end of the bond market bubble.

What We're Reading ~ Analytical Links 10/1/14

Do valuation shorts work? [CFA] 

Importance of ROIC: the math of compounding [Base Hit Investing]

The great American deleveraging continues [Yahoo]

The end of monetary policy [Forbes]

'Stock Market Wizards' take losses [Dasan]

Profile of Mohnish Pabrai [Forbes]

On China's economy: a test of will [Economist]

eBay does about-face in spinoff of PayPal [Dealbook]

On Apple Pay's eCommerce disruption [Starpoint]

Bullish piece on Bank of America [Barrons]

US poised to become world's leading liquid petroleum producer [FT]

Mystery man who moves Japanese markets [Bloomberg]

An investor's guide to better writing [imausa]

Citadel Adds To Acxiom Stake

Ken Griffin's Citadel has filed a 13G with the SEC regarding their position in Acxiom (ACXM).  Per the filing, Citadel now owns 5.1% of the company with over 4 million shares.

They've boosted their position size by over 2.7 million shares since the end of the second quarter.  The filing was required due to activity on September 25th.  ACXM shares have plummeted from $39 earlier this year down to current levels around $16.

Per Google Finance, Acxiom is "an enterprise data, analytics and software-as-a-service company. The Company operates in three segments: Marketing and Data Services, IT Infrastructure Management, and Other Services. The Marketing and Data Services segment includes its global lines of business for customer data integration, consumer insight solutions, marketing management services, and consulting and agency services. The IT Infrastructure Management segment develops and delivers information technology (IT) outsourcing and transformational solutions. The Other Services segment includes the e-mail fulfillment business, the United States risk business, and the United Kingdom fulfillment business. In July 2014, the Company acquired LiveRamp, Inc., a service for onboarding customer data into digital marketing applications."

Lone Pine Capital Boosts Tiffany Stake

Steve Mandel's hedge fund firm Lone Pine Capital has filed a 13G with the SEC regarding their position in Tiffany & Co (TIF).  Per the filing, Lone Pine now owns 5.3% of the company with over 6.85 million shares.

This means they've boosted their stake by over 2.61 million shares since the end of the second quarter.  The filing was made due to activity on September 18th.

You can view additional recent portfolio activity from Lone Pine here.

Per Google Finance, Tiffany's is "a holding company that operates through its subsidiary companies. The Company operates in five segments: Americas, Asia-Pacific, Japan, Europe and other. The Company's principal product category is jewelry, which represented 92% of worldwide net sales during the fiscal year ended January 31, 2014."

Eton Park Capital Increases Riverbed Technology Position

Eric Mindich's hedge fund firm Eton Park Capital has filed a 13G with the SEC regarding their position in Riverbed Technology (RVBD).  Per the filing, Eton Park now owns 5.63% of the company with 9 million shares.

This means they've increased their position size by over 6 million shares since the end of the second quarter.  The filing was made due to activity on September 18th.

Per Google Finance, Riverbed Technology "has developed solutions to the fundamental problems associated with information technology (IT) performance across wide area networks (WANs). Riverbed’s family of performance products include solutions for branch offices, mobile workers, private data centers, private clouds and cloud computing. The Company’s products include Steelhead products and Cascade product line."

Bruce Berkowitz's Wealthtrack Interview: AIG, BAC, FNMA

Consuelo Mack's Wealthtrack recently sat down with Fairholme Capital's Bruce Berkowitz to talk about his investments.  These days, he manages around $8 billion and his largest holding continues to be AIG (AIG).

He says he's still focused on financials because that's what he knows and what's in his circle of competence.  The main thing he's drawn to is the huge stature of some of the companies he's invested in.  He likes systemically important institutions (such as AIG and Bank of America).


On AIG

Berkowitz notes that AIG's tangible book value is around $75 and he's waiting for the company to trade around book value.  He says he has to keep trimming the position slightly because as the price increases, it becomes an even larger part of his portfolio (and it's already almost 50% of his portfolio).


On Bank of America

He bought Bank of America (BAC) because he felt it would eventually become more like a bank like Wells Fargo after restructuring and settling litigation.  As it still sells below book or runoff value, he says he's getting the "future for free and a discount on the books."


Fannie/Freddie

He compares this situation to AIG in that it's a very important organization where the government is involved.


Curiously absent from the discussion was another of Berkowitz's holdings: Sears.  Shares have declined recently and Berkowitz has been interested in participating in the company's short-term loan.


Embedded below is the video of Berkowitz's interview with Wealthtrack:

Sohn Conference San Francisco 2014: Ubben, Billick, McGuire & Moore

Today we're pleased to announce that the 2014 Sohn San Francisco Conference will be taking place next month.  The event features top hedge fund managers sharing investment ideas to benefit various charities.  You can register for the conference via this link.

Conference proceeds benefit the Sohn Conference Foundation, as well as Bay Area organizations focused on improving educational opportunities and life outcomes for underserved youth. This year's beneficiary group includes:  City Year San Jose/Silicon Valley, First Place for Youth,  Leadership Public Schools, Pathways for Kids and SEO Scholars San Francisco.

Here are the conference details:


Date, Time & Location

- Date: Wednesday, October 29th, 2014
- Time: 2:30 - 6:00 pm; general networking reception to follow
- Location: The Bently Reserve, 301 Battery Street, San Francisco, CA 94111


Speakers List

Jeffrey Ubben, Founder, CEO & CIO, ValueAct Capital

Kurt Billick, Founder and Chief Investment Officer, Bocage Capital
Mick McGuire, Founder & Managing Member, Marcato
Meridee Moore, Chief Investment Officer, Watershed Asset Management LLC
Sandy J. Colen, Manager & CIO, Apex Capital
Brian Zied, Founder & Portfolio Manager, Charter Bridge Capital Management, L.P.
Scott Fearon, President, Crown Capital Management
Mick Hellman, Founder & Managing Partner, HMI Capital LLC
Carl Kawaja, Portfolio Manager, Capital World Investors
Jose Medeiros, Co-Founder, Stonerise Capital Partners
Jeffrey Osher, Managing Director, Harvest Capital Strategies, LLC


Registration Flyer

Embedded below is the event flyer:





You can register for the event at the conference website here.  Support some great causes while hearing from of the brightest in the investment industry at the 2014 Sohn San Francisco Conference.

What We're Reading ~ Hedge Fund Links 9/26/14

Are hedge funds losing their appeal? [Institutional Investor]

SEC finds deficiencies at hedge funds [WSJ]

On hedge fund crowding [Alpha Beta Works]

Julian Robertson: bond bubble to end in 'very bad way' [Bloomberg]

Is that hedge fund really worth it? [Los Altos]

Hedge funds are still finding love, just not at Calpers [Dealbook]

Paulson pushed for Family Dollar sale as passive investor [Bloomberg]

Capitalising on the surge in hedge fund start-ups [COO Connect]

Financial elite's offspring start their own hedge funds [WSJ]

Spanish fund manager Parames said to leave Bestinver [BusinessWeek]

Tiger Global raising another huge venture fund [Fortune]

Merger arb: getting your stick to where the puck will be [All About Alpha]

Intel's use of hedge funds: another perspective [Cordant]

Warren Buffett Interview With Dan Gilbert

Berkshire Hathaway's Warren Buffett recently sat down for an interview with Dan Gilbert.  Below are the videos of their chat.

Video 1




Video 2



For more investing guru wisdom, check out recent notes from Charlie Munger's Daily Journal meeting as well.

Bruce Berkowitz Looking to Participate in Sears Short-Term Loan

Bruce Berkowitz's investment firm Fairholme Capital has filed an amended 13D on shares of Sears Holdings (SHLD).  We previously highlighted how Berkowitz bought more SHLD recently.

His previous filing noted that St. Joe (JOE) was in discussions to possibly participate in Sears' $400 million secured short-term loan.  Per the new filing, that fell through.

However, the new 13D indicates that Fairholme is in discussions concerning a "substantially smaller participation in the short-term loan."

It also appears as though Fairholme has sold 26,400 SHLD shares since his previous 13D filing only last week.

JAT Capital Boosts Madison Square Garden Stake Again

John Thaler's hedge fund firm JAT Capital has filed an amended 13D with the SEC regarding their position in Madison Square Garden (MSG).  Per the filing, JAT now owns 9.36% of the company with over 5.95 million shares.

This marks an increase of over 1 million shares since the last time JAT increased its MSG stake last month.  The latest filing was made due to the bulk of activity on September 18th where they bought MSG at $66.10

Per Google Finance, Madison Square Garden is "a holding company conducting its operations through direct and indirect subsidiaries. The Company is an integrated sports, entertainment and media business company. The Company operates in three segments: MSG Sports, MSG Media and MSG Entertainment. In March 2014, the Company purchased a 50% interest in Tribeca Enterprises."

What We're Reading ~ Analytical Links 9/24/14

The fulcrum security: what it is and why it matters [Third Avenue]

Jack Ma on Alibaba, entrepreneurs [Dealbook]

Stock buybacks: breaking the habit [Barrons]

The real reason Yahoo is so cheap [MicroFundy]

Beware the yield co [FT Alphaville]

Down but not out: iron ore miners still profitable in spite of lower prices [Economist]

The new population boom could easily be a dud [WSJ]

Why Amazon has no profits (and why it works) [Andreessen Horowitz]

US Treasury moves against tax-avoidance inversion deals [Reuters]

Mike Pearson's new prescription for the pharmaceuticals industry [Institutional Investor]

What 'big food' does with organic and natural [Fortune]

Warren Buffett's wrath: how Benjamin Moore almost broke his promise [Fortune]

29 charts that explain Americans' financial lives [Vox]

Only 49% of Americans have any money in stocks at all [CNN]

The end of consoles as we know it [alistdaily]

Institutional investor portfolio allocation, quantitative easing & the financial crisis [Bank of England]

Oaktree Capital Discloses Molycorp Stake

Howard Marks' investment firm Oaktree Capital has filed a 13G with the SEC regarding shares of Molycorp (MCP).  Oaktree now owns 9.1% of the company with over 24.47 million shares.

This is a newly disclosed stake and the filing was required due to activity on September 11th.  The filing notes that the shares beneficially owned are a result of direct ownership of 18,358,019 penny warrants and 6,119,340 Oaktree Warrants which are defined in the filing here.

If you haven't already, be sure to check out Howard Marks' book: The Most Important Thing.

Per Google Finance, Molycorp is "provides Rare Earths and Molybdenum products to companies. The Company's rare earth products comprise of bastnasite, cerium, europium, lanthanum, neodymium, praseodymium, yttrium, and other lanthanides."

Bruce Berkowitz's Fairholme Buys Sears Shares

Bruce Berkowitz's firm Fairholme Capital just filed a 13D with the SEC regarding shares of Sears Holdings (SHLD).  Per the filing, Fairholme now owns 24% of SHLD with over 25 million shares.

This means Berkowitz has added to his position size by over 850k shares since the end of the second quarter.  He's been a long-term Sears shareholder and shares have nosedived from $45 earlier in the year down to current levels of under $27.

The vast majority of this decline has been in recent days as news came out that the company was borrowing $400 million from its CEO Eddie Lampert's hedge fund (ESL Investments).  This has prodded fears that the company could eventually be in trouble.

Berkowitz was buying in early September around $32.28 but then ramped up purchases on September 5th and 8th around $33.21. It will be interesting to see if he ramps up his purchases even further now that shares are even lower.

Fairholme's filing also notes that one of their other investments is potentially involved here: St. Joe (JOE).  The filing indicates that, "The St. Joe Company, an affiliate of the Fund and Fairholme, is in discussions with the Issuer regarding the $400 million secured short-term loan disclosed on the 8-K filed by the Issuer on September 15, 2014.  The St. Joe Company may invest up to $100 million in participations relating to theShort Term Loan."

Berkowitz's 13D filing didn't note any other plans or proposals at this time.


Per Google Finance, Sears Holdings is "is a retailer with 2,172 full-line and 1,338 specialty retail stores in the United States operating through Kmart Holding Corporation (Kmart) and Sears, Roebuck and Co. (Sears) and 500 full-line and specialty retail stores in Canada operating through Sears Canada Inc. (Sears Canada), a 95%-owned subsidiary. The Company operates in three segments: Kmart, Sears Domestic and Sears Canada."

What We're Reading ~ Hedge Fund Links 9/19/14

Brevan Howard's Charlotte Valeur talks strategy [FINalternatives]

Seth Klarman cautions against complacency bubble [ValueWalk]

Picking hedge funds is hard [Abnormal Returns]

Highland Capital on whether the bull market in US airlines will continue [Harvest]

Don't forget the 'hedge' in hedge fund [First Adopter]

The beginning of the end of the hedge fund gravy train [Abnormal Returns]

Profile of ValueAct / Jeff Ubben [Fortune]

The (obscene) cost of hedge funds [FT Alphaville]

Trian makes case to split up DuPont [WSJ]

Tiger Ratan's Chopra stumbles in rise to top [Bloomberg]

Hedge fund's equity titans come unstuck in Europe [eFinancial News]

Activist investors build up their war chests [WSJ]

Alibaba gets interest from Tepper, Loeb, Cooperman [CNBC]

Oaktree fund betting big on economic downturn [CNBC]

Puerto Rico finds it has new friends in hedge funds [Dealbook]

Most hedge fund managers are overpaid [Bloomberg]

CFTC eases hedge fund advertising ban [WSJ]

What We're Reading ~ Analytical Links 9/17/14

Edge, time arbitrage and the shame of short-term thinking [Lux Capital]

A fireside chat with Charlie Munger [WSJ]

Buffett on market valuation [Brooklyn Investor]

Bears at their lowest level since 1987, now what? [Yahoo]

8 lessons from the first year of a registered investment advisory firm [Reformed Broker]

Competition is for losers [Peter Thiel]

An independent Scotland could become an energy powerhouse [Fortune]

Britain needs greater unity not a messy break-up [George Soros]

The tollbooth businesses of Visa & Mastercard [Scuttlebutt Investor]

A discussion on Apple Pay [Twitter]

Why banks are buying into Apple Pay [American Banker]

Thoughts on what the Apple Watch means [Daring Fireball]

Hermes takes the long view in China [FT]

Inflection point for Western Union? [YGC]

Alibaba's coming out party & valuation [Aswath Damodaran]

Alibaba IPO is a bonanza for select firms [WSJ]

On the rise of NY regulator Benjamin Lawsky [Bloomberg]

There is no bond bubble [Barrons]

Glenview Capital Boosts Fossil Group Stake

Larry Robbins' hedge fund firm Glenview Capital has filed a 13G with the SEC regarding shares of Fossil Group (FOSL).  Per the filing, Glenview now owns 6.15% of the company with 3.25 million shares.

This marks an increase of 582,100 shares since the end of the second quarter.  The filing was made due to activity on September 4th.  We've also detailed how another hedge fund has been active in FOSL shares.  Ricky Sandler's Eminence Capital also increased its Fossil stake this summer.


Per Google Finance, Fossil Group is "a global designer, marketer and distributer company that specializes in consumer fashion accessories. The Company’s offerings include a line of men's and women's fashion watches and jewelry, handbags, small leather goods, belts, sunglasses, soft accessories and clothing. Its products are distributed globally through various distribution channels, including wholesale in countries where it has a physical presence, direct to the consumer through its retail stores and commercial websites and through third-party distributors in countries where the Company do not maintain a physical presence."

We've detailed other recent portfolio activity from Glenview here.