Marcato Capital Sends Letter to Life Time Fitness, Proposes Separation of Real Estate Assets

Mick McGuire's activist hedge fund firm Marcato Capital recently filed an amended 13D with the SEC regarding their position in Life Time Fitness (LTM).  Per the filing, Marcato continues to own 8% of the company with approximately 3.1 million shares.

Marcato's filing includes a letter to Life Time's Chairman commending the company for exploring a potential REIT conversion.

McGuire writes, "In our opinion, many investors and analysts do not fully appreciate the transformational nature of the Company's announcement.  Based on Marcato's analysis, at the mid-point of our valuation range, we believe the shares of LTM could reach $70 per share upon separation of the Company's real estate assets."

We had previously highlighted how Marcato increased its Life Time Fitness stake this summer and now they're taking things a step further.

Embedded below is the full letter to the board as well as Marcato's presentation on valuation:

David Tepper: Beginning of the End of the Bond Market Bubble

Bloomberg today featured an interesting comment from Appaloosa Management's David Tepper.  The hedge fund manager basically said that the ECB decision means the "beginning of the end" of the bond market bubble.

And while he didn't specifically reveal his positioning, host Stephanie Ruhle says that Tepper expressed that's he's pretty adamant about his statement and so it's pretty easy to guess his positioning based upon that (short bonds).

Embedded below is the video of Tepper's full quote via Bloomberg:

Howard Marks' New Memo: Risk Revisited

Oaktree Capital's Chairman Howard Marks is out with his latest memo entitled 'Risk Revisited.'  Warren Buffett has said he always looks forward to reading Marks' memos and if that's not enough of an endorsement, we don't know what is.

In his latest piece, Marks draws attention to a few key points he wants to make:

1.  "The future should be viewed not as a fixed outcome that's destined to happen and capable of being predicted, but as a range of possibilities and, hopefully on the basis of insight into their respective likelihoods, as a probability of distributions."

2. "Risk means more things can happen than will happen."

3.  "Knowing the probabilities doesn't mean you know what's going to happen."

4.  "Even though many things can happen, only one will."

His memo then goes on to outline all the various types of risks and we recommend you read it in its entirety as it is quite thorough.

He ends his latest missive by noting that investing can be like playing offense and defense and that today he's paying more attention to loss prevention than the pursuit of gain.


Embedded below is Howard Marks' latest memo, 'Risk Revisited':



You can download a .pdf here.

For more investing wisdom from this manager, be sure to check out Marks' book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor.

JAT Capital Increases Madison Square Garden Stake

In an amended 13D filed with the SEC, John Thaler's hedge fund firm JAT Capital has revealed they now own 7.75% of Madison Square Garden (MSG) with over 4.93 million shares.

This is up from their previous stake of 4.28 million shares when we previously highlighted JAT's activist MSG stake.  The filing was due to activity on August 29th and they used proceeds from outstanding swaps to purchase 3.45 million shares and call options to purchase 1.47 million shares.

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.."

Eminence Capital Boosts Zynga Position

Ricky Sandler's hedge fund firm Eminence Capital has filed a 13G with the SEC regarding their position in Zynga (ZNGA).  Per the filing, Eminence now owns 5.1% of the company with over 38 million shares.

This means they've boosted their share count by over 11.5 million since the end of the second quarter.  The filing was required due to activity on August 21st.

In other activity from this fund, we recently highlighted how Eminence started a World Wrestling Entertainment stake as well.

Per Google Finance, Zynga is "the provider of social game services. The Company develops , market and operates online social games as live services played over the Internet and on social networking sites and mobile platforms. The Company's games are accessible on Facebook and other social networks, mobile platforms and Zynga.com."

What We're Reading ~ Hedge Fund Links 8/29/14

Hedge funds hunt for clues in Treasury tax inversion limit [Bloomberg]

The best short seller you've never heard of [HFIntelligence]

Why you should avoid the hottest hedge fund hands [CNBC]

Investor satisfaction with hedge funds falls [FINalternatives]

Big funds continue to bring in the big money [Bloomberg]

Dan Loeb's comments on ThirdPointRe's call [Seeking Alpha]

David Einhorn's comments on GreenlightCapitalRe's call [Seeking Alpha]

Morgan Creek's Mark Yusko sees opportunity in Saudi Arabia [FINalternatives]

The hedge fund and the despot [Business Week]

What We're Reading ~ Analytical Links 8/27/14

Profile of Alibaba's Joseph Tsai [Bloomberg]

Carol Loomis' latest on BlackRock: the $4.3 trillion force [Fortune]

Profile of 108 year old investor Irving Kahn [Telegraph]

Lessons learned in 30 years of investing [What Works on Wall Street]

Share sleuth's investment checklist [Interactive Investor]

A look at Post Holdings [View From the Blue Ridge]

A look at WL Ross Holding Corp [Brooklyn Investor]

What makes Warren Buffett a great investor? [Farnam Street]

Amazon: not an e-commerce company [Stratechery]

The inside story of how Netflix came to pay Comcast for traffic [Quartz]

Morningstar: a force to be reckoned with [FT]

Nonprofit hospitals' earnings fall as costs outrun revenue [WSJ]

Interview with Burger King's CEO [Financial Post]

The company speeding a genetic revolution [Forbes]

Google's valuation: much cheaper now than 10 years ago [WSJ]

Family Dollar bidding war suggests 'peak dollar store' is here [Yahoo]

Match.com might not light IAC's fire [WSJ]

Peculiar habits of incredibly successful people [Morgan Housel]

Interview with venture capitalist Bill Gurley [Forbes]

Glenview Capital Boosts VCA (WOOF) Stake

Larry Robbins' hedge fund firm Glenview Capital has filed an amended 13G with the SEC regarding their stake in Vca (WOOF).  Per the filing, Glenview now owns 14.85% of the company with over 12.8 million shares.

This means they've boosted their position size by over 4 million shares since the end of the second quarter.  The filing was made due to activity on August 21st and it notes that their ownership includes 4,114,200 shares that are obtainable upon exercise of options.

To see the rest of Glenview's portfolio, head to the brand new edition of Hedge Fund Wisdom.

Per Google Finance, VCA is "a national animal healthcare company operating in the United States and Canada. The Company provides veterinary services and diagnostic testing to support veterinary cares. The Company operates in two segments: animal hospital and laboratory. Its all other category includes Vetstreet and Medical Technology operating segments. The Company sells diagnostic imaging equipment and other medical technology products and related services to the veterinary markets. The Company's animal hospitals offer a range of general medical and surgical services for companion animals, as well as specialized treatments, including advanced diagnostic services, internal medicine, oncology, ophthalmology, dermatology and cardiology. In August 2014, VCA, Inc acquired Camp Bow Wow."

Bridger Capital Raises Tornier Stake

Roberto Mignone's hedge fund firm Bridger Capital has filed a 13G with the SEC regarding their position in Tornier N.V. (TRNX).  Bridger has disclosed they now own 5.5% of the company with almost 2.7 million shares.

This means they've added to their share count by 707,960 shares since the end of Q2.  The filing was made due to activity on August 6th.

To see what else Bridger has invested in, check out the new issue of our newsletter.

Per Google Finance, Tornier is "a global medical device company focused on surgeons that treat musculoskeletal injuries and disorders of the shoulder, elbow, wrist, hand, ankle and foot. Tornier refers to these surgeons as extremity specialists. The Company sells to this extremity specialist customer base a broad line of joint replacement, trauma, sports medicine and biologic products to treat extremity joints. In certain international markets, it also offers joint replacement products for the hip and knee. The Company sells over approximately 100 product lines in approximately 40 countries. The Company’s principal products are organized in four categories: upper extremity joints and trauma, lower extremity joints and trauma, sports medicine and biologics, and large joints and other. The Company’s geographic regions consist of the United States, France and other areas."

Maverick Capital Discloses Pets at Home Group Position

Lee Ainslie's hedge fund Maverick Capital has disclosed a new holding in London listed Pets at Home Group (LON:PETS).  Due to trading on July 29th, Maverick now own the equivalent of 3.14% of voting rights, all via a total return swap.

Pets at Home was floated in March at 245p per share.  It looks as though Maverick might have bought their shares somewhere around 175p.

To see what else Maverick has been buying, check out our just released Hedge Fund Wisdom newsletter.

Per Google Finance, Pets at Home is "a specialist retailer of pet food, pet-related products and pet accessories. The Company also operates a small animal veterinary business by combined number of surgeries both in its stores and at standalone sites and is a joint venture operator in the market. The Company is an operator by number of salons of pet grooming services offered through Pets at Home’s in store salons. The Company’s product range consists of two product groups: pet food and pet accessories, which are complemented by services, including veterinary services (both in stores and on a standalone basis) and in store Groom Room grooming services. In addition, the Company also offers pet insurance, advanced nutrition food consultation, acquaria water testing, microchipping services and dental checks, which complement the services offered by its veterinary surgeries and Groom Room grooming salons."

JAT Capital Files 13D on Madison Square Garden (MSG)

John Thaler's hedge fund firm JAT Capital has filed a 13D with the SEC regarding shares of Madison Square Garden (MSG).  Per the filing, JAT has disclosed a 6.73% ownership stake in MSG with over 4.2 million shares.

This marks an increase of 2.6 million shares in their position size since the end of the second quarter.  The filing was made due to activity on August 12th.

The 13D filing contains the standard boilerplate that JAT may seek to engage with the board of directors.  It also notes that JAT entered into cash-settled swaps with respect to 2.9 million notional shares and call options referencing 300,000 shares.

JAT was out buying MSG stock throughout mid-August at prices ranging from $60 to $64.84.

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."

Third Point Trims Enphase Energy Stake

Dan Loeb's hedge fund firm Third Point has filed an amended 13D and Form 4 with the SEC regarding Enphase Energy (ENPH).  Per the filing, Third Point has disclosed a 15.7% ownership in ENPH with over 6.75 million shares.

This marks a decrease of over 1.28 million shares.  The filing notes they sold shares on August 19th at $10.269 to the underwriters in connection with the public offering of ENPH stock.  This price represents the public offering of $10.50 net of the underwriting discount of $0.4731 per share.

Check out the rest of Third Point's portfolio in the brand new issue of our Hedge Fund Wisdom publication.


Per Google Finance, Enphase Energy "designs, develops and sells microinverter systems for the solar photovoltaic industry. The Company’s microinverter system consists of three components: Enphase microinverter, Envoy communications gateway and Enlighten Web-based software. The Company’s Enphase microinverter delivers power conversion at the individual solar module level by introducing a digital architecture that incorporates custom application specific integrated circuits (ASICs) power electronics devices and an embedded software subsystem. The Company’s Envoy communications gateway is installed in the system owner’s home or business and serves as a networking hub that collects data from the microinverter array and sends the information to its hosted data center. The Company’s Enlighten Web-based software collects and analyzes this information to enable system owners to monitor and realize the performance of their solar photovoltaics."

Carl Icahn Goes Activist on Hertz

Activist investor Carl Icahn has filed a 13D on shares of Hertz Global Holdings (HTZ).  Per the filing, Icahn now owns 8.48% of the company with 38.8 million shares. 

This is a newly disclosed position for Icahn .  The filing was made due to activity on August 12th and it notes that Icahn intends to have discussions with management relating to "shareholder value, accounting issues, operational failures, underperformance relative to its peers and (their) lack of confidence in management."

Icahn was out buying HTZ shares in late June and sporadically throughout July.  He really ramped up his purchases in mid-August though and did a lot of buying on August 20th specifically.  This is the date that shares dropped from $31 to $28 on news of revised guidance.

Icahn primarily purchased call options and sold put options referencing an aggregate of over 35.97 million shares at June 2016 strikes.

HTZ is somewhat of a hedge fund hotel.  As of the end of the second quarter, HTZ's largest shareholders included:  Glenview Capital, SRS Investment Management, Fir Tree, York Capital, Highfields Capital, D.E. Shaw, JANA Partners, Third Point, and many more.  Just recently, Fir Tree urged the board to replace the Hertz CEO.

Per Google Finance, Hertz is "a holding company. The Hertz Corporation (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."

Lone Pine Capital Adds to Cognizant Technology Solutions Position

Steve Mandel's hedge fund firm Lone Pine Capital has filed a 13G on shares of Cognizant Technology Solutions (CTSH).  Per the filing, Lone Pine now owns 5.3% of the company with over 32.1 million shares.

This means they've boosted their position size by over 2.6 million shares since the end of the second quarter.  The filing was made due to activity on August 6th.  Shares recently dropped from $50 down to $42 and they took advantage of the decline.  CTSH has been one of Lone Pine's top holdings for quite some time.

You can view the rest of Lone Pine's portfolio in the brand new issue of our Hedge Fund Wisdom newsletter.

Per Google Finance, Cognizant Technology Solutions is "a provider of custom information technology, consulting and business process outsourcing services. The Company is engaged in Business, Process, Operations and Information Technology Consulting, Application Development and Systems Integration, Enterprise Information Management (EIM), Application Testing, Application Maintenance, Information Technology Infrastructure Services, and Business and Knowledge Process Outsourcing, or BPO and KPO. The Company operates in four segments: Financial Services; Healthcare; Manufacturing, Retail and Logistics, and Other, which includes communications, information, media and entertainment, and high technology."

New Q2 Issue of Hedge Fund Wisdom Now Available: Sign Up To Read It

The brand new Q2 2014 issue of our Hedge Fund Wisdom newsletter was just released today!  Subscribers please login at www.hedgefundwisdom.com to download it.


Featured in the New Issue

- Consensus buy/sell lists: Find out which stocks were the most popular among top managers.

- The latest portfolios of 25 top hedge funds:  See the newest buys from David Tepper, Steve Mandel, Seth Klarman, John Paulson, and many more.

- In-depth equity analysis of 2 stocks:  Hedge funds bet big on these 2 stocks recently. Get up to speed fast with company analysis and the bull/bear cases.

- Expert commentary on each fund's moves:  We've been tracking these funds for over 6 years and explain the quick thesis behind some more of their trades.

- 1 convenient .pdf:  All the latest hedge fund data aggregated in one place to save you time. Search the .pdf for your favorite manager or stocks with ease.



Subscribe Below To View Top Hedge Fund Portfolios

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

Quarterly Subscription: $89.99 per quarter

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

What We're Reading ~ Hedge Fund Links 8/15/14

Update on Miura Global's latest activity [ValueWalk]

Pershing Square's latest letter [Scribd]

Latest post by Carl Icahn [Carl Icahn]

Hedge fund branding continues to drive a majority of asset flows [All About Alpha]

A better tactic for hedge fund analysis [AI CIO]

Soros' secrets: buy bubbles, bet big [Irish Times]

SEC threshold for accredited investor likely to increase [COO Connect]

S&P questions viability of hedge fund reinsurer business model [Artemis]

Searching for yield in all the wrong places [HF Intelligence]

Activism has become a marketing strategy [FT]

ValueAct says Valeant doesn't need to buy Allergan [Reuters]

Investors pay for hedge fund illusions [Bloomberg View]

Viking Global Boosts Salix Pharmaceuticals Stake

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC regarding their stake in Salix Pharmaceuticals (SLXP).  Per the filing, Viking now owns 5% of the company with over 3.19 million shares.

They've increased their holdings by 305,850 shares and the filing was made due to activity on August 8th.

We recently highlighted some other portfolio activity from Viking Global as well.

Per Google Finance, Salix Pharmaceuticals is "a specialty pharmaceutical company dedicated to acquiring, developing and commercializing prescription drugs and medical devices used in the treatment of a variety of gastrointestinal disorders, which are those affecting the digestive tract."

Bridger Capital Adds to ChannelAdvisor Position

Recently, we highlighted Bridger Capital's new stake in ChannelAdvisor (ECOM).  Roberto Mignone's firm has just filed an amended 13G with the SEC regarding their position.

Per the filing, Bridger now owns 8.8% of the company with over 2.17 million shares.  They've increased their position by 970,993 shares and the filing was made due to activity on August 5th.  Shares have fallen from $23 recently down to around $15 and they've utilized the dip to add to their stake.

Per Google Finance, ChannelAdvisor is "a provider of software-as-a-service, or SaaS, solutions that enables retailers and manufacturer customers to integrate, manage and optimize their merchandise sales across hundreds of online channels. Through the Company’s platform, the Company enables its customers to connect with new and existing sources of demand for their products, including e-commerce marketplaces, such as eBay, Amazon and Newegg, search engines and comparison shopping websites, such as Google, Microsoft’s Bing, and Nextag, and emerging channels, such as Facebook and Groupon."

What We're Reading ~ Analytical Links 8/13/14

Zero to One: Notes on Startups, or How to Build the Future [Peter Thiel]

The Buffett formula - how to get smarter [Farnam Street]

A look at Alstom as a potential sum of the parts play [Value and Opportunity]

Value stocks in market corrections [Brooklyn Investor]

What does sentiment suggest for future returns? [Fat Pitch]

What will happen when companies stop buying back so much stock [Business Insider]

Zillow shares could fall by half [Barrons]

Taking AIG from 'sucks' to 'rocks' [Business Week]

Why you should keep an eye on Sequoia Fund [Asset Builder]

Investors move into cash, bracing for market sell off [IFRE]

The power of shareholder yield [What Works on Wall Street]

Unfortunate realities of the investment business [Wealth of Common Sense]

Buy stock pickers, avoid sector pickers [Morningstar]

Eminence Capital Starts World Wrestling Entertainment Stake

Ricky Sandler's hedge fund Eminence Capital has filed a 13G with the SEC revealing a brand new position in World Wrestling Entertainment (WWE).

Per the filing, Eminence now owns 9.6% of the company with over 3.17 million shares.  The filing was made due to activity on July 31st.

WWE shares have been on a rollercoaster thus far this year.  They started the year around $16, skyrocketed up to $31, and have recently settled down just under $14.  A lot of this volatility can be attributed to the hype and results surrounding the launch of the company's new network.

Per Google Finance, World Wrestling Entertainment is "an integrated media and entertainment company. The Company develops content via television, online and at its live events. The Company's operations are centered around four business segments: Live and Televised Entertainment, Consumer Products, Digital Media and WWE Studios. Live and Televised Entertainment segment's revenues consist principally of ticket sales to live events, sales of merchandise at these live events, television rights fees, integrated sponsorships fees, and fees for viewing the Company's pay-per-view and video-on-demand programming."

You can view additional recent portfolio activity from Eminence Capital here.

Glenview Capital Discloses Group 1 Automotive Stake

Larry Robbins' hedge fund firm Glenview Capital has just filed a 13G with the SEC.  They've disclosed that they now own 6.24% of Group 1 Automotive (GPI) with over 1.5 million shares.

This is a newly revealed stake and the filing was made due to activity on July 31st.

For more from this hedge fund, check out Larry Robbins at the Delivering Alpha conference.

Per Google Finance, Group 1 Automotive is "an operator in the automotive retailing industry. Through its operating subsidiaries, it markets and sells a range of automotive products and services, including new and used cars and light trucks; arrange related vehicle financing; service and insurance contracts; provide automotive maintenance and repair services, and sell vehicle part."

Eton Park Capital Starts Armstrong World Industries Position

Eric Mindich's hedge fund firm Eton Park Capital has filed a 13G with the SEC regarding shares of Armstrong World Industries (AWI).  Per the filing, Eton Park now owns 6.69% of the company with over 3.66 million shares.

This is a newly disclosed equity position for the hedge fund and the filing was made due to activity on August 1st.

Eton Park is now the second major hedge fund to recently reveal a stake in the company as Jeff Ubben's ValueAct Capital took an AWI stake as well.

Per Google Finance, Armstrong World Industries is "a global producer of flooring products and ceiling systems for use in the construction and renovation of residential, commercial and institutional buildings. The Company designs, manufactures and sells flooring products (resilient and wood) and ceiling systems (mineral fiber, fiberglass and metal) globally. The Company segments includes: Building Products, Resilient Flooring and Wood Flooring. The Company’s Building Products, Resilient Flooring, Wood Flooring and Cabinets segments sell products for use in the home. Its products are used in new home construction and existing home renovation work. Its products, primarily ceilings and Resilient Flooring, are used in commercial and institutional buildings."

Paulson & Co Boosts NovaCopper & Cobalt International Energy Stakes

John Paulson's hedge fund firm Paulson & Co has filed two 13G's with the SEC.

NovaCopper (NCQ)

First, Paulson's amended 13G on Novacopper (NCQ) indicates that they now own 18.3% of the company with over 11.5 million shares. 

This marks an increase of over 5.59 million shares since the end of the first quarter.  The filing was made due to activity on July 31st.

Per Google Finance, Novacopper is "a base metals exploration company. The Company is engaged in the exploration and development of mineral properties, including the Arctic and Bornite Projects located in Northwest Alaska in the United States of America. Its exploration activities are focused on two deposits in the Ambler district: the Arctic VMS deposit and the Bornite carbonate replacement deposit."


Cobalt International Energy (CIE)

Second, Paulson & Co has filed a 13G regarding shares of Cobalt International Energy (CIE).  Per the filing, the hedge fund firm now owns 10.1% of the company with over 41.8 million shares.

This is an increase of over 14.6 million shares since the end of the first quarter.  The filing was made due to portfolio movement on July 31st.

Per Google Finance, Cobalt International Energy is "oil-focused exploration and production company with a salt prospect inventory in the deepwater of the United States Gulf of Mexico and offshore Angola and Gabon in West Africa. The Company operates its business in two geographic segments: the U.S. Gulf of Mexico and West Africa. The Company’s oil-focused exploration efforts target subsalt Miocene and Inboard Lower Tertiary horizons in the deepwater U.S. Gulf of Mexico."

You can view additional recent portfolio activity from Paulson & Co here.

Larry Robbins Focusing on Companies Deploying Capital

Institutional Investor has released an excerpt of their interview with Glenview Capital's Larry Robbins from the Delivering Alpha Conference.  In it, Robbins talks about how the market will react to the Fed releasing the 'training wheels.'

He says Glenview has been actively focusing on companies actively deploying capital, taking advantage of cheap interest rates, etc.  He likes companies that are "flush with cash, that have significant debt capacity, that are defensive and growing and that are trading at cheap valuations (maybe not as cheap as 2 years ago)."

For more from him, we've posted Robbins' 6 best ideas at the Delivering Alpha conference.

Embedded below is the video of Larry Robbins' interview:



For more from this conference, we've also posted an interview with Maverick Capital's Lee Ainslie.

Lee Ainslie on M&A Boom, Cybersecurity & the VIX

Institutional Investor just released an excerpt from an interview with Maverick Capital's Lee Ainslie from the Delivering Alpha Conference.  In it, Ainslie touches on the M&A boom, cybersecurity, and the low volatility index readings (VIX).

Ainslie says that there could be a bigger level of mergers and acquisitions than in 2007 thanks to large corporate cash balances and the fear that interest rates will increase or the tax inversion loophole will close. 

He also likes to look for secular trends from the top down and then identify specific companies that will benefit from those trends.  One of the biggest trends he's seeing now is network security / cybersecurity, though he doesn't mention any specific names.

Lastly, Ainslie points out that the VIX has seen spikes on a more frequent basis as the years go by.  He argues that the there's a contrast between the threats in the world and the low levels the VIX has been sitting at, which he thinks is not being priced appropriately. 

Embedded below is Institutional Investor's interview with Lee Ainslie:



You can view some of Maverick Capital's portfolio activity here.

Baupost Group Starts Veritiv Position

Seth Klarman's hedge fund firm Baupost Group has filed a 13G with the SEC regarding shares of Veritiv (VRTV).  Per the filing, Baupost now owns 14.06% of the company with 2,249,601 shares.

The filing was made due to activity on July 31st.  Veritiv shares just recently started trading in June.

You can view additional recent portfolio activity from Baupost Group here. 

Per the company's website, Veritiv is "a North American leader in business-to-business distribution solutions."

12 West Capital Discloses Diana Containerships Position

Joel Ramin's hedge fund firm 12 West Capital has filed 13D with the SEC regarding shares of Diana Containerships (DCIX).  Per the filing, the hedge fund now owns 22.4% of the company with over 16.4 million shares.

This is a newly disclosed position for 12 West and the filing was made due to activity on July 29th. 

The 13D breaks down some of 12 West's recent purchases in the open market in late June at around $2.52 per share and then via a private placement purchase at the end of July at $2.51.

12 West also has previously disclosed a stake in Euroseas.  You can view additional portfolio activity from 12 West Capital here.

ValueAct Capital Takes 21st Century Fox Stake

CNBC's David Faber this morning reported that Jeff Ubben's activist firm ValueAct Capital has taken a stake in 21st Century Fox (FOXA).

Faber reports they have a $1 billion stake in the company and built the position while FOX had submitted a bid for Time Warner (TWX).  During that time, FOX shares noticeably declined.

He also reports that Ubben likes the company's standalone plan as they decided to walk away from the deal, though sees the logical advantages of a tie-up should that happen in the future.  Ubben thinks FOX can earn $2.50 per share in 2016.

Embedded below is the video of Faber's report with the details:

Video Embed Size:   530 X 298   640 X 360

For more on this firm, head to some of ValueAct's recent portfolio activity here.

What We're Reading ~ Hedge Fund Links 8/8/14

Marcato adds to pressure on InterContinental Hotels [Dealbook]

Soros no longer holds shares of SodaStream [Bloomberg]

Loeb sees decisive economic data spurring Fed action [Bloomberg]

Miura Global closes to new investors [II Alpha]

Once flashy, hedge funds now seen as staid but consistent [Dealbook]

Summertime loving isn't easy for macro funds [WSJ]

Dan Och's hedge fund is getting really big [Forbes]

Hedge funds amass short positions in private equity-backed IPOs [FT]

Building a sustainable hedge fund model [CSen]

Renaissance drops with Paulson in July [Bloomberg]

Obama versus hedge funds - a real fight or professional wrestling? [Forbes]

Viking Global Reveals Newfield Exploration Position

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G on shares of Newfield Exploration (NFX).  The hedge fund now owns 5.7% of the company with over 7.78 million shares.

This is a brand new position for Viking and the filing was required due to activity on July 28th.

Per Google Finance, Newfield Exploration is "an independent energy company engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. The Company’s domestic areas of operation include the Mid-Continent, the Rocky Mountains and onshore Texas. Internationally, it focuses on offshore oil developments in Malaysia and China."

What We're Reading ~ Analytical Links 8/7/14

The World's 99 Greatest Investors: The Secret of Success [Magnus Angenfelt]

Interview with Michael Mauboussin [Bloomberg]

On finding large gaps between price and value [Base Hit Investing]

In search of the world's best investment advice [AFR]

A look at Lancashire Holdings [WertArt Capital]

Is TJ Maxx the best retail store in the land? [Fortune]

Shoppers are fleeing physical stores for the web [WSJ]

Does Valeant's cost cutting go too far? [Pro Publica]

How AMC Networks could benefit from the urge to merge in TV [QZ]

Sprint drops bid to buy T-Mobile after regulatory resistance [Reuters]

Dish chairman says bid for T-Mobile possible now that Sprint backs off [Reuters]

ValueAct Capital Discloses Armstrong World Industries Position

Jeff Ubben's hedge fund firm ValueAct Capital has filed a Form 4 with the SEC regarding shares of Armstrong World Industries (AWI).  Per the filing, ValueAct has revealed they own 9,2000,000 shares of AWI.

The filing indicates that between July 29th and July 31st, ValueAct bought cumulatively 1 million shares at prices ranging from $48.73 to $49.28.  Shares of AWI were not listed on ValueAct's last 13F filing which detailed holdings as of the first quarter of 2014.  As such, it appears this is a newly disclosed position.

ValueAct is now one of the largest holders of AWI shares.  For more from this hedge fund, head to Jeff Ubben on activist investing.

Per Google Finance, Armstrong World Industries is "a global producer of flooring products and ceiling systems for use in the construction and renovation of residential, commercial and institutional buildings. The Company designs, manufactures and sells flooring products (resilient and wood) and ceiling systems (mineral fiber, fiberglass and metal) globally. The Company segments includes: Building Products, Resilient Flooring and Wood Flooring. The Company’s Building Products, Resilient Flooring, Wood Flooring and Cabinets segments sell products for use in the home. Its products are used in new home construction and existing home renovation work. Its products, primarily ceilings and Resilient Flooring, are used in commercial and institutional buildings."

Paulson & Co Boosts Mallinckrodt Stake Again

John Paulson's hedge fund firm Paulson & Co has filed a Form 4 with the SEC regarding their stake in Mallinckrodt (MNK).  Per the filing, Paulson bought 200,000 MNK shares at $69.6507 on July 31st and 75,000 shares at $69.4541 on August 1st.

After these buys, Paulson & Co now owns 6,999,800 shares of Mallinckrodt. As we've detailed previously, Paulson has been buying MNK repeatedly after they received an option to increase their stake to 20% of the company.

Mallinckrodt has announced an agreement to acquire the controversial Questcor Pharma (QCOR), which has been a favorite short play of many hedge funds.  While Barry Rosenstein's JANA Partners has owned MNK as well, David Einhorn's Greenlight Capital recently revealed in their Q2 letter that they would like to be short the combined entity, primarily due to QCOR.

Per Google Finance, Mallinckrodt is "a global specialty pharmaceuticals company. The Company develops, manufactures, markets and distributes both branded and generic specialty pharmaceuticals, active pharmaceutical ingredients (API) and diagnostic imaging agents. The Company uses its API products in the manufacture of its generic pharmaceuticals and also sells them to other pharmaceutical companies. The Company operates through two segments: Specialty Pharmaceuticals and Global Medical Imaging."

Second Curve Capital Raises Regional Management Stake

Tom Brown's hedge fund firm Second Curve Capital has filed an amended 13G with the SEC regarding their position in Regional Management (RM).  Per the filing, Second Curve now owns 10% of the company with 1,273,960 shares.

This marks an increase of 188,000 shares since the end of the first quarter.  The filing was made due to activity on July 7th.

Per Google Finance, Regional Management is "a diversified specialty consumer finance company providing a range of loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies and other traditional lenders. The Company has a branch network throughout the Southeast and Southwestern United States. Each of its loan products is secured, structured on a fixed rate, fixed term basis with fully amortizing equal monthly installment payments and is repayable at any time without penalty. Regional’s loans are sourced through its multiple channel platform, including in its branches, through direct mail campaigns, independent and franchise automobile dealerships, online credit application networks, furniture and appliance retailers and its consumer Website."

Berkshire Hathaway Increases Verisign Position

Warren Buffett's Berkshire Hathaway has filed an amended 13G with the SEC.  Per the filing, Berkshire Hathaway no owns 10.4% of the company with 12,985,000 shares.

This marks an increase of over 1.29 million shares since the end of the first quarter.  The filing was made due to activity on July 31st.

This investment was likely originally made by Buffett's newest portfolio managers: Todd Combs and Ted Weschler.  Since they've joined, Berkshire has accumulated shares.  Thus far this year, VRSN has slipped from $62.95 down to a low of $46.45 before rebounding slightly to current levels of $54.84.

Verisign has been hit with a bit of uncertainty as news came out earlier in the year that the US Department of Commerce will relinquish control of ICANN.

Per Google Finance, Verisign "is a provider of Internet infrastructure services. The Company provides network confidence and availability for mission-critical Internet services, such as domain name registry services and infrastructure assurance services. Its service capabilities enable real-time name resolution for a number of global top level domains (TLDs), enable domain name registration through registrars, and provide security intelligence and cloud-based network availability services to enterprise customers. It has one reportable segment is Naming Services, which consists of Registry Services and Network Intelligence and Availability (NIA) Services. It has operations inside as well as outside the United States (U.S.). Registry Services operates the authoritative directory of all .com, .net, .cc, .tv, and .name domain names and the back-end systems for all .gov, .jobs and .edu domain names."

For more, check out notes from Berkshire Hathaway's annual meeting as well as Warren Buffett's annual letter.

Bridger Capital Discloses ChannelAdvisor Stake

Roberto Mignone's hedge fund Bridger Capital has filed a 13G with the SEC regarding shares of ChannelAdvisor (ECOM). Per the filing, Bridger has disclosed they own 6.8% of the company with 1,670,993 shares.

This is a newly disclosed equity stake and the filing was made due to activity on July 22nd.  You can view other portfolio activity from Bridger this year here.

Per Google Finance, ChannelAdvisor is "a provider of software-as-a-service, or SaaS, solutions that enables retailers and manufacturer customers to integrate, manage and optimize their merchandise sales across hundreds of online channels. Through the Company’s platform, the Company enables its customers to connect with new and existing sources of demand for their products, including e-commerce marketplaces, such as eBay, Amazon and Newegg, search engines and comparison shopping websites, such as Google, Microsoft’s Bing, and Nextag, and emerging channels, such as Facebook and Groupon."

JANA Partners Again Calls For PetSmart To Explore A Sale

Barry Rosenstein's hedge fund JANA Partners has filed an amended 13D with the SEC regarding their activist position in PetSmart (PETM).  Per the filing, JANA has sent an additional letter to the board, urging them to explore a sale of the company.  You can view the first letter JANA sent here. 

Below is the second letter Rosenstein has sent:

"August 4, 2014  
Board of Directors
PetSmart, Inc.
19601 North 27th Avenue
Phoenix, Arizona 85027
Attention: David K. Lenhardt, President and Chief Executive Officer  

Ladies and Gentlemen,  

As you know, JANA Partners LLC (“we” or “us”) and other shareholders have called upon PetSmart, Inc. (“PetSmart” or the “Company”) to conduct a review of all strategic alternatives including a sale of the Company. Given PetSmart’s chronic operational underperformance and failure to generate shareholder value, and given significant interest in an acquisition of the Company, it is very likely that such a sale offers the best risk-adjusted return for shareholders. It is becoming clear, however, that rather than fully exploring all potential opportunities, the board of directors (the “Board”) is attempting to prejudice the ultimate outcome of any such strategic review by steering it away from the most likely path to maximum value creation for shareholders.  

First, it appears that PetSmart has sought to create the patently false impression that there is a shortage of interested acquirers. In fact, we are aware that there are multiple interested potential acquirers, all of whom could pay shareholders a meaningful premium. This interest is not surprising given the highly attractive fundamentals of the pet store industry, the turnaround opportunity for skilled operators, the robust financing market available to acquirers, and the successful acquisition of Petco Animal Supplies Inc., whose private equity owners have already earned back more than 1.5x their original investment through dividend recapitalizations and seen the value of their investment climb as Petco continues to take share from PetSmart.  

Second, we have learned that the Board continues to float new proposals for alternate transactions, despite publicly conceding last week that it has not yet engaged with potential acquirers. As shareholders have made quite clear, given the magnitude and certainty of value creation that a sale likely offers, any standalone path must be measured against a potential sale, which the Board cannot do without first fully engaging with potential buyers. Should the Board need any reminders of the risks for an underperforming company that turns a blind eye to interested buyers, it need only look at the example of Borders Book Group, which was the subject of acquisition interest during current PetSmart Board Chairman Gregory P. Josefowicz’s tenure as its Chairman and CEO, yet pursued an ultimately value-destroying standalone path instead.            

In short, we warn the Board not to compound the damage that has resulted from years of underperformance by now ruling out the path that likely represents its single highest and most certain value maximization opportunity. We can assure you that shareholders will hold each and every director responsible, including supporting significant change at the next annual meeting, should the Board conduct anything less than a fulsome review of all options including a sale. Should you wish to discuss this matter further, you may reach us at (212) 455-0900.  

Sincerely,  

/s/ Barry Rosenstein  
Barry Rosenstein
Managing Partner
JANA Partners LLC"

What We're Reading ~ Hedge Fund Links 8/1/14

Lone Pine tells clients loss stemmed from sins of omission [II Alpha]

Profits soaring after disgrace at Cohen's hedge fund [Dealbook]

Politically connected hedge funds earn higher profits [ValueWalk]

Hedge funds bet big on overseas tax deals [WSJ]

On the Buffett versus hedge funds bet [FT Alphaville]

Manager says this 'mania' health stock will fall 90% [CNBC]

Private equity's most consistent performers [aiCIO]

East Coast Asset Management on An Ownership Mindset: Q2 Letter

Christopher Begg's East Coast Asset Management is out with its Q2 letter.  In it, Begg outlines the "value of an ownership mindset and how it plays an integral part in a compounding triumvirate with a good business and an effective operator."

Comparing investing to horse racing, he highlights how it's important to ask certain questions:

"If we bought this business in its entirety, could we put blinders on for five or ten years and feel secure in our investment?  Our level of comfort is simplified by the three key factors of business (horse), operational excellence (jockey), and the timelessness of an owner mindset (owner/trainer)."


Embedded below is East Coast's full Q2 letter:



For more from this firm, check out their previous letter on understanding the mispricing of an investment.

Corsair Capital's Thesis on SeaWorld: Q2 Letter

Jay Petschek and Steven Major's hedge fund firm recently sent out their second quarter letter and in it they include a pitch on SeaWorld (SEAS). 

They see the investment as one with limited downside and an upside of at least $40 per share over the next year.  Corsair feels the company has a great expansion opportunity ahead of it.  They also feel that Blackstone will eventually sell its remaining 20% ownership stake which will remove an overhang on the stock.

You can read Corsair's full investment thesis on SeaWorld embedded below:



For more recent hedge fund letters we've also posted up Greenlight Capital's letter and Third Point's Q2 letter.

Stan Druckenmiller's Presentation at Delivering Alpha Conference

A few weeks ago, we highlighted Stan Druckenmiller's comments at the Delivering Alpha Conference.  Now, CNBC has released the full video of his talk which is worth viewing.

Embedded below is Stan Druckenmiller's presentation at the Delivering Alpha conference:



For more from that event, be sure to also check out Lee Cooperman's stock picks and Larry Robbins' best ideas.

What We're Reading ~ Analytical Links 7/30/14

Bill Gates calls this "the best business book I've ever read" [John Brooks]

6 signs of a good investment process [Clear Eyes Investing]

Rethinking buybacks [CFO]

On Demand Media and Rightside [Buyside Notes]

Why media mergers limit more than competition [NYTimes]

Interview with Liberty Global's Mike Fries & John Malone [WSJ]

On the Liberty Broadband spinoff [Glenn Chan]

Online corporate finance and valuation classes [Aswath Damodaran]

Presentation on Visa: great company at fair price [ValueWalk]

A pitch on Future Bright Holdings [Red Corner]

Investors rush into student loans [CNN Money]

JANA Partners' Letter to PetSmart's Board

Barry Rosenstein's activist hedge fund firm JANA Partners has filed an amended 13D with the SEC regarding their position in PetSmart (PETM).  They currently own 9.8% of the company and are the largest shareholder.

Rosenstein's letter to the board indicates they want the company to begin a "full strategic review which includes engaging with potential buyers."  And if the company doesn't do so, JANA will seek to change up the board at the next annual meeting.

Embedded below is JANA's letter to PetSmart's board:



For more from this fund, head to Barry Rosenstein's thoughts on activist investing.

12 West Capital Discloses NutriSystem Stake

Joel Ramin's hedge fund firm 12 West Capital has filed a 13G with the SEC regarding shares of NutriSystem (NTRI).  Per the filing, the hedge fund now owns 5.3% of the company with over 1.5 million shares.

This is a newly disclosed equity stake for the firm and the filing was made due to activity in July 16th. 

You can view other recent portfolio activity from 12 West here.

Per Google Finance, NutriSystem is "a provider of a weight management system. The Company’s customers purchase monthly food packages containing a 28-day supply of breakfasts, lunches, dinners and desserts, which they supplement with dairy, fruit, salad, vegetables and low-glycemic carbohydrate items. Its customers order on an auto-delivery basis (Auto-Delivery), in which it sends a month’s food supply on an ongoing basis until notified by the customer to stop its shipments. Its product offerings also include a combination of its ready-to-go food and its fresh-frozen line of menu items. It sells its weight management program through a direct-to-consumer sales and distribution approach using the Internet and telephone."

Balyasny Asset Management Boosts NuStar Energy Stake

Dmitry Balyasny's hedge fund firm Balyasny Asset Management has filed a 13G with the SEC on NuStar Energy (NS).  Per the filing, Balyasny now owns 5.07% of the company with over 3.95 million shares.

This means their equity stake has increased by over 1.64 million shares since the end of the first quarter.  The filing was made due to activity on July 21st.

Per Google Finance, NuStar Energy is "engaged in the terminalling and storage of petroleum products, the transportation of petroleum products and anhydrous ammonia, and petroleum refining and marketing. NuStar Energy operates in three business segments: storage, transportation, and asphalt and fuels marketing. In February 2014, the Company announced that it has completed the transaction with an affiliate of Lindsay Goldberg LLC, a private investment firm, to divest all of its 50% voting interest in an asphalt joint venture that owns a refinery located in Paulsboro, New Jersey."

Greenlight Capital Q2 Letter: Einhorn Reveals Lam Research Stake

David Einhorn's hedge fund Greenlight Capital was up 7.9% net in the second quarter and is up 6.4% for the year.  In their Q2 letter, Greenlight reveals a new position in Lam Research (LRCX).

They see the company as a beneficiary as the process of converting semiconductor designs into chips becomes harder to do.

Greenlight also bought a stake in Mallinckrodt (MNK) but reversed course and sold the stake due to their negative stance on Questcor (QCOR), a company MNK has agreed to purchase.  Greenlight thinks the combined company "is setting itself up to be a very attractive short sale candidate if the merger is completed."  The letter notes that Greenlight was short QCOR.

During the quarter, the hedge fund also sold out of its longs in Aspen Insurance (AHL) and Rite Aid (RAD) at nice gains.

At the end of Q2, Greenlight's largest positions (in alphabetical order) were: Apple (AAPL), gold, Marvell Technology (MRVL), Micron Technology (MU), Resona Holdings (TYO:8308) and SunEdison (SUNE).

Embedded below is Greenlight's Q2 letter with commentary on more of their positions:

What We're Reading ~ Hedge Fund Links 7/25/14

Glenview keeps the gains going [II Alpha]

Tales of the death of hedge funds have been greatly exaggerated [Ritholtz]

JANA takes new position in Apache [ValueWalk]

Hedge funds, Google and the "right to be forgotten" [HF Intelligence]

The big money still loves hedge funds [CNBC]

Elliott pushes EMC to split off VMware [WSJ]

The solution to the Senate's report on hedge funds tax dodging [Forbes]

Citadel Discloses New Stake in Blackhawk Network

Ken Griffin's Citadel has filed a 13G with the SEC regarding shares of Blackhawk Network (HAWK).  Per the filing, Citadel now owns 5.2% of the company with 653,618 shares. 

This is a brand new position for them and the filing was made due to activity on July 22nd.  HAWK completed its spinoff from Safeway (SWY) earlier this year.

You can view more recent portfolio activity from Citadel here.

Per Google Finance, Blackhawk Network is "a prepaid payment network utilizing technology to offer a range of gift cards, other prepaid products and payment services in the United States and 18 other countries. Its product offerings include gift cards, prepaid telecom products and prepaid financial services products (including general purpose reloadable (GPR), cards and its reload network). In addition, it sells physical and electronic gift cards to consumers through both online distributors and its Website, GiftCardMall.com. It offers gift cards from consumer brands, such as Amazon.com, Applebee’s, iTunes, Lowe’s, Macy’s and Starbucks and from payment networks, such as American Express, MasterCard and Visa."

Odey Reveals Tungsten Corporation Stake

Crispin Odey's Odey Asset Management has disclosed a new position in London listed Tungsten Corporation (LON: TUNG).  Due to trading on July 21st, Odey hold 5.21% of Tungsten's voting rights.

Other large investors in Tungsten include Wellington Management with 5% and GLG Partners with 3.63%.  Tungsten is a relatively young business which floated on AIM back in October 2013.

Per Google Finance, Tungsten "is the holding company of OB10 Limited and its subsidiaries. The Company together with its subsidiaries is engaged in the provision of electronic invoice delivery (e-invoicing) to suppliers and buyers. OB10 Limited provides services, such as e-invoicing, where suppliers can send electronic invoices to their customers, eliminating the need for paper documentation; purchase order services, where buyers can send purchase orders to their suppliers; invoice status services, where suppliers can establish the approval and payment status of the invoices they have sent to their customers, and payment services, which includes solutions to enable supply chain financing. The Company operates in European Union, America and Asia."

What We're Reading ~ Analytical Links 7/23/14

In the Plex: How Google Thinks, Works & Shapes Our Lives [Steven Levy]

Importance of ROIC: compounding and reinvestment [Base Hit Investing]

Some thoughts on Twitter [Dan Benton]

LUMA Partners on the future of TV [BusinessInsider]

An old interview with Peter Lynch [PBS]

On the boom in subprime used auto lending [Dealbook]

It's time to split up Microsoft [Stratechery]

Why HBO is such an attractive asset [Quartz]

Sprint planning for lengthy review of T-Mobile deal [Bloomberg]

GMO Q2 Letter: Jeremy Grantham Says Bigger M&A Frenzy Coming

Jeremy Grantham is out with GMO's Q2 letter.  In it, Grantham talks about how he sees a frenzy in mergers and acquisitions coming (on top of the already large number we've seen).

He writes,

"If I were a potential deal maker I would be licking my lips at an economy that seems to have enough slack to keep going for a few years.  Also, individuals and institutions did feel chastened by the crash of 2009 and many are just now picking up their courage.  And as they look around they see dismayingly little in the way of attractive investments or yields.  So, the returns promised from deal making are likely to appear, relatively at least, exceptional.  I think it is likely (better than 50/50) that all previous deal records will be broken in the next year or two.  This of course will help push the market up to true bubble levels, where it will once again become very dangerous indeed."

Grantham feels the M&A boom will continue mainly due to low interest rates, but also because the economy has the 'early-cycle look' that could see a few more years of recovery.  Profit margins are higher this time around and there is room for increased capital spending as well.

All of these things combined create the perfect storm for "a veritable explosion, to levels never seen before."

Embedded below is GMO's Q2 letter:

Maverick Capital Starts Countrywide Plc Stake

Lee Ainslie's hedge fund firm Maverick Capital has disclosed a new position in London listed residential estate agent, Countrywide Plc (LON:CWD).  Due to trading on July 14th, Maverick now hold the equivalent of 3.04% of Countrywide's voting rights, all via total return swap.

Countrywide Plc is the UK's largest estate agency group.  In 2007, the company was taken private by Apollo Management.  In March 2013, it was re-listed on the London Stock Exchange.  Currently, the largest shareholder is Howard Marks' Oaktree Capital with 27.59% of the voting rights.

For more on Maverick, check out an in-depth interview with Lee Ainslie here.

Per Google Finance, Countrywide Plc is "an integrated residential estate agency and property services group in the United Kingdom. The Company offers estate agency and lettings services, together with a range of complementary services. The Company operates in five businesses: residential property sales; residential property lettings and property management; arranging mortgages, insurance and related financial products (provided by third parties) for participants in residential property transactions; surveying and valuation services for mortgage lenders and prospective homebuyers, and residential property conveyance services. Countrywide Holdings, Ltd. is the holding company of the Company."

Alpha Hedge West Conference: 10% Discount

Information Management Network (IMN) is proud to announce that the 20th annual Alpha Hedge West Conference will take place September 21-23, 2014 in San Francisco, California.  The event covers a wide variety of investment management topics and is much broader than other events as it includes speakers from top hedge funds, private equity firms, family offices, capital allocators and more.

Market Folly readers can receive 10% off admission by registering via this link and using the discount code: Folly10


Speakers List

John Burbank, Passport Capital
Ronnie Jaber, Carlyle Group
Kurt Billick, Bocage Capital
Gareth Henry, Fortress Investment Group
John Rohal, Man Group
Christopher Cole, Artemis Capital Management
Brian McQuade, CALPERS Investments
Justin Sheperd, Aurora Investment Management
Rajesh Agarwal, Napier Park Global Capital
Christopher Teets, Red Mountain Capital
Matthew Hepler, Relational Investors
Ken Shubin Stein, Spencer Capital
...and a ton of other speakers too (full list here)


Panel Topics

- State of the Hedge Fund Union
- Adding Value as a Fund of Hedge Funds
- Due Diligence and Monitoring of Hedge Fund Service Providers
- How Are Institutions Using 40 Act as Part of Their Portfolio?
- How To Invest in a Rising Interest Rate Environment
- Activist Strategies
- Under the Radar: Incubators and Investing in Emerging Managers
- Examining the Convergence of the Private Equity and Hedge Fund Business
... and many more (full schedule here)


Discount Code

Remember, to receive 10% off, be sure to click here to register and enter the discount code: Folly10

It should be a fantastic event covering a myriad of topics across the capital allocation spectrum.

Third Point's Q2 Letter on Royal DSM & International Holdings

Dan Loeb's hedge fund Third Point is out with its Q2 letter which focuses on some of their international positions.

They continue to feel that change is coming in Japan and are finding compelling individual investments there (especially with event-driven components).

The letter also details Third Point's investment in Kroton Educacional SA in Brazil, Fibra Uno in Mexico, and Argentinian oil company YPF.

Dan Loeb's fund also writes an in-depth thesis on Royal DSM, a global health company.

Embedded below is Third Point's Q2 letter:


You can download a .pdf copy here.

For more on this hedge fund, you can also view Third Point's Q1 letter.

What We're Reading ~ Hedge Fund Links 7/18/14

Profile of Lee Cooperman [CNBC]

Excerpts from Paulson & Co's latest letter [ValueWalk]

Investors increasingly looking to make hedge fund allocations [COO Connect]

Viking Global preps illiquid investments fund [CNBC]

The top hedge fund in a post financial crisis world is... [II Alpha]

Profile of RenTec's Jim Simons [NYTimes]

KKR doubles down on hedge funds [WSJ]

Tiger Global Exits Tuniu (TOUR) Position

Chase Coleman and Feroz Dewan's hedge fund Tiger Global has filed an amended 13G with the SEC regarding shares of Tuniu (TOUR).  Per the filing, Tiger Global no longer owns an equity stake in the company.

The filing was made due to activity on July 15th.  We previously disclosed Tiger Global's new Tuniu stake back in May as the company completed its IPO then.  But now they've exited that position.

For more recent activity from this hedge fund, check out Tiger Global's moves here.

Per Google Finance, Tuniu is "an online leisure travel company. The Company offers a selection of packaged tours, including organized tours and self-guided tours, as well as travel-related services for leisure travelers. It offers packaged tours sourced from over 3,000 travel suppliers, covering over 70 countries, as well as all popular tourist attractions in China. The Company’s product portfolio consists of over 100,000 stock-keeping units (SKUs) of organized tours, over 100,000 SKUs of self-guided tours, and tickets for over 1,000 domestic and overseas tourist attractions. Its online platform, which consists of its tuniu.com Website and mobile platform, provides comprehensive product and travel information through user-friendly interfaces to enable leisure travelers to plan their travels and search for itineraries. Its online platform contains photos, information and recommendations for all destinations it covers."

What We're Reading ~ Analytical Links 7/17/14

Serengeti Asset Management's thesis on Energy XXI [Harvest]

Investing Psychology: The Effects of Behavioral Finance on Investment Choice [Tim Richards]

Analyzing the impact of Fed rate hikes on markets & economy [Advisor Perspectives]

More notes from the Delivering Alpha conference: Paulson, Peltz & Icahn [Reformed Broker]

HBO said valued at $20 billion by Fox seeking Netflix killer [Bloomberg]

Most important investing trait? Patience [Alpha Baskets]

US stands to lose billions from corporate tax inversions [WSJ]

Glenview Capital Boosts Carter's Position

Larry Robbins' hedge fund firm Glenview Capital has filed a 13G with the SEC regarding shares of Carter's (CRI).  Per the filing, Glenview now owns 6.84% of the company with over 3.67 million shares.

This marks an increase of over 2.1 million shares in their position size since the end of the first quarter.  The filing was made due to activity on July 10th.

Glenview isn't the only hedge fund that's been out buying CRI shares, either.  We recently highlighted that Hound Partners added to their Carter's stake too.

Per Google Finance, Carter's is "a branded marketer of apparel for babies and young children in the United States. The Company owns two brand names in the children’s apparel industry, Carter’s and OshKosh. Its Carter’s brand provides apparel for children sizes ranging from newborn to seven. OshKosh brand provides its line of apparel for children sizes newborn to 12. Its Carter’s, OshKosh, and related brands are sold to national department stores, chain and specialty stores and discount retailers."

Stan Druckenmiller's Thoughts at Delivering Alpha Conference

At CNBC and Institutional Investor's Delivering Alpha conference today, legendary investor Stan Druckenmiller shared his latest thoughts.

At the event, Druckenmiller said he can't bet as big as he used to these days.  He also noted that other investors like David Tepper and George Soros have the biggest (you know what) on Wall Street these days.

Also, he knocked IBM as a company that's spending all of its money on share buybacks instead of on innovating and this could come back to haunt them as they get passed by modern technology companies.

Regarding the latest slew of IPO's, Druckenmiller pointed out that 80% of those companies don't really have earnings.

Turning to the Fed, he also argued that the consequences of monetary policy will be a lot worse than they think and said their policy is baffling.

He thinks we have to keep dancing until the music stops, but the problem is most people won't be able to exit fast enough once it happens.

Lee Cooperman's Favorite Stock Picks at Delivering Alpha Conference

At CNBC and Institutional Investor's Delivering Alpha conference today, Omega Advisors' Lee Cooperman shared his favorite stock picks.

He likes Actavis (ACT), a tax inversion play, Citigroup (C), a good buy he says because the economy is healing with loan demand and one that could narrow the discount to book value over time, as well as Gaming and Leisure Properties (GLPI) and Nordic American Offshore (NAO).

Other plays he likes include: QEP Resources (QEP), Supervalu (SVU), Louis XIII (577 HK), and Monitise (MONI.LN), the mobile payments play he's pitched before.

Lastly, he also mentioned Thermo Fisher Scientific (TMO), KKR (KKR) and Sandridge Energy (SD).

Cooperman also noted that the last time the Fed raised rates was in 2006 and around 25% of fund managers weren't really around to experience that.

He also joked that the last time he was bearish was during his Bar Mitzvah.

One quote that stood out from him was that, "if you buy something that's out of favor, things seem to happen to make you right."


Lee Cooperman will be presenting new investment ideas at the upcoming Value Investing Congress in a few months and readers can receive a discount to the event by registering here and using discount code: MARKETFOLLY

Larry Robbins' 6 Best Ideas at Delivering Alpha Conference

At CNBC and Institutional Investor's Delivering Alpha conference today, Glenview Capital's Larry Robbins highlighted his six best ideas.

His stock picks were: Thermo Fisher Scientific (TMO) which has been his largest holding, Monsanto (MON) which he previously pitched here, as well as HCA (HCA), Hertz (HTZ), National Oilwell Varco (NOV) and Flextronics (FLEX), a position he added to in May.

He likes that all of these can raise money on the cheap and then buyback shares.  So basically, his favorite investment idea is a theme of companies levering up.

Also, today we highlighted that Robbins has been buying Carter's (CRI) shares recently too.

Lone Pine Capital Starts Spirit Airlines Stake

Steve Mandel's hedge fund firm Lone Pine Capital has filed a 13G with the SEC on shares of Spirit Airlines (SAVE).  Per the filing, Lone Pine now owns 6% of the company with over 4.3 million shares.

This is a brand new position for the hedge fund as they did not own any shares at the end of Q1.  The filing was made due to activity on July 2nd.

You can view additional portfolio activity from Lone Pine here.

Citadel Ups Position in PHH Corp

Ken Griffin's Citadel has filed an amended 13G with the SEC regarding shares of PHH (PHH).  Per the filing, Citadel now owns 9.6% of the company with over 5.5 million shares.

This marks an increase of over 3.9 million shares in their position size since the end of the first quarter.  The filing was made due to activity on July 8th.  PHH recently said they would repurchase around 35% of shares.

Per Google Finance, PHH is "an outsource provider of mortgage and fleet management services. PHH operates in three segments: Mortgage Production, Mortgage Servicing and Fleet Management Services. The Company provides mortgage banking services to a range of clients, including financial institutions and real estate brokers, throughout the United States. The Company’s mortgage banking activities include originating, purchasing, selling and servicing mortgage loans through its wholly owned subsidiary, PHH Mortgage Corporation and its subsidiaries (collectively PHH Mortgage). It provides commercial fleet management services to corporate clients and government agencies throughout the United States and Canada through its wholly owned subsidiary. In July 2014, PHH sold its Fleet Management Services business, doing business as PHH Arval, to Element Financial Corporation."

Paulson & Co Updates CNO Financial Group Position

John Paulson's hedge fund firm Paulson & Co has filed an amended 13D with the SEC regarding shares of CNO Financial Group (CNO).  Per the filing, Paulson now owns 4.7% of the company with just over 10.55 million shares.

This marks a slight decrease of 1.9 million shares in their aggregate common stock exposure since the end of the first quarter.  The filing was made due to activity on June 26th.  Their position includes 5 million shares issuable upon exercise of Warrants.

We covered Paulson's original 13D on CNO in 2009.

Per Google Finance, CNO Financial Group is "a holding company for a group of insurance companies operating throughout the United States, which develops, markets and administers health insurance, annuity, individual life insurance and other insurance products. The Company sells its products through three distribution channels: career agents, independent producers (some of whom sell one or more of its product lines exclusively) and direct marketing. The Company’s operating segments include Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; Other CNO Business, and corporate operations, consisted of holding company activities and noninsurance company businesses."

You can view additional recent portfolio activity from Paulson here.