Value Investing Congress Discount Expires in One Week

If you missed it, MarketFolly readers receive a $500 discount to the upcoming Value Investing Congress in Las Vegas on April 3rd and 4th.  This is a reminder to take advantage of these savings because the discount expires in one week.


Discount Code

Registration Link: http://www.valueinvestingcongress.com/vegas/register/
Discount Code: FOLLY2


Conference Details

The event takes place at Encore at Wynn in Las Vegas on April 3rd and 4th, only a few weeks away.  Hear the latest hedge fund investment ideas and network with other investors.  And since the event ends on Friday, stay the weekend in Vegas and have some more fun.


Hedge Fund Presentations From

- Eric Sprott, Sprott Asset Management
- Lisa Rapuano, Lane Five Capital
- Carlo Cannell, Cannell Capital
- Tom Russo, Gardner Russo & Gardner 
- Sahm Adrangi, Kerrisdale Capital
- Whitney Tilson, Kase Capital
- Daniel Miller, Gabelli Funds 
- Zeke Ashton, Centaur Capital Partners
- Isaac Schwartz, Robotti & Co
- David Hurwitz, SC Fundamental
- Michael Kao, Akanthos Capital
- Albert Yong & Chan Lee, Petra Capital
- John Lewis, Osmium Partners 
- Tim Eriksen, Eriksen Capital
- Dan Ferris, Extreme Value 
- Chris Mayer, Agora Financial
- David Neuhauser, Livermore Partners 
- Richard Lashley, PL Capital
- Arnaud Ajdler, Engine Capital 
- Eric Andersen, Western Standard 
- Mystery short-seller: "The Sleuth of Wall Street"


Discount Expires in One Week

Take advantage of the discount before it expires:  Click here to register and use discount code: FOLLY2

Enjoy!

Hoplite Capital Reveals SunEdison Stake

John Lykouretzos' hedge fund firm Hoplite Capital has filed a 13G with the SEC and revealed a new equity position in SunEdison (SUNE).  Per the filing, the hedge fund now owns 5.99% of SUNE with over 16 million shares.

The filing was made due to activity on February 26th.  Omega Advisors' Lee Cooperman highlighted his fondness for SUNE a few months back as well, as the company is spinning off its money-losing semiconductor business.

Per Google Finance, SunEdison is "formerly MEMC Electronic Materials, Inc is engaged in the development, manufacture and sale of silicon wafers. The Company is a developer and seller of photovoltaic energy solutions. Through Solar Materials and Solar Energy (SunEdison), it is a developer of solar energy projects. The Company operates in two segments: semiconductor materials and solar energy. The Company’s Solar Energy segment includes the operations of its old Solar Materials segment, as well as its SunEdison business. In the Semiconductor Materials, the Company offers wafers with a variety of features. The Company’s wafers vary in size, surface features, composition, purity levels, crystal properties and electrical properties

You can view some past portfolio activity from Hoplite here.

Luxor Capital Acquires Convertible Preferred Stock in Altisource Asset Management

Hedge fund firm Luxor Capital has acquired 250,000 shares of convertible preferred stock in Altisource Asset Management (AAMC), the company announced today.

AAMC announced a $300 million buyback and raised $250 million from the private placement of these shares to Luxor.  The hedge fund won't receive dividends and the conversion price is $1,250 per share.


Mortgage Servicers Under Scrutiny

Altisource Asset Management is one of the companies in Bill Erbey's empire (along with Ocwen Financial (OCN), Altisource Portfolio Solutions (ASPS) and Altisource Residential (RESI)).  Shares of numerous of these companies have been under fire this year as regulatory scrutiny on mortgage servicers has picked up.  In the past, we've highlighted the investment thesis on ASPS.


Hedge Funds Involved in MSR-Related Plays

At the end of the fourth quarter (and before the scrutiny intensified), numerous hedge funds were involved in these companies.  Given the volatility in shares, it's hard to say who is still involved besides Luxor.  But here's a list of top holders as of Q4 2013:


AAMC: SAB Capital Management, Neuberger Berman, Tiger Eye Capital, Luxor Capital, Long Pond Capital, Capital Research Global Investors, White Elm Capital, Tyrian Investments

OCN: Capital Research Global Investors, Neuberger Berman, Egerton Capital, Pennant Capital, Pine River Capital, White Elm Capital,Tyrian Investments

ASPS: Neuberger Berman, Luxor Capital, Renaissance Technologies, Omega Advisors, SAB Capital, White Elm Capital, Tiger Eye Capital,Tyrian Investments

RESI: Capital Research Global Investors, SAB Capital, BlackRock, Bloom Tree Partners, Neuberger Berman, Hayman Capital


Last week, Kyle Bass' hedge fund Hayman Capital boosted its stake in Nationstar Mortgage Holdings as well.

Hayman Capital Ramps Up Nationstar Mortgage Holdings Stake

Kyle Bass' hedge fund firm Hayman Capital has filed a 13G with the SEC regarding its stake in Nationstar Mortgage Holdings (NSM).  Per the filing, Hayman has disclosed they own 5.3% of the company with over 4.75 million shares.

This is an increase of over 3.67 million shares since the end of 2013.  The filing was required due to activity on March 13th.

Shares of NSM and other mortgage servicers like Ocwen Financial (OCN) have dropped this year as non-bank servicers have started to come under scrutiny from regulators.

Per Google Finance, Nationstar Mortgage Holdings is "a non-bank residential mortgage servicer with a range of services across the residential mortgage product spectrum. The Company’s clients include national and regional banks, government organizations, securitization trusts, private investment funds and other owners of residential mortgage loans and securities. It is a partner of financial organizations, including government-sponsored enterprises (GSEs) and other regulated institutions."

For more on this manager, head to an interview with Kyle Bass from House of Money.

Warren Buffett Does Asset Swap With Graham Holdings

Warren Buffett's Berkshire Hathaway has announced a deal with Graham Holdings (formerly the Washington Post) to swap the vast majority of Berkshire's 28% stake in the company for a television station in Miami (WPLG), some of the Berkshire shares Graham possesses, and a few hundred million in cash.

The total deal is valued around $1.1 billion.  The Washington Post sold its namesake newspaper to Amazon.com's Jeff Bezos and left a company of various other businesses behind.  The Post had been a longstanding position in Buffett's portfolio as he originally took a stake in 1973.

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

Market comments from Jamie Dinan, Rich Pzena & Doug Silverman [CNBC]

Seth Klarman on 'The Truman Show' market [Zero Hedge]

Steve Mandel's investment checklist [First Adopter]

When hedge funds lobby [Reuters]

Soros warns EU 'may not survive' financial crisis [HuffingtonPost]

Prem Watsa on why there's a monstrous real estate bubble in China [Zero Hedge]

Ackman says investigation finds Herbalife violates Chinese laws [Bloomberg]

A new name for SAC Capital: Point72 [Dealbook]

Interview with Grandmaster Capital's Patrick Wolff [Barrons]

Crispin Odey: US turnaround will spark emerging market recession [Citywire]

The value fund manager with the $57 million paycheck [Bloomberg]

10 tips for young Wall Street [CNBC]

What We're Reading ~ Analytical Links 3/12/14

On UnionPay, China and smuggling money in Macau [Thomson Reuters]

Google's Eric Schmidt on the future of internet freedom [NYTimes]

IPOs: when stability creates instability [Pragmatic Capitalism]

Fannie Mae/Freddie Mac would be eliminated in Senate Bill [BusinessWeek]

The 'easy money' myth [Reformed Broker]

Media industry lists things that worry them about TWC/Comcast merger [WSJ]

Are malls over? [The New Yorker]

The future of TV is coming into focus and looks pretty great [Quartz]

Barely keeping up in TV's new golden age [NYTimes]

Mexico seeks telco and TV competition [Advanced Television]

Big batteries threaten big power stations and utilities' profits [Economist]

Kate Spade (KATE) faces uphill fight to be next Ralph Lauren [Bloomberg]

Smartphone payment system to be unveiled in UK [FT]

The gaming console market is in crisis [TechCrunch]

Google looking to keep its search engine relevant in age of apps [WSJ]

The future of wearable technology [SlideShare]

Alibaba to buy control of ChinaVision [Reuters]

Pershing Square Exercises Warrants on Platform Specialty Products

Bill Ackman's hedge fund firm Pershing Square Capital has updated its stake in Platform Specialty Products (PAH).  Per a Form 4 filed with the SEC, Pershing Square has revealed that they exercised their warrants on the name.

They owned 12,500,0001 warrants and each 3 warrants entitles the holder on exercise to buy 1 share of common stock for $11.50.  As such, Pershing received 4,166,665 shares of PAH.  The transaction took place on March 7th, 2014.

After this, Pershing Square owns 33.3 million shares of Platform Specialty Products.  Pershing disclosed their PAH stake in January once shares listed on the NYSE.  However, keep in mind that Pershing owned a stake prior to this listing.

We've also highlighted how fellow hedge fund Blue Ridge Capital also owns a PAH stake as well. 

And then of course Martin Franklin of Jarden and Nicolas Berggruen of Berggruen Holdings are involved too.  Platform was formed with the intent to acquire companies and their first deal was MacDermid, a specialty chemicals manufacturer for $1.8 billion.

This isn't the first time Ackman has worked with Berggruen either.  They teamed up on Justice Holdings, which then bought Burger King.

JANA Partners Trims Outerwall Position

Barry Rosenstein's activist hedge fund JANA Partners has filed an amended 13D on their position in Outerwall (OUTR).  Per the filing, JANA has disclosed a 8.4% ownerships take in OUTR with over 1.7 million shares.

JANA sold 2 million OUTR shares at $68 on March 6th.  Regarding this transaction, JANA says that,

"The Reporting Person has reduced the size of its investment in the Shares of the Issuer through regular portfolio management activities. The Reporting Person is highly supportive of the recent steps taken by the Issuer’s board and management, including the Issuer’s improved focus on capital allocation and managing costs and its enhanced commitment to returning capital to shareholders."

We highlighted when JANA originally disclosed their activist OUTR stake in October of 2013.

Per Google Finance, Outerwall is "formerly Coinstar, Inc., is a provider of automated retail solutions, which offers convenient products and services. the Company's offerings in automated retail include its Redbox business, where consumers can rent or purchase movies and video games from self-service kiosks (Redbox segment), and its Coin business, where consumers can convert their coin to cash or stored value products at self-service coin counting kiosks (Coin segment). Its New Ventures business (New Ventures segment) is focused on identifying, evaluating, building, and developing self-service concepts in the marketplace."

You can view additional recent portfolio activity from JANA Partners here.

York Capital Discloses Elbit Imaging Stake

Jamie Dinan's hedge fund firm York Capital has disclosed a position in Elbit Imaging (EMITF).  Per a 13G filed with the SEC, York now owns 19.7% of Elbit Imaging with over 108.9 million shares.

The filing was required due to portfolio activity on February 28th and this is a newly disclosed equity stake.

The company recently announced a debt restructuring where its unsecured financial creditors received ordinary shares 

Dinan gave his rules of investing in a rare interview recently and shared his market thoughts if you missed it.

Per Google Finance, Elbit Imaging is "an Israel-based holding company. It operates in the fields of Commercial and Entertainment Centers, engaged in the initiation, construction and sale of shopping and entertainment centers and other mixed-use real property projects, predominantly in the retail sector; United States Real Property, investing in commercial real property in the United States; Hotels, engaged in the management and operation of hotels; Medical Industries, engaged in research and development, production and marketing of magnetic resonance imaging guided focused ultrasound treatment equipment and development of stem cell population expansion technologies and stem cell therapy products for transplantation and regenerative medicine; Residential Projects, engaged in the initiation, construction and sale of residential projects and other mixed-use real property projects, predominately residential, and Fashion Apparel, engaged in the Distribution and marketing of fashion apparel and accessories."

Viking Global Boosts Illumina Holdings

Andreas Halvorsen's hedge fund firm Viking Global filed a 13G with the SEC regarding their stake in Illumina (ILMN).  Per the filing, Viking has disclosed a 5.5% ownership stake in Illumina with over 7.1 million shares.

This marks an increase of over 5.4 million shares since the end of 2013.  The filing was made due to activity on February 28th.  Since the beginning of 2014, ILMN shares have spiked higher from $110 to $167 currently.

For more on this manager, check out a rare interview with Andreas Halvorsen on investment process.

Per Google Finance, Illumina is "a developer and manufacturer of life science tools and integrated systems for the analysis of genetic variation and function. The Company provides a line of genetic analysis solutions, with products and services that serve a range of interconnected markets, including sequencing, genotyping, gene expression, and molecular diagnostics. The Company is organized in two business segments: Life Sciences and Diagnostics. Its Life Sciences business unit includes all products and services related to the research market, namely the product lines based on its sequencing, BeadArray, VeraCode, and real-time PCR technologies. Its Diagnostics business unit focuses on molecular diagnostics. In February 2014, Illumina, Inc. announced that Novogene purchased one HiSeq X Ten. In March 2014, WuXi Genome Center has purchased Illumina HiSeq X Ten sequencing system."

Senator Investment Group Exits API Technologies Position

Alex Klabin and Doug Silverman's hedge fund firm Senator Investment Group has filed a Form 4 and 13G with the SEC regarding shares of API Technologies (ATNY).  Per the filings, Senator has sold over 5.9 million shares of ATNY at a price of $2.41 on March 7th.

After this transaction, this means Senator has completely exited their stake in API Technologies and no longer own any shares.

You can view other recent portfolio activity from Senator here.

Per Google Finance, API Technologies "designs, develops and manufactures systems, subsystems, radio frequency (RF) and secure communications products, as well as provides electronics manufacturing and engineering services. Its product lines include engineered products (including unmanned aerial vehicles (UAVs), aiming systems and synthesizers), secure communications products (including TEMPEST and emanation security, encryption and secure networking products), subsystems and components (including custom hybrids, terminals, transistors and magnetics), RF and microwave products (including custom filters, amplifiers, connectors and antennas), sensors, and power systems. It operates in two segments: Systems & Subsystems, and Secure Systems & Information Assurance."

Paulson & Co Boosts Enzymotec Stake

John Paulson's hedge fund firm Paulson & Co has filed an amended 13G with the SEC and updated their stake in Enzymotec (ENZY).  Per the filing, Paulson now owns 19.24% of the company with over 4.1 million shares.

This marks an increase of over 2.4 million shares since the end of 2013.  The filing was made due to activity on February 28th.

Per Google Finance, Enzymotec is "engaged in manufacturing of ingredients and medical foods company. Its technologies, research, and clinical validation process enables the Company to develop differentiated solutions across a variety of products. The Company markets its product portfolio primarily to established global consumer companies and target large and growing consumer health and wellness markets. Its clinically validated products include bio-functional lipid-based compounds designed to address dietary needs, medical disorders and common diseases. The Company operates in two segments: Nutrition and VAYA Pharma. In addition to its existing products, the Company has several other products to address additional indications in the development phase. enzyme processes; lipid modification; lipid analysis; and process technology and development.."

Discount to the Value Investing Congress in Las Vegas For Our Readers

MarketFolly has secured a big discount for our readers to the upcoming Value Investing Congress in Las Vegas on April 3rd and 4th, 2014.  The press is not being allowed at this event, so get to Vegas if you want to hear what hedge funds are buying and shorting lately (especially if you're on the west coast).

You can save $500 via this link by using the discount code: FOLLY2


VIC Las Vegas Speakers List

- Eric Sprott, Sprott Asset Management
- Lisa Rapuano, Lane Five Capital
- Carlo Cannell, Cannell Capital
- Tom Russo, Gardner Russo & Gardner
- Sahm Adrangi, Kerrisdale Capital
- Whitney Tilson, Kase Capital
- Daniel Miller, Gabelli Funds
- Zeke Ashton, Centaur Capital Partners
- Isaac Schwartz, Robotti & Co
- David Hurwitz, SC Fundamental
- Michael Kao, Akanthos Capital
- Albert Yong & Chan Lee, Petra Capital
- John Lewis, Osmium Partners
- Tim Eriksen, Eriksen Capital
- Dan Ferris, Extreme Value
- Chris Mayer, Agora Financial
- David Neuhauser, Livermore Partners
- Richard Lashley, PL Capital
- Arnaud Ajdler, Engine Capital
- Eric Andersen, Western Standard
- Mystery short-seller: "The Sleuth of Wall Street"


Conference Details

Where:  Encore at Wynn, Las Vegas

When:  April 3rd and 4th, 2014

Why:  Hear unique investment ideas, ask the managers questions about their pitch, and network with other investors.  And since the conference ends on Friday, stay the weekend in Vegas and turn it into a mini-vacation.  


Discount For Market Folly Readers

Click here to take advantage of our special discount

To save $500 off registration, you MUST use the discount code: FOLLY2

What We're Reading ~ Hedge Fund Links 3/7/14

A look at Paul Tudor Jones [Dealbook]

Some hedge fund best ideas for 2014 [WSJ]

David Einhorn will speak at this upcoming conference [Make a Difference Wisconsin]

Einhorn: many stocks have completely disconnected from valuations [ValueWalk]

Loeb sees more volatility this year [Bloomberg]

Blackstone buys stake in Versace [FINalternatives]

Soros, Paulson in Spanish property REIT investments [FT]

TigerGlobal leads investment in OnDeck [HedgeWorld]

PepsiCo rejects Peltz's proposal to split up company [HedgeWorld]

Soros Fund Updates Digital River Position

George Soros' family office Soros Fund Management has updated its stake in Digital River (DRIV).  Per an amended 13G filed with the SEC, Soros Fund has disclosed they own 6.97% of Digital River (DRIV) with over 2.47 million shares. 

This is broken down by 16,050 shares and over 2.46 million shares issuable upon the conversion of 2.00% convertible bonds due November 1, 2030.

At the end of 2013, Soros Fund reported aggregate exposure to over 5.5 million shares, so this appears to be a decrease in aggregate exposure by around 3 million shares.  The filing was required due to activity on March 4th.

Soros Fund also filed a Form 4 with the SEC on DRIV and it indicates they received $153,750,000 plus accrued and unpaid interest on the 2.00% convertible bonds they disposed of.

In other activity, Soros Fund also started a Polycom stake recently.

Per Google Finance, Digital River "provides end-to-end global cloud-commerce, payments and marketing solutions to a wide variety of companies in software, consumer electronics, computer games, video games and other markets. The Company offers its clients a broad range of services that enable them to quickly and cost effectively establish an online sales channel capability and to subsequently manage and grow online sales on a global basis while mitigating risks. The Company is engaged in providing outsourced commerce solutions globally to a variety of companies, primarily in the software and consumer electronics product markets. The Company's services include design, development and hosting of online stores and shopping carts, store merchandising and optimization, order management, denied parties screening, export controls and management, tax compliance and management, fraud management, digital product delivery via download, physical product fulfillment and subscription management."

Tiger Global Raises dELiA*s Stake

Chase Coleman and Feroz Dewan's hedge fund Tiger Global has updated its position in dELiA*s (DLIA).  Per a 13G filed with the SEC, they now own 6.3% of the company with over 4.4 million shares.

This marks an increase of over 1 million shares since the end of 2013.  The filing was made due to activity on February 18th.

They aren't the only hedge fund that's been active in this stock lately, either.  David Gallo's Valinor Management started a DLIA stake recently and Lee Cooperman has owned DLIA as well.

Per Google Finance, dELiA*s is "a retail company comprised of two lifestyle brands primarily targeting teenage girls and young women. The Company generates revenue by selling predominantly to teenage consumers through direct mail catalogs, Websites and retail stores. It operates in dELiA*s brand. Through its e-commerce Webpages, catalogs and retail stores, dELiA*s (the brand) offers a variety of product categories to teenage girls to cater to an entire lifestyle. Through its catalogs and the e-commerce Webpages, it sells many name brand products along with its own brand products in key teenage spending categories. These products include apparel and accessories. Its mall-based dELiA*s specialty retail stores derive revenue primarily from the sale of apparel and accessories and, to a lesser extent, branded apparel to teenage girls. It operates in two segments: direct marketing and retail stores."

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.

Jim Chanos Talks Short Positions at Reuters Summit

At the Reuters Investment Summit, Kynikos Associates founder Jim Chanos talked about his short positions and market outlook.

The hedge fund manager and prominent short seller noted he's betting against coal miners as a proxy for his bet against China.  He thinks we're at the end of a commodities supercycle.  This is not a new view as we've highlighted Chanos' negative view on China before.

Chanos is also short Exxon Mobil (XOM), which he labels a value trap.  He believes the business of integrated oil companies has deteriorated over time.  Chanos also points out that return on capital has dropped from 30% down to 20% at the company.

Turning to technology, the Kynikos founder says that a lot of these companies are in slow decline but are masking it via financial engineering and buybacks.  Last year, Chanos highlighted he was short Hewlett Packard (HPQ).

In general, he feels now is a time for investors to be more cautious as the market's have become more "ebullient."

In terms of best new ideas, Chanos said that in the US he's shorting "conceptual companies, companies playing accounting games." He also said to focus on how the internet's changing business models from payment processors to retailers.


Embedded below is the video of Chanos' interview:

Luxor Capital Files 13D on BJ's Restaurants (BJRI)

Hedge fund Luxor Capital has filed a 13D on shares of BJ's Restaurants (BJRI) indicating they own around 9.7% of the company with over 2.7 million shares.  This is a new position for the hedge fund as they did not report a stake at the end of 2013.

The filing was required due to activity on February 28th and the fine print of the filing indicates they're nominating five individuals to the board of directors.

A recent transaction breakdown shows that Luxor was out buying BJRI shares throughout January between $28.xx and $31.xx.

Per Google Finance, BJ's Restaurants "owns and operates restaurants.  The company's restaurants operate under the BJ's Restaurant & Brewery BJ's Restaurant & Brewhouse, BJ's Pizza & Grill, or BJ's Grill names. The Company's menu features its BJ's deep-dish pizza, its hand-tossed style pizza, its craft beers and other beers, as well as a selection of appetizers, entrees, pastas, sandwiches, specialty salads and desserts, including its Pizookie dessert. The Company's BJ's Restaurant & Brewery restaurants feature on-premise brewing facilities where BJ's craft beers are produced for some of its restaurants."

What We're Reading ~ Analytical Links 3/5/14

The 1-hour China Book: Peking University professors explain China business [Jeff Towson]

Investing's biggest irony: everyone thinks they're a contrarian [Morgan Housel]

Summary of Warren Buffett's long CNBC appearance this week [Brooklyn Investor]

Buffett tells investors to get real about EBITDA [Herb Greenberg]

A new form of shareholder activism gains momentum [Dealbook]

A look at Platform Specialty Products [Seeking Alpha]

The decline of department store sales [USNews]

VRX, ENDP, ACT: Will pharmaceutical roll-ups end badly? [Value Institute]

House with a modified loan is symbol of servicers' tug of war with investors [Dealbook]

You won't have broadband competition without regulation [Reuters]

On Carlos Slim's challenge to his telecom dominance [Economist]

America should make life easier, not harder, for activist investors [Economist]

Digital habits: Nielsen profiles the US consumer [TNooz]

The future of the news business [Marc Andreessen]

How and why to keep a 'commonplace book' [RyanHoliday]

Mason Morfit (ValueAct Capital): Lectures on Activist Investing

Mason Morfit of ValueAct Capital gave three lectures on activist investing a few years ago with Abe Friedman at the Stanford School of Law.  They were a part of the Stanford Rock Center Series on Shareholder Activism: How it began and how it's reshaping today's investment landscape.

The entire videos are below, but here's some takeaways:


- The academic literature on activism only captures the tip of the iceberg of what really goes on behind the scenes

- Morfit and Friedman really push the idea that changes in corporate governance have increased the amount of activism.  They argue that the sector will continue to grow in the future.

- ValueAct did not have its current model of engagement worked out at the beginning in 2000.  Even they floundered around, finding their way.  Morfit's account of ValueAct's interaction with Martha Stewart (lecture 1) and Chiron and Acxiom is entertaining (lecture 3) as Morfit admits various errors.

- In lecture 2, Morfit talks about how a 32-year old can move a room full of experienced managers.  He says that ValueAct tries to bring information into the boardroom.  They've met with everyone in the industry, inside and out.  They've met with customers, suppliers, gone to trade shows, met all the CEOs, weeded through everyone's strategies, and listened to all the conference calls.  He says it's amazing what can happen when you give the board good information as they rarely have this info.


Mason Morfit Lectures on Activist Investing

Lecture 1: Activist Investing: Background, Impact and the Players


Lecture 2: Non-contested Situations in Activism


Lecture 3: Contested Situations: Proxy Fights, PR Wars and Activist Defense




For more on this hedge fund, we've posted ValueAct's recent portfolio activity here.

Nelson Peltz's Trian Partners Trims Wendy's Stake

Nelson Peltz's activist investment firm Trian Partners recently filed a Form 4 with the SEC on shares of Wendy's (WEN).

According to the filing, Trian Fund Management sold 2 million shares of Wendy's (WEN) on February 25th at a price of $10.2.  After the sale, they're still left with over 64.8 million shares.

Per Google Finance, Wendy's is "a quick-service restaurant company in the hamburger sandwich segment. Wendy’s is primarily engaged in the business of operating, developing and franchising a system of distinctive quick-service restaurants serving food."

You can view additional recent activity from Trian here.

Lone Pine Capital Discloses SouFun Holdings Position

Steve Mandel's hedge fund firm Lone Pine Capital just disclosed an updated stake in SouFun Holdings (SFUN).  Per a 13G filed with the SEC, Lone Pine now owns 6.4% of the company with over 3.6 million shares.

At the end of 2013, Lone Pine owned 45,000 call options on SFUN, but didn't own any common stock at that time.  The latest filing was made due to activity on February 21st.

The brand new issue of our Hedge Fund Wisdom publication highlighted a few weeks ago that Passport Capital owns a sizable stake in this name as well.

Per Google Finance, SouFun "operates as a real estate Internet portal in China. The Company also operates home furnishing and improvement Websites. Through SouFun's Websites, it provides marketing, e-commerce, listing, and other value-added services for China's real estate and home-related sectors. SouFun's Internet portal focuses and supports SouFun's users in seeking information on the real estate and home-related sectors in China. SouFun maintains about 100 offices to focus on local market needs and its Website and database contains real estate related content covering more than 320 cities in China. Its www.soufun.com Website contains links to other specialized real estate and home furnishing and improvement Websites, including its www.jiatx.com Website, its e-commerce transaction and payment platform."

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

Tybourne Capital Raises Autohome Stake

Eashwar Krishnan's hedge fund firm Tybourne Capital just filed a 13G with the SEC regarding its stake in Autohome (ATHM).  Per the filing, Tybourne now owns 5.3% of ATHM with over 1.9 million shares.

This is an increase of over 450,000 shares since the end of 2013.  The filing was required due to activity on February 14th.

Prior to founding Tybourne, Krishnan worked at Lone Pine Capital.  You can view some additional recent portfolio activity from Tybourne here.

Per Google Finance, Autohome is "an online destination for automobile consumers in China. Through its two Websites, autohome.com.cn and che168.com, the Company delivers content to automobile buyers and owners. The Company's Content includes professionally produced content, user generated content, automobile library and automobile listing information. The Company generates revenues from online advertising services and dealer subscription services."

Contrarian: Documentary About John Templeton

Below is an interesting documentary on well known investor John Templeton.  "Contrarian" follows his life and legacy.  It was directed by Mary Mazzio and underwritten by the John Templeton Foundation.

Embedded below is the documentary, Contrarian:

Warren Buffett's 2013 Annual Letter

It's that time of year again: Warren Buffett this weekend released his 2013 annual letter.  The Berkshire Hathaway man provides an update on operations but also offers pearls of investing wisdom.

One of the more insightful parts of his letter is a story he tells about a farm he bought a long time ago.  He compares owning a farm to the stock market by imagining a scenario where a neighboring farmer comes over everyday and offers him a price for his farm and Buffett's farm.

Buffett basically notes that this is the reality of the stock market: someone's throwing a price in your face every single day.  But with the farm, you aren't tempted with such regularity.  So to stay the course in a long-term investment, you have to tune out the noise.

Embedded below is Warren Buffett's annual letter for 2013:




You can download a .pdf copy here.

For more from the Oracle of Omaha, head to Warren Buffett's recommended reading list as well as Buffett and Munger's secrets to investing success.

Bruce Berkowitz's Letter to Fannie Mae & Freddie Mac

Bruce Berkowitz's investment firm Fairholme Capital today released a letter to Fannie Mae and Freddie Mac requesting corporate governance actions.

Fairholme owns various preferred securities of both Fannie and Freddie and has asked them to basically preserve the companies' assets while working to rebuild capital.  Fairholme also wants the companies to hold annual shareholder meetings and to re-list on the NYSE.

Embedded below is Berkowitz's letter to Fannie and Freddie:




You can download a .pdf copy here.

ValueAct Capital Boosts Dresser-Rand Stake, Files 13D

Jeff Ubben's hedge fund firm ValueAct Capital filed a 13D with the SEC regarding its stake in Dresser-Rand Group (DRC).  Per the filing, ValueAct now owns 6.6% of DRC with over 5 million shares.

This is a sizable increase as they only owned around 650,000 shares at the end of 2013.  The filing was required due to activity on February 18th, but they've been buying throughout January and February, at prices ranging from $53.xx to $57.05.  DRC currently trades around $57.xx.

Though this is an activist 13D filing, they didn't outline any specific plans and the filing contains the standard boilerplate.

Per Google Finance, Dresser-Rand Group is " a global supplier of of custom-engineered rotating equipment solutions for long-life, critical applications in the oil, gas, chemical, petrochemical, process, power generation, military and other industries worldwide. It has two segments: new units and aftermarket parts. New units are predominately engineered solutions to new requests from clients. Aftermarket parts and services consist of support solutions for the existing population of installed equipment and the operation and maintenance of several types of energy plants. Its rotating equipment is also supplied to the environmental solutions market space within energy infrastructure. It designs, manufactures and markets engineered rotating equipment and provide services to the worldwide oil, gas, petrochemical, power generation, environmental solutions and industrial process industries."

What We're Reading ~ Hedge Fund Links 2/28/14

Best ideas from the Harbor Conference: Kingdon, Locust Wood, Blackstone [Street]

New hedge funds move away from monthly liquidity in 2013 [HedgeWeek]

George Soros considers investing in European banks [HedgeWorld]

Ackman talks Herbalife, P&G, Target, and Air Products [CNBC]

Steve Mandel tops best-earning hedge funds for clients in 2013 [Bloomberg]

Hedge funds wrestle with employee personal account trading conflicts [Forbes]

With ban on ads removed, hedge funds test waters [Dealbook]

Funds look to hire PR heads [CNBC]

Investor pushes to block Red Lobster spinoff [Dealbook]

Carl Icahn's various letters to eBay [Shareholders' Square Table]

Why Sam Zell loves Mexico [UTSanDiego]

The hedge fund report card [II Alpha]

Blackstone buys minority stake in hf Senator [Bloomberg]

Third Point Seeks Sotheby's Board Seats

Dan Loeb's hedge fund firm Third Point revealed in an amended 13D filing that they're seeking 3 board seats at Sotheby's (BID).  You'll recall that Third Point initiated an activist stake in BID last year and pushed for corporate change. Third Point now owns over 9.5% of the company with 6.55 million shares.

While they're pleased the company announced it will return $450 million to shareholders via buyback and dividends, Loeb seeks to nominate himself, Harry Wilson, and Olivier Reza to the board.

The company has agreed that Loeb would be an "appropriate member" but Third Point also wants more representation.  Third Point also outlined other thoughts on the company which you can read here.

Other activists have also been involved in this stock, including Mick McGuire's Marcato Capital Management.

If you want to play catch up on the thesis, we analyzed Sotheby's in the Q3 2013 issue of our Hedge Fund Wisdom premium publication (not to mention, a brand new issue was just released).

JANA Partners Files 13D on URS

Barry Rosenstein's hedge fund firm JANA Partners has filed a 13D with the SEC regarding its stake in URS (URS).  Per the filing, JANA now owns 9.7% of URS with 7.28 million shares.

This is a net increase of only 105,300 shares since the end of 2013.  The filing was required due to activity on February 17th.

The main reason they filed the 13D, of course, was to disclose their activist investing intentions.  They have decided to meet with management to talk about the board of directors, capital structure, corporate structure and "other matters impacting shareholder value creation." 

JANA has requested the company delay the deadline to nominate board members.

Per Google Finance, URS is "a provider of engineering, construction and technical services. The Company offers a range of program management, planning, design, engineering, construction and construction management, operations and maintenance, and decommissioning and closure services to public agencies and private sector clients worldwide. It provides its services through four reporting segments: Infrastructure & Environment, Federal Services, Energy & Construction, and Oil & Gas Divisions. URS also is a United States federal government contractor in the areas of systems engineering and technical assistance, operations and maintenance, and information technology (IT) services. It provides services for federal, oil and gas, infrastructure, power, and industrial projects and programs."

For more from this hedge fund, head to some of JANA's other recent portfolio activity.

Senator Investment Group Starts Brookdale Senior Living Position

Alex Klabin and Doug Silverman's hedge fund firm Senator Investment Group has filed a 13G with the SEC on shares of Brookdale Senior Living (BKD). 

This is a newly disclosed equity stake for Senator and they now own 5% of the company with over 6.2 million shares.  The filing was made due to activity on February 24th.

Per Google Finance, Brookdale Senior Living is "an owner and operator of senior living communities throughout the United States."

For more from this hedge fund, we recently posted up Senator's thesis on Air Products & Chemicals (Q4 letter) and detailed some of their other recent portfolio activity here.

Valinor Boosts dELiA's Stake, Nominates Board Member: 13D Filing

David Gallo's hedge fund firm Valinor Management has just revealed an increased stake in dELiA's (DLIA).  Per a Form 3 and a 13D filed with the SEC, Valinor has revealed they own 18.7% of the company with aggregate exposure to over 14.3 million shares.

The Form 3 outlines that they own over 10.7 million shares of common stock.  They also own over 13.1 million shares worth of Series B convertible preferred stock as well.  The filings were made due to activity on February 18th and we flagged Valinor's original purchase of DLIA late last year. 

Valinor has also nominated Seth Cohen to the company's board of directors.  Prior to founding Valinor, Gallo worked at Roberto Mignone's Bridger Capital.

Numerous other hedge fund managers have been involved in this name as Lee Cooperman also reported a DLIA stake in November.  Whitney Tilson's Kase Capital had also previously been a big proponent of shares, but per his recent 13F filing, it looks like he exited the position in the fourth quarter of 2013.

Per Google Finance, dELiAs is "a retail company comprised of two lifestyle brands primarily targeting teenage girls and young women. The Company generates revenue by selling predominantly to teenage consumers through direct mail catalogs, Websites and retail stores. It operates in dELiA*s brand. Through its e-commerce Webpages, catalogs and retail stores, dELiA*s (the brand) offers a variety of product categories to teenage girls to cater to an entire lifestyle. Through its catalogs and the e-commerce Webpages, it sells many name brand products along with its own brand products in key teenage spending categories. These products include apparel and accessories. Its mall-based dELiA*s specialty retail stores derive revenue primarily from the sale of apparel and accessories and, to a lesser extent, branded apparel to teenage girls. It operates in two segments: direct marketing and retail stores." 

Berkshire Hathaway Adds to DaVita Stake Again

In what has become a bit of a routine occurrence, Berkshire Hathaway has been out buying even more shares of DaVita (DVA) recently.  Per a Form 4 filed with the SEC, Warren Buffett's company has acquired over 1.1 million shares of DVA.

Berkshire acquired shares at weighted average prices ranging from $66.12 to $68.00 between February 24th and 26th.  After these purchases, Berkshire now owns over 37.6 million shares.

As we've highlighted in our premium publication Hedge Fund Wisdom (new issue just released),  this big stake is most likely attributed to Ted Weschler, one of Berkshire's newer portfolio managers.  DVA was one of Weschler's top holdings at his hedge fund before he joined Buffett's team.

Per Google Finance, DaVita is "a provider of dialysis services in the United States for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD)." 

If you haven't seen it, be sure to check out Warren Buffett's recommended reading list.

Elliott Management Discloses F&C Asset Management and Alliance Trust Stakes

Paul Singer’s Elliott Capital Advisors activist hedge fund has made two new disclosures in London recently.  


F&C Asset Management Stake

Elliott started a new position in F&C Asset Management (LON:FCAM) with an 11% stake. Half of the holding is held via contract for difference (CFD) / derivatives.  F&C Asset Management has recently received a takeover offer from the Bank of Montreal. 

Per Google Finance “F&C Asset Management plc (F&C) is an asset management company.   The Company operates in three segments: F&C, F&C REIT and Thames River Capital (TRC). The   Company’s clients are insurance companies, institutional, retail and wholesale investors. The   Company manages portfolios across multiple asset classes on behalf of a range of clients including   insurance funds, pension schemes, public authorities and charities as well as private individuals   through savings schemes, investment trusts and mutual funds.”  


Alliance Trust Position

Elliott also added to its stake in London listed Alliance Trust (LON: ATST), taking its holding from 5% of voting rights to 10.02%. 

Per Google Finance – “Alliance Trust PLC is a self-managed investment trust. The Company’s   objective is to be a core investment for investors seeking increasing value over the long-term. The Company pursues its objective by investing in both quoted and unquoted equities in different sectors and industries; investing internationally in fixed income securities; investing in other asset classes and financial instruments, either directly or through investment vehicles, and investing in subsidiaries and associated businesses.”

What We're Reading ~ Analytical Links 2/26/14

Excerpts from Warren Buffett's upcoming annual letter [Fortune]

A look at 2014's best online brokers [Stockbrokers]

On adapting as an investor [ReformedBroker]

Is value investing bred in the bone? [WSJ]

Don't fall in love with your stocks [Marketwatch]

On the MBA vs CFA debate [CNBC]

A pitch on Discovery Communications [SumZero]

American shoppers are making a giant shift to dollar stores [QZ]

Vodafone cable deals interest complicates possibility of AT&T deal [WSJ]

The internet is F'd [The Verge]

Social advertising economics [Morally Bankrupt]

On what Facebook's acquisition of Whatsapp really means [Benedict Evans]

A look at Spirit Airlines [NPR]

A conversation about young Wall Streeters [Dealbook]

Gross vs El-Erian: inside the showdown atop the world's biggest bond firm [WSJ]

Lee Cooperman Ramps Up Chimera Position

Lee Cooperman of Omega Advisors has filed a 13D with the SEC regarding shares of Chimera Investment Corp (CIM).  Per the filing, Cooperman now owns 7.6% of the company with over 77.8 million shares.

This marks a sizable increase of over 62.1 million shares since the end of 2013 when he only owned 15.7 million shares.  The filing was required due to activity on February 24th.

The activist filing indicates Cooperman has met with management and talked with them "regarding the Issuer’s operations, business, strategies and strategic direction. These discussions have reviewed, and may continue to review, options for enhancing shareholder value through various strategic alternatives, improving the Issuer’s operational and financial execution, and general corporate matters."

Per Google Finance, Chimera Investment Corp is "a specialty finance company that invests, either directly or indirectly through its subsidiaries, in residential mortgage-backed securities (RMBS), residential mortgage loans, commercial mortgage loans, real estate-related securities and various other asset classes. The Company is managed by Fixed Income Discount Advisory Company (FIDAC), an investment advisor registered with the Securities and Exchange Commission (SEC)."

For more on this manager, check out some of Lee Cooperman's other recent portfolio activity here.

JANA Partners Updates QEP Resources Stake

Barry Rosenstein's activist hedge fund JANA Partners has filed an amended 13D with the SEC updating their stake in QEP Resources (QEP).  Per the filing, JANA now owns 9.4% of QEP with over 16.875 million shares.

This means they've increased their stake by around 3 million shares in January.  At the same time, they also indicated they trimmed their stake ever-so-slightly more recently (from 16.9 down to 16.8 million shares).  We highlighted when JANA first went activist on QEP back in October of 2013.

JANA also entered an agreement with the company where William Thacker joined the board and will serve until QEP separates its midstream business.

Per Google Finance, QEP Resources is "a holding company. The Company 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."

For more on this hedge fund we've posted up JANA's thesis on Equinix from their Q4 letter.

New Q4 Issue of Hedge Fund Wisdom Now Available

The brand new Q4 issue of our premium publication, Hedge Fund Wisdom, is now available.  Subscribers please login at www.hedgefundwisdom.com to download it.


Inside The New Issue

- Brand new consensus buy/sell section: Top 5 buys, top 5 sells, top 5 additions, top 5 reductions.  Each list shows the most popular stocks among hedgies and provides commentary on the action.

- The latest portfolios of 25 top hedge funds:  See the latest positions from Seth Klarman, David Tepper, John Paulson, Larry Robbins, and many more.

- Expert commentary on each fund's moves:  We put each fund's activity into historical context (after all, we've been tracking these funds for over 6 years)

- Equity analysis of 3 stocks hedgies have been buying:  See the bull and bear case on stocks that hedge funds are betting on

- 1 convenient document:  All the latest hedge fund data aggregated to save you time


Want to see what you've been missing?  Here's a free sample of a full past issue.


See What Hedge Funds Have Been Buying, Subscribe Below


1 Year Subscription (4 issues, save 20% with this option): $299.99 per year

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Want to pay by check or soft dollar account?  Email us: info@hedgefundwisdom.com

What We're Reading ~ Hedge Fund Links 2/14/14

Hedge fund masters [Ari Kiev]

And the world's most successful hedge fund manager is... [CNBC]

Kynikos suffers 14% drop in 2013 [FINalternatives]

Greenlight sues website over Micron disclosure [ValueWalk]

Who would be on the Mount Rushmore of the hedge fund industry? [Research Puzzle]

Evaluating the dearth of female hedge fund managers [Dealbook]

Brevan Howard said to shut emerging market fund [Dealbook]

Tiger Global raises new VC fund [Fortune]

Blackstone nets $1.4bn for hedge fund stakes [FINalternatives]

What We're Reading ~ Analytical Links 2/12/14

The single best metric: EV/EBITDA [Crossing Wall Street]

Why margin debt matters [Seeking Alpha]

What I learned at the mall about investing [Institutional Investor]

Half of Americans can't raise $2k in 30 days [Time]

Get ready for a long proxy fight over Time Warner Cable [Dealbook]

John Maynard Keynes' own portfolio not too dismal [NYTimes]

Don't believe the tech bubble hype [Andreessen Horowitz]

US switching from credit card signatures to PINs, but banks need to get on board [Verge]

Investor group targets Ocwen's mortgage servicing practices [FT]

Microsoft's mobile muddle [Stratechery]

Two notable mutual fund trends [AAII]

Why ADT is appalling [Herb Greenberg]

How Mulberry got squashed in fashion's squeezed middle [The Guardian]

Coca Cola: glass less than half full [FT]

On an upturn in capital spending [FT]

Lee Ainslie Interview: Columbia Business School's Graham & Doddsville

Columbia Business School is out with the Winter 2014 issue of its Graham & Doddsville investment newsletter.  This time, they feature a rare interview with Maverick Capital's Lee Ainslie.

The hedge fund manager talked about how he's always trying to learn new things and how he's read every investing book he can get his hands on (if you need some ideas, check out all our recommended reading lists in the right-hand column on the site).


Some interesting quotes from the interview:


On portfolio positioning: "In terms of sizing, our average long is roughly twice the size of an average short at Maverick and our long portfolio is more concentrated than our short portfolio.  This construction allows us to maintain net long exposure typically between 30% and 60%.  The greater diversification of our short portfolio reflects the riskier nature of these investments and that these positions turn over more frequently, so having a deeper bench of such investments is helpful."


On valuation:  "So while we place great emphasis on valuation in our investment decisions, valuation alone should never be the driver of either a long or a short investment ... I believe it is important to identify a catalyst that should benefit the valuation ... The most commonly used valuation metric at Maverick is sustainable free cash flow in comparison to enterprise value."


On what he looks for in deep dives: "The most critical factor that we're trying to evaluate is the quality of management - their intelligence, competitiveness and, most importantly, their desire to create shareholder value."


On what he looks for when hiring: "The most important components we gauge include competitiveness, mental flexibility and emotional consistency - that last trait is surprisingly important."  These are pretty similar to what Julian Robertson looked for when he was hiring or seeding funds.



This issue also highlights talks with Jim Grant of Grant's Interest Rate Observer, Dr. Kenneth Shubin Stein of Spencer Capital and Geoffrey Batt of Euphrates Iraq Fund

Embedded below is Columbia Business School's latest Graham & Doddsville newsletter:




You can download a .pdf copy here.

For past great issues of this newsletter, check out their interview with JANA Partners as well as one interviewing Li Lu.

Coatue Management Dumps Longstanding Equinix Position

Philippe Laffont's hedge fund Coatue Management has just filed an amended 13G with the SEC regarding Equinix (EQIX).  The filing indicates that they no longer own a position in the company as of December 31st, 2013.

This is significant news when you consider EQIX had been one of Coatue's top holdings for quite some time.  At the end of the third quarter, they owned a stake worth over $820 million and so they liquidated their stake during the fourth quarter when shares traded between $152 and $185.

Earlier, we also pointed out JANA Partners' thesis on EQIX as they have built up a stake in the company throughout 2013.

JANA Partners' Thesis on Equinix: Q4 Letter

Barry Rosenstein's hedge fund JANA Partners returned 20.4% in 2013 and their Q4 letter details some of their activity before year-end.  They note that they've exited their activist stake in Agrium (AGU) and have started stakes in Equinix (EQIX), Juniper Networks (JNPR), and Airbus Group (AIR FP), among other names.


JANA Partners' Thesis on Equinix (EQIX)

JANA writes in its Q4 letter:

"EQIX is the market leader in low latency, network dense co-location data  centers. We have been following EQIX as a member of our “JANA Universe” for the last couple  of years, and we have waited patiently for an opportunity to buy at an attractive price. We started  building our position late in the second quarter and continued to purchase the shares in the third  and fourth quarters. We believe there is a wide moat around the specialized services that EQIX  provides, even though over-capacity in the lower value added wholesale segment of the data  center market has pressured the revenue growth rate and has completely altered investor  perception of the quality of EQIX’s franchise. We take comfort in the fact that 95% of revenue is  recurring monthly, and churn is less than 10% per year. EQIX has not had a down quarter year  over year in the last seven years in terms of revenue or OIBDA. In fact, both revenue and  OIBDA have grown in excess of 10% every year. Profitability is robust: OIBDA margins are  45% and FCF margins are 25%. Overall returns on invested capital are still low, a result of the  heavy investment in growth; but four wall returns are compelling, we estimate at 25%+ after tax,  and we pencil incremental returns on capital to be greater than 15%. CEO Steve Smith and CFO  Keith Taylor have been together at the company for six years and have managed through a similar  period of a slowdown in growth in the third quarter of 2010. Then, as now, investor confidence  was shattered by the slowdown, and to capitalize on the misplaced pessimism, then as now,  management announced a share repurchase program. In 2010 the repurchase announcement  turned out to be the absolute bottom as the stock went on to triple over the next three years.  While we have great hopes for EQIX, we do not expect a similar outcome this time around, but at  the current valuation of 12x our estimate of FCF (adjusted for growth capex) for 2014, we believe  even a modest acceleration in growth trends will be amplified dramatically in the stock price. We  also expect that EQIX will be granted a PLR by the IRS to convert to a REIT, which will yield  substantial tax savings."

*Update: An earlier version of this article stated that Coatue Management had been a large shareholder as well.  However, they literally just filed an amended 13G with the SEC and have indicated that they no longer own any EQIX shares as of the end of 2013.

Other hedge funds that have held positions in EQIX recently include Lone Pine, Paulson & Co, Senator, and Hoplite, among others.

EQIX shares sold off heavily during 2013, trading around $231 in Q2 and trading as low as $152 in Q4 and obviously JANA has taken advantage of the sell-off to build a position.  EQIX has rallied off the lows and now trades at $190, a level it was trading at in Q2 of 2013.

Check out past activity from JANA Partners here.

Pershing Square Sells General Growth Properties Stake to Company

Bill Ackman's hedge fund Pershing Square Capital Management has finally sold the rest of its longstanding position in General Growth Properties (GGP). 

The company has announced that it acquired the shares from Pershing for around $556 million (around 27.6 million shares at a price of $20.12).

As detailed in our Hedge Fund Wisdom newsletter last year, Pershing Square had already sold almost half of its GGP stake in the third quarter.  And now the fund is completely out of the position as they've also sold their warrants in the company to Brookfield Asset Management, the company's largest shareholder.

This has been one of Ackman's most successful investments ever, as he purchased shares below $1 a share.

Per Google Finance, General Growth Properties is "a real estate investment trust (REIT). The Company owns or with joint venture partners 144 regional malls (126 domestic and 18 in Brazil) consists of approximately 135 million square feet. The Company is engaged in ownership, operation, management and selective re-development of its Consolidated Properties and Unconsolidated Properties, which are primarily regional malls."

For more on Pershing, we've also highlighted that they recently trimmed their Beam position and have disclosed a Platform Specialty Products stake.

Lee Cooperman Adds to New Residential Investment Corp Stake

Lee Cooperman's Omega Advisors has filed a 13G with the SEC regarding a 6% ownership stake in New Residential Investment (NRZ) with over 15.2 million shares. 

This marks an increase in their position size of over 9.5 million shares since the end of the third quarter.  The filing was required due to activity on January 30th.

NRZ was spun off from Newcastle Investment Corp (NCT), a position Cooperman also owns, back in May of 2013.

Per Google Finance, New Residential Investment Corp is "incorporated on September 26, 2013, is a real estate investment trust. The Company focuses on investing in, and actively managing, investments related to residential real estate. The Company is managed by an affiliate of Fortress Investment Group LLC, a global investment management. The Company primarily target investments in excess mortgage servicing rights, residential mortgage backed securities, residential mortgage loans and other related investments."

You can view other portfolio activity from Lee Cooperman here.

Joel Ramin's 12 West Capital Starts Zulily Position

Joel Ramin's hedge fund 12 West Capital has disclosed a new position in Zulily (ZU) per a 13G filed with the SEC.  The hedge fund now owns 5.6% of ZU with 735,804 shares.  The filing was made due to activity on January 31st.

12 West isn't the only hedge fund involved here as we've detailed how Blue Ridge Capital reported a Zulily stake as well.

Per Google Finance, Zulily is "an e-commerce company. The Company, through its desktop and mobile Websites and mobile applications, which it refers to as its sites, helps its customers discover new and unique products. The Company provides moms with a selection of over 4,500 product styles offered on a typical day through various flash sales events, which are limited-time curated online sales of selected products launched each day on its sites. The Company offers merchandise primarily targeted at moms purchasing for their children, themselves and their homes. Its merchandise includes children’s apparel, women’s apparel, and other product categories, such as toys, infant gear, kitchen accessories and home decor The Company sources its merchandise from thousands of vendors, including emerging brands and smaller boutique vendors, as well as larger national brands.The Company offers merchandise primarily targeted at moms purchasing for their children, themselves and their homes."

You can view past portfolio activity from 12 West Capital here.

Jeff Saut on Richard Russell's "Rich Man, Poor Man"

Market strategist Jeff Saut has published his weekly market commentary and this time around he recites the "Rich Man, Poor Man" story from Richard Russell about how making simple decisions is the path to prosperity.

Saut himself adds,

"In the world we live in, few look at risk.  Most only look at reward.  The few who do look at risk (the educated, the street savvy) make their money at the expense of the great unwashed majority who swallow the noise nonsense about getting rich quick.  Investing is a get rich slowly process.  You have to put your money at risk in the face of uncertainty.  Emotions run rampant before the uncertainty of floating, fluctuating, often violent and volatile markets."

Embedded below is Jeff Saut's weekly market commentary: "Rich Man, Poor Man!"




You can download a .pdf copy here.

For more from Saut, head to 6 themes for investing in a slow growth environment.

Lone Pine Capital Starts Position In LPL Financial Holdings

Steve Mandel's hedge fund firm Lone Pine Capital has filed a 13G with the SEC disclosing a new position in LPL Financial Holdings (LPLA).  Per the filing, Lone Pine now owns 6.4% of the company with over 6.5 million shares.  The filing was required due to activity on January 28th.

Per Google Finance, LPL Financial Holdings is "formerly LPL Investment Holdings Inc., is a holding company. The Company provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions (collectively advisors) in the United States of America. Through its custody and clearing platform, the Company provides access to diversified financial products and services enabling its advisors to offer independent financial advice and brokerage services to retail investors (clients)."

View additional recent portfolio activity from Lone Pine Capital here.

Oaktree Capital Updates Stakes in Masonite, NewPage Holdings & Capital Product Partners

Howard Marks' investment firm Oaktree Capital has filed a slew of amended 13G's with the SEC detailing some of their recent portfolio changes.


Masonite (DOOR)

Their first 13G discloses a 17.9% ownership stake in Masonite (DOOR) with over 5.35 million shares.  This is an increase of over half a million shares since their last disclosure at the end of the third quarter.  The filing was required due to activity on December 31st.

Per Google Finance, Masonite is "designer and manufacturer of interior and exterior doors for the residential new construction; the residential repair, renovation and remodeling, and the non-residential building construction markets. The Company principally operates in North America; Europe, Asia and Latin America, and Africa. The Company markets and sells its products to remodeling contractors, builders, homeowners, retailers, dealers, lumberyards, commercial and general contractors and architects through wholesale and retail distribution channels. Its portfolio of brands includes Masonite, Marshfield, Premdor, Mohawk, Megantic, Algoma, Baillargeon, Birchwood Best and Lemieux."


Capital Product Partners (CPLP)

Oaktree's second filing shows their ownership stake in Capital Products Partners (CPLP) is now 6.9% with over 5 million shares.  This is an increase of over 4.1 million shares since their last disclosure at the end of the third quarter.  The filing notes the activity was on December 31st.

Per Google Finance, Capital Product Partners is "an international tanker company. The Company is engaged the seaborne transportation services of crude oil and refined petroleum products, edible oils and soft chemicals, by chartering its vessels under medium to long-term time and bareboat charters."


NewPage Holdings

Last, the firm also disclosed a 19.4% ownership stake in NewPage with over 1.3 million shares.  The filing was made due to activity on December 31st.  We highlighted Oaktree's original NewPage disclosure back in October.

Per Google Finance, NewPage Group is: "After struggling through several financially challenging years for the coated paper making industry, NewPage would like to do just that, turn over a new page. Through subsidiary NewPage Corp., the company is one of the largest makers of coated and specialty paper in North America. From mills in the Eastern and Midwestern US, NewPage churns out about 3.5 million tons of paper annually. Its papers are often used to produce annual reports, magazines, and catalogs. Customers include xpedx, Advance Magazine Publishers (dba Condé Nast), McGraw-Hill, Time Inc., and Avery Dennison. NewPage Corp. filed for Chapter 11 bankruptcy in late 2011." 

For more from this investment firm, head to Howard Marks' letter on the role of luck in investing.