What We're Reading ~ Hedge Fund Links 10/24/14

Paul Tudor Jones says commodities will be ugly until 2020 [Business Insider]

Investors add $18b to hedge funds in Q3 [FINalternatives]

On hedge funds' use of social media [ValueWalk]

A look at Paulson & Co's recent activity [ii alpha]

Children's Investment Fund drops Coal India campaign & sells stake [FT]

Bill Ackman targets stake in US company [Bloomberg]

Lukewarm reaction to corporate splits ding hedge funds [WSJ]

Hedge fund favorites tumble with average stock loss 16% [Bloomberg]

Misery widespread at hedge funds [WSJ]

Paulson urges Allergan to consider buying Shire [Dealbook]

Top pension funds probed for hedge fund use [Bloomberg]

What We're Reading ~ Analytical Links 10/23/14

On the mantra that interest rates have to rise [Aleph Blog]

Why market volatility matters: it makes investors do stupid things [Abnormal Returns]

A look at Hertz Global [Seventeen Mile]

On how much Bank of America is actually making [Bloomberg View]

Ocwen still under scrutiny from regulators [Bloomberg]

Some companies should stop giving forecasts [Herb Greenberg]

How should investors view cash? [Vanguard]

Profile of Jim Koch, the head of Sam Adams [Atlantic]

Enhancing financial stability by improving culture in FinServices industry [NY Fed]

Has IBM been utilizing their cash poorly? [Dealbook]

Full Vanity Fair interview with Apple's Jony Ive [Apple Insider]

What makes a great investor from a venture capital perspective [Product Hunt]

Third Point's Q3 Letter: Long Amgen, eBay & Alibaba, Exited Sony

Dan Loeb's hedge fund firm Third Point is out with its third quarter letter.  In it, the firm reveals that they've added to their stake in Amgen (AMGN), established a sizable new position in eBay (EBAY), and have a significant direct investment in the newly public Alibaba (BABA). 

Additionally, they've exited their long of Sony.  They also reduced or exited positions in AIG, Hertz, Softbank, LNG.

Then, with the recent market volatility, they lifted some hedges and added back to positions that they had previously sold at higher levels.  Third Point writes, "Although consensus has shifted to lower growth, slower inflation, modest rates, and continued monetary expansion, we think the markets will resume an overall upward trajectory in the US through year-end."

Embedded below is Third Point's Q3 letter where they specifically talk about AMGN, EBAY, BABA and SNE:



You can download a .pdf copy here.

Corvex Capital's Presentation on Crown Castle (CCI)

At the Robin Hood Investors Conference the past few days, Keith Meister of Corvex Capital sat down with CNBC to talk about his positions.

He owns almost $1 billion worth of Crown Castle International (CCI), the wireless tower operator.  He says it's the best combination of real estate and telco.  He likes their fixed cashflow and that they benefit from the big

He says the problem with CCI is they need to payout cash to shareholders by ramping up a dividend and growing that dividend at 10% a year.

Meister also noted that he's a passive shareholder of Allergan (AGN) and likes being aligned with Bill Ackman's Pershing Square.  Simply put, he wants AGN to sell their company for the highest price possible.


Embedded below is the video of Meister's interview at Robin Hood:



As well as Meister's interview on Allergan:





Additionally, here's Corvex's presentations on CCI via embedded slideshows below:

Letter to CCI Shareholders:




CCI Presentation:




Robin Hood CCI Presentation:




You can download the .pdf's here.

David Einhorn: Seeing Buying Opportunities Past Few Weeks

At the Robin Hood Investors Conference this week, Greenlight Capital's David Einhorn sat down with CNBC to talk markets.  He said he's seeing a lot of opportunities now and has bought "a bunch of things" the past couple of weeks.

Einhorn says he's not concerned with the day-to-day swings of the market as that's not his circle of competence.  He mentioned he hasn't been as long as some other people and has used the recent weakness to add to positions/establish new ones.

He continues to like Apple (AAPL), saying it trades at 10x next year's earnings net of cash.  The Greenlight founder also continues to be short AthenaHealth (ATHN).

Lastly, he likes SunEdison (SUNE) and thinks it can head to $32 per share (just under $19 now), arguing that it's a simple thesis but a complicated financial story since they own interests in various companies.


Embedded below are the videos of Einhorn's interview at Robin Hood:


Video 1




Video 2




Video 3




Video 4

Robin Hood Investors Conference 2014: Summary of Stock Picks

The 2014 Robin Hood Conference took place over the past two days in New York where hedge fund managers presented their latest investment ideas to benefit the Robin Hood Foundation which fights poverty.  Julia La Roche of Business Insider tweeted tidbits from the event and here's an aggregation of them all.


Stock Picks From Robin Hood Investors Conference 2014


David Einhorn (Greenlight Capital): long SunEdison (SUNE), Greek banks like Alpha and Piraeus (via warrants).  Short French debt.

David Tepper (Appaloosa Management): short the Euro.

Larry Robbins (Glenview Capital): long Community Health (CYH), Realogy (RLGY), VCA (WOOF), Fidelity National Financial (FNF)

Dan Loeb (Third Point): long Amgen (AMGN) and has talked to management

Paul Tudor Jones (Tudor Investment Corp): Thinks commodities will be a mess until 2020, likes US stocks.

Jim Chanos (Kynikos Associates): Short Petrobras

Scott Ferguson (Sachem Head): Long Comcast (CMCSA).  He previously worked at Ackman's Pershing Square.

Keith Meister (Corvex Capital): Long Crown Castle International (CCI), also long Allergan (AGN).

Zach Schreiber (PointState Capital): ex-Duquesne guy, used to work with Stan Druckenmiller.  Long Cheniere Energy (LNG).

Nehal Chopra (Tiger Ratan Capital): long Charter Communications (CHTR)

Fred Wilson (Union Square Ventures): Venture Capital, not equities but insinuated he'd be short Netflix (NFLX), Amazon (AMZN), and eBay (EBAY).

Tom Wagner (Knighthead Capital): long American Airlines (AAL)

Matthew Sidman (Three Bays Capital): long Churchill Downs (CHDN)

Ricky Sandler (Eminence Capital): long Telefonica Brasil (VIV) and eBay (EBAY)

Traci Lerner (Chesapeake Partners): long American Airlines (AAL), Gencorp (GY) and Eagle Materials (EXP)

Whitney Tilson (Kase Capital): long Sodastream (SODA) and Micron (MU).  Short Lumber Liquidators (LL) and Exact Sciences (EXAS)

Ivy Zelman (Zelman Associates): long homebuilders, Lennar (LEN), Pulte (PHM), Toll (TOL), as well as Fortune Home & Security (FBHS) and Mohawk (MHK).

Bill Eigen (JPMorgan): Short bonds to play volatility

Nathaniel August (Mangrove Partners): Short Worldwide Wrestling Entertainment (WWE), long Fortress Investment Group (FIG)

Oleg Nodelman (EcoR1 Capital): long Clovis (CLVS)

Amish Mehta (SQN Investors): long Blucora (BCOR)

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Wilson Conferences
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http://WilsonConferences.com/Super

The New House of Money: Jim Chanos' Interview With Steven Drobny

Steven Drobny has released a chapter from his new book, The New House of Money. Chapter 2, The Biggest Short, features an interview with short seller Jim Chanos of hedge fund Kynikos Associates.

Embedded below is the chapter from The New House of Money:



You can find out more about the book here.

Bridger Capital Increases Position in The Medicines Company

Roberto Mignone's hedge fund firm Bridger Capital has filed a 13G with the SEC regarding their stake in The Medicines Company (MDCO).  Per the filing, Bridger now owns 5.1% of MDCO with over 3.3 million shares.

This means they've boosted their stake by over 1.44 million shares since the end of the second quarter.  The filing was made due to activity on October 8th.

You can view additional portfolio activity from Bridger here.

Per Google Finance, Medicines Co is "a pharmaceutical company focused on the treatment of critical care patients through the delivery of medicines to the global hospital marketplace. The Company has three marketed products: Angiomax(bivalirudin), Cleviprex (clevidipine butyrate) injectable emulsion and its ready-to-use formulation of Argatroban. It also has a pipeline of acute and intensive care hospital products in development, including three late-stage development product candidates, cangrelor, oritavancin and MDCO-157, and two early stage development product candidates, MDCO-2010 and MDCO-216. All of its acute care generic products are injectable products."

JANA Partners Ramps Up Hertz Stake, Files 13D

Barry Rosenstein's hedge fund firm JANA Partners has filed a 13D with the SEC regarding their stake in Hertz Global Holdings (HTZ).  Per the filing, JANA now owns 7% of HTZ with over 32 million shares (including options to purchase 11.37 million shares).

They've increased their position size by over 26.1 million shares since the end of the second quarter.  The filing was required due to portfolio activity on October 10th and notes that while they were our purchasing shares in mid-October around $21.67, they also acquired a lot of shares upon the exercise of options.

JANA's 13D indicates JANA has had (and may continue to have) discussions with the board of directors regarding management succession and board composition.

They're not the only hedge fund who has been intrigued by shares of HTZ as they've fallen.  Last week we pointed out that Glenview Capital's Larry Robbins was positive on car rental companies (specifically HTZ and Avis Car Budget (CAR)).

Hertz has been somewhat of a hedge fund hotel and and lot of investors have come and gone.  As a result, shares have been more volatile.  Clearly, JANA has seen this volatility as opportunity.

JANA has been actively trading recently and we highlighted how they exited their QEP Resources stake and added to their Walgreen position.

Per Google Finance, Hertz is "its operating company and a direct wholly owned subsidiary of Hertz Investors, Inc., which is wholly owned by Hertz Holdings. Its business operates in two segments: rental and leasing of cars, crossovers and light trucks (car rental), and rental of industrial, construction and material handling equipment (equipment rental). In its equipment rental business segment, it rents equipment through approximately 340 branches in the United States, Canada, France, Spain, Italy, China and Saudi Arabia, as well as through its international licensees."

JANA Partners Exits QEP Resources

Last month, we drew attention to the fact that hedge fund JANA Partners had reduced its QEP Resources stake.  With a newly filed 13D, Barry Rosenstein's activist firm has disclosed that they no longer own a stake in the company.

The filing was made due to activity on October 13th.  Previously, JANA had owned over 12.96 million shares. 

Per their latest 13D filing, JANA sold over 2.3 million shares at $22.50 on October 14th, and really ramped up liquidation of the rest of their stake on October 15th at prices ranging from $20.68 to $21.22.

For more on this hedge fund, just yesterday we highlighted some recent buying activity from JANA in another stock.

Per Google Finance, QEP Resources "operates in three lines of business: gas and oil exploration and production, midstream field services, and energy marketing. It conducted through three principal subsidiaries: QEP Energy Company (QEP Energy) acquires, explores for, develops and produces natural gas, oil, and natural gas liquids (NGL); QEP Field Services Company (QEP Field Services) provides midstream field services, including natural gas gathering, processing, compression and treating services for affiliates and third parties; andQEP Marketing Company (QEP Marketing) markets affiliate and third-party natural gas and oil, provides risk-management services, and owns and operates an underground gas-storage reservoir."

Viking Global Updates Wayfair Stake

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC regarding Wayfair (W).  Per the filing, Viking now owns 12.6% of the company with 1,750,236 shares.

It should be noted that Viking also filed a Form 3 regarding Wayfair indicating that they previously owned Class B shares and they were converted into Class A common stock.

Viking acquired 400,000 shares at $29 per share in connection with the company's IPO on October 2nd.  Additionally, they acquired 25,000 shares at $36 and 54,250 shares at $35.53 in open market transactions.

You can view other portfolio activity from Viking Global here.

Per Google Finance, Wayfair is "transforming the way people shop for their homes. The Company has created online destinations for the home. Through its e-commerce business model, the Company offers visually inspiring browsing, compelling merchandising, easy product discovery and prices for over seven million products from over 7,000 suppliers across five brands: Wayfair.com, Joss & Main, AllModern, DwellStudio and Birch Lane. The Company’s technology and data focus facilitates critical e-commerce capabilities, such as shopping experiences across its five brands, consumer targeting and personalization, and anytime, anywhere shopping across its Websites, mobile-optimized Websites and mobile applications.The Company offers consumers a one-stop shop with home goods pricing designed to be on par with big box retailers and a merchandising experience designed to be on par with specialty retailers."

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.

JANA Partners Adds to Walgreen Stake

Barry Rosenstein's activist hedge fund JANA Partners has filed a Form 4 with the SEC regarding their stake in Walgreen (WAG).  Per the filing, JANA now owns 13.75 million shares of WAG.

They were out buying on October 10th, 13th, and 14th at prices of $62.80, $62.02, and $60.68.  They purchased 1.25 million shares in total recently.  Rosenstein is also on WAG's board of directors.

Shares of WAG were hit in August after the company announced they'd be completing the Alliance Boots merger but would not be doing a tax inversion, something many investors were hoping for.

You can view additional recent portfolio activity from JANA here.

ValueAct Again Buys Allison Transmission Shares

Jeff Ubben's activist firm ValueAct Capital has filed yet another Form 4 with the SEC regarding their stake in Allison Transmission (ALSN).  Per the filing, ValueAct has purchased an additional 200,000 ALSN shares.

They were buying on October 10th at around $27.62 and October 13th around $27.09.  In total, their position size is now over 19.05 million shares.

As we've highlighted previously, the most recent issue of our Hedge Fund Wisdom newsletter analyzed ALSN if you want to read up on the bull/bear thesis.

Balyasny Asset Management Boosts Churchill Downs Position

Dmitry Balyasny's firm Balyasny Asset Management has filed a 13G with the SEC regarding their stake in Churchill Downs (CHDN).  Per the filing, Balyasny now owns 5.24% of the company with 909,724 shares.

This marks an increase of 285,477 shares in their position size since the end of the second quarter.  The filing was required due to activity on October 7th.

Per Google Finance, Churchill Downs is "a diversified provider of pari-mutuel horseracing, casino gaming, entertainment, and is the country’s premier source of online account wagering on horseracing events. The Company offers gaming products through its casino in Mississippi, its slot and video poker operations in Louisiana and its slot and poker operations in Florida."

Eminence Capital Discloses FNFV Group Stake

Per a 13G filed with the SEC, Ricky Sandler's hedge fund firm Eminence Capital has revealed a new position in FNFV Group (FNFV).  They now own 6.1% of shares via their 5.55 million share position.  The filing was made due to activity on September 30th.

FNFV was spun-off from Fidelity National Financial (FNF) this summer.  Each 'old' share of FNF was converted into a new share of FNF and 0.3333 of a share of the newly created FNFV.  The latter is a tracking stock, and that's what Eminence has now reported a stake in.

We've also posted other recent portfolio activity from Eminence here.

Per Yahoo Finance, FNFV stands for Fidelity National Financial Ventures and it operates as the investment arm of Fidelity National Financial. 

What We're Reading ~ Analytical Links 10/15/14

Berkshire Beyond Buffett: The Enduring Value of Values [Lawrence Cunningham]

On spectrum value and a case for Verizon [Bronte Capital]

Importance of ROIC: A glance at the last 42 years of Wells Fargo [Base Hit Investing]

Building the perfect investor [Millennial Invest]

A look at the potential future for the cable industry [GlennChan]

Pay TV's new worry: 'shaving' the cord [WSJ]

Six figure incomes - and facing financial ruin [WSJ]

T-Mobile's stock slump offers buying opportunity [Yahoo]

On how Buffett's portfolio managers are faring [Fortune]

Why millennials are shunning cars [Washington Post]

The freelance economy and word of mouth [HBR]

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Einhorn's Greenlight Capital Files 13D on Civeo

David Einhorn's hedge fund firm Greenlight Capital has filed a 13D on shares of Civeo (CVEO).  Per the filing, they now own 9.99% of the company with over 10.65 million shares.

This means they've boosted their holdings by over 4.5 million shares since the end of the second quarter.  The filing was made due to activity on September 30th but they've continued to buy into October.  They've purchased shares in the $12.37 range recently.

Greenlight originally received shares of CVEO in the spin-off from Oil States International (OIS), which they also own.

Einhorn's 13D indicates that they've had conversations with the board and made the following suggestions: the company should take on leverage to make its capital structure more appropriate for a real estate company, the company should aggressively return capital to shareholders via dividends, and the company should replace its CEO.

For more from this hedge fund, check out Einhorn's recent comments at the Great Investors' Best Ideas conference this week.