Marcato Capital Management Adds to Lear Position

Mick McGuire's activist hedge fund Marcato Capital Management has filed an amended 13D with the SEC regarding their stake in Lear (LEA).

Per the filing, Marcato now owns 7.9% of the company with over 6.4 million shares.  This means they've boosted their notional exposure by 750,000 shares since the end of the third quarter.

The fine print indicates they own call options representing 7.6 million shares at prices ranging from $40 to $90 per share and expiration dates ranging from June 2014 to August 2014.  They've also sold puts representing 7.6 million shares with exercise prices ranging from $40 to $65 and the same expiration dates.

The filing was required due to activity on January 23rd.  You can view the exact details of their recent trades here.

We previously highlighted how Marcato disclosed a Lear stake just slightly over a year ago.

Per Google Finance, Lear is "a tier 1 supplier to the global automotive industry. The Company supplies its products to automotive manufacturers with automotive seat systems and related components, as well as electrical distribution systems and related components. The Company has two segments: seating and electrical power management systems (EPMS). The seating segment includes seat systems and related components, such as seat frames, recliner mechanisms, seat tracks, seat trim covers, headrests and seat foam." 

MHR Fund Management Files 13D on Titan International

Mark Rachesky's hedge fund MHR Fund Management has filed a 13D with the SEC regarding Titan International (TWI).  Per the filing, MHR now owns 10.9% of the company with 5.84 million shares.

This is a newly disclosed position and the filing was made due to activity on January 9th.  The position is comprised of both common stock as well as $8.1225 July 2014 call options.

The 13D filing contains the standard boilerplate that MHR intends to seek discussions with management concerning the business and operations of the company.


About MHR Fund Management

If you're unfamiliar with this name, here's what you need to know:  prior to founding MHR Fund Management, Rachesky previously worked as a senior investment officer and managing director to Carl Icahn.  

Rachesky received his B.S. in molecular aspects of cancer from the University of Pennsylvania and an M.D. from Stanford University School of Medicine. Additionally, he also holds an MBA from the Stanford Graduate School of Business.



About Titan International

Per Google Finance, Titan International "through its subsidiaries, is engaged in the manufacturing of wheels and tires. The Company operates in three segments: agricultural, earthmoving/construction and consumer. Titan produces a range of specialty products to meet the specifications of original equipment manufacturers (OEMs) and aftermarket customers in the agricultural, earthmoving/construction and consumer markets. Titan’s earthmoving/ construction market includes wheels and tires supplied to the mining industry, while the consumer market includes products for all-terrain vehicles (ATVs) and recreational/utility trailers. The Company’s customers include AGCO Corporation, CNH Global N.V., Deere & Company and Kubota Corporation."

Corvex Management Starts Activist Signet Jewelers Position

Keith Meister's activist firm Corvex Management has filed a 13D with the SEC regarding Signet Jewlers (SIG).  Per the filing, Corvex now owns 7.8% of the company with over 6.2 million shares. 

This is a newly revealed stake and the filing was required due to activity on January 14th.  As has been customary with Corvex's other recent positions, they've bought both common stock and call options, as well as sold puts. 

It looks like they were buying November 2014 $53 calls and February 2015 $51 calls as well as selling November 2014 $53 puts and February 2015 $51 puts.


Activist Talks

The filing indicates Corvex has already talked with management and found talks to be "constructive." 

Corvex has approached Signet about "options for enhancing shareholder value through various strategic alternatives including, but not limited to, leveraging the Issuer's credit receivables, optimizing capital structure, accelerating M&A and/or return of capital to shareholders, utilizing the Issuer's offshore corporate structure, and general corporate matters."


About Signet Jewelers

Per Google Finance, Signet Jewelers is "a specialty retail jeweler by sales in the United States and United Kingdom, and also has stores in the Republic of Ireland and Channel Islands. The Company is engaged in the retailing of jewelry, watches and associated services. The business is managed as two geographical operating divisions: the US division and the UK division. Its stores trade nationally in malls and off-mall locations as Kay Jewelers (Kay), and regionally under a number of mall-based brands. Destination superstores trade nationwide as Jared The Galleria Of Jewelry (Jared)."

You can view more of Corvex's recent portfolio activity here.

Pershing Square Discloses Platform Specialty Products Stake

In a 13G filed with the SEC, Bill Ackman's hedge fund Pershing Square Capital Management has disclosed a 30.9% ownership position in Platform Specialty Products (PAH) with 33,333,332 shares. 

Ackman's position is broken down into over 28.1 million shares and over 4.1 million shares via October 2016 Warrants.  Pershing owns around 12.5 million warrants and every three warrants gives them the right to buy 1 share of common stock for $11.50.

Longtime followers of Pershing Square will know that this is not a new stake for the hedge fund, but they've disclosed it because PAH is newly listed on the NYSE.  The filing was made due to activity on January 23rd.

Platform was formed with the intent to acquire companies and their first deal was MacDermid, a specialty chemicals manufacturer for $1.8 billion.  Martin Franklin of Jarden (JAH), Nicolas Berggruen of Berggruen Holdings and Ackman's Pershing all own significant Platform stakes.

This isn't the first time Berggruen and Ackman have worked together, either.  While the Platform deal is a bit different, Ackman and Berggruen teamed up on Justice Holdings.  Justice then bought Burger King and relisted the stock, a position Ackman still held at the end of Q3.

Click here for more recent activity from Bill Ackman's fund.

What We're Reading ~ Hedge Fund Links 1/24/14

Where were the best performing hedge funds in 2013? [ai-cio]

JANA Partners targets Juniper, plans to close Nirvana Fund [II Alpha]

Tiger Global snaps up Alibaba shares at lofty valuation [USA Today]

A look at Joshua Resnick's Jericho Capital [II Alpha]

The world's biggest hedge fund had a pretty bad year [NYMag]

Michael Steinhardt is back and he's re-inventing investing again [Forbes]

A look at how Bruce Berkowitz's new hedge fund is doing [CNBC]

Why Bill Fleckenstein is (almost) ready to short stocks [Bloomberg]

For the love of the money [NYTimes]

The 13F spotlight: revealing and concealing hedge fund trades [FINalternatives]

Corsair Capital's Thesis on Alere (ALR): Q4 Letter

Jay Petschek and Steven Major's hedge fund Corsair Capital pitched Alere (ALR) in their Q4 letter.  They feel that the market still has a negative view toward the company despite numerous changes happening.

The company is involved with medical diagnostics and has a huge market share in 'point-of-care rapid tests used in hospitals, clinics and doctors' offices.'

Over the last ten years, the company went on an acquisition binge and basically failed to integrate them properly.  A proxy contest in 2013 led to changes and the company hired Namal Nawana from Johnson & Johnson as COO to change the culture and reduce costs.

Corsair thinks ALR is worth between $70-80 per share if it trades with a multiple in-line with other competitors.  ALR trades around $37 today.

They also note, "Furthermore, if the market doesn't come around and value this business properly, we wouldn't be surprised if, after restructuring the company, (the CEO) looks to sell the company as he did with IMA back in 2001."

Embedded below is Corsair Capital's Q4 letter with their pitch on Alere (ALR):




If you missed it, we've posted up Corsair's past letters as well.

Carl Icahn Pushes For eBay To Spinoff PayPal; Buys More Apple

Activist investor Carl Icahn has been busy yet again.  Firstly, he has disclosed a new position in eBay (EBAY) and he's pushing for the company to spin-off its fast growing PayPal segment.

This is not a new idea.  Plenty of analysts, sell-siders, and portfolio managers have voiced this sentiment before.  However, this might be the first time that a prominent activist has gotten involved and actually tried to make it happen.


Icahn's New eBay Stake

Icahn only owns 0.82% of the company and it looks like his activist push might already be dead on arrival.

Yesterday during eBay's earnings presentation, the company had one specific slide that highlighted why eBay and PayPal should remain together (seen here).

Then today, eBay's Chairman Pierre Omidyar (who owns 8% of the company) tweeted that he and the board were "fully aligned" that eBay and PayPal are best together.  Marc Andreessen tweeted the same.

As such, if Icahn wants to truly push for change, he'll perhaps need to drastically ramp up his ownership stake.  But as some investors have pointed out, perhaps his campaign has been more about awareness than activism.

Talking to Bloomberg, Icahn said he wants to get the word out to shareholders and if he can maybe get 51% of the shareholders to vote that they want it to happen, then maybe the board will take notice.  He did, however, acknowledge that it would be "difficult to convince management." He's also nominated two of his employees to eBay's board.

The video of Icahn's interview is embedded below:




Icahn Buys More Apple

The corporate activist also disclosed activity in another position of his.  This time, he took to Twitter to disclose that he had purchased $500 million more shares of Apple.  Icahn now owns over $3 billion worth of AAPL.

Icahn says that, "We feel (Apple's) board is doing great disservice to shareholders by not having markedly increased its buyback.  In-depth letter to follow soon."

Lee Cooperman Updates Position in Harbinger Group

Lee Cooperman of Omega Advisors has filed a 13G with the SEC regarding his position in Harbinger Group (HRG).

Omega Advisors previously held a stake in Harbinger Group as of the end of the third quarter.  Back then, they owned 6.5 million shares. 

Omega's 13G filed today seems to be updating that stake.  The filing indicates that as of September 26th, the hedge fund firm actually owned 7.6 million shares, or 5.3% of the company. 

Keep in mind that Harbinger Group's Chairman is fellow hedgie Phil Falcone of Harbinger Capital.

Per Google Finance, Harbinger Group is "a holding company. The Company's operations are conducted through Spectrum Brands, the Company's subsidiary, which provides branded consumer products, such as batteries, personal care products, small household appliances, pet supplies, and home and garden pest control products, and Fidelity & Guaranty Life Holdings, Inc. (FGL), its wholly owned indirect subsidiary, which provides life insurance and annuity products. In addition, Salus Capital Partners, LLC (Salus), the Company's wholly owned indirect subsidiary, is engaged in the business of providing secured asset-based loans across a range of industries, and Front Street Re Ltd (Front Street), its wholly owned indirect subsidiary provide reinsurance to the specialty insurance sector of fixed, deferred and payout annuities. The Company also own 97.9% of Zap.Com Corporation (Zap.Com)."

You can see some of Cooperman's more recent stock picks here from an interview.

Senator Investment Group Discloses Trade Street Residential Stake

Doug Silverman and Alex Klabin's hedge fund Senator Investment Group has filed a 13D and Form 3 with the SEC regarding their position in Trade Street Residential (TSRE).

This is a newly disclosed position for the hedge fund and they now own 25.6% of the company with over 9.3 million shares.  The filing was made due to activity on January 16th.

The fine print of the 13D indicates that Senator entered into a Standby Purchase Agreement (on November 12th, 2013) where they would purchase all of the unsubscribed shares of common stock in the issuer's $100 million rights offering to existing shareholders.

Senator also nominated one of their employees to the board of the company.

Per Google Finance, Trade Street Residential is "a full service, vertically integrated, self-administered and self-managed corporation focused on acquiring, owning, operating and managing garden-style and mid-rise apartment communities in mid-sized cities and suburban submarkets primarily in the southeastern United States, including Texas."

You can view some of Senator's past portfolio activity here.

What We're Reading ~ Analytical Links 1/22/14

Trading in the Zone: Maximizing Performance with Focus and Discipline [Ari Kiev]

On the 180 rule and shorting stocks [Dasan]

The bull case on Delta Airlines [SPBaines]

Shinzo Abe on Abenomics 2014 [Reformed Broker]

On why EV/EBITDA is the most effective measure [Greenbackd]

Expert argues now is the time to invest in Europe [FINalternatives]

On the correlation between returns and ridicule [AVC]

Where to find the biggest ideas for your business [Forbes]

Retail store traffic has fallen & may just stay that way [WSJ]

Old Warren Buffett article: the security I like best [Base Hit Investing]

The complete history of Warren Buffett [Dividend]

Report on food and beverage industry in Latin America [ECLAC]

Why Bitcoin matters [Marc Andreessen]

Warren Buffett will give you $1 billion if you fill out a perfect March Madness Bracket [BI]

Greenlight Capital's Q4 Letter: New Positions in Micron, BP, & Anadarko Petroleum

David Einhorn's hedge fund Greenlight Capital returned 19.1% net in 2013.  Greenlight's fourth quarter letter to investors unveils their thesis on new positions in Micron Technology (MU), BP (BP), and Anadarko Petroleum (APC).

Greenlight likes Micron because the industry has started to act a bit more rationally and MU will buyback shares instead of building new factories.

Their BP stake is a play on increasingly shareholder friendly capital allocation policies as well and they think the company is worth $70 per share (it trades around $49 now).  

Additionally, their letter talks about some positions they've closed recently like Airbus Group (formerly EADS), and ThyssenKrupp.

At the end of 2013, Greenlight's largest positions in alphabetical order were: Apple (AAPL), General Motors (GM), Marvell Technology (MRVL), Micron (MU), and Vodafone (VOD).

Thanks to ValueWalk who posted up Greenlight's Q4 letter and you can view it below:




For more on Einhorn, we just yesterday revealed some more of Greenlight's recent portfolio activity.

And for more year-end hedge fund letters, head to Third Point's Q4 letter here.

Lone Pine Capital Starts SBA Communications Position

Steve Mandel's hedge fund firm Lone Pine Capital has disclosed a brand new position in SBA Communications (SBAC).  They filed a 13G with the SEC indicating they own 6.4% of the company with almost 8.2 million shares. The filing was required due to portfolio activity on January 8th.

While this is a new stake, they've had exposure to the wireless tower stock play via their position in Crown Castle International (CCI). 

Their new SBAC position, however, is much larger and it's a bit curious that they would all of a sudden initiate their position now.  The thesis and valuation has largely been unchanged.  

It's also worth highlighting though that SBAC has been a longstanding top position for hedge fund White Elm Capital.  White Elm was founded by Matthew Iorio and before launching his own fund, he worked at Lone Pine.

While the bull case on tower stocks has been a play on the proliferation of wireless data usage, the bear case seemingly hinges on a potential rising interest rate environment and potential consolidation in the wireless carriers.

Per Google Finance, SBA Communications is "an independent owner and operator of wireless communications towers. The Company’s principal operations are in the United States and its territories."

We recently detailed some of Lone Pine's other portfolio activity here.

Third Point Q4 Letter: New Positions in Dow Chemical & T-Mobile

Dan Loeb's Third Point Offshore Fund is out with its fourth quarter 2013 letter.  In it, they reveal performance of 25.2% for the year.

Third Point's Q4 letter outlines their thesis on Dow Chemical (DOW), now their largest position.  They want the company to look into potentially spinning off its petrochemical business and to return capital to shareholders via buyback.

They also detail their thoughts on Ally Financial, a position they've been involved with since 2011 via various plays in the capital structure.  They look for the company to complete an IPO after undergoing a massive restructuring.

Lastly, the hedge fund highlights their thesis on Softbank, Sony (SNE) and T-Mobile (TMUS).  The latter is a brand new position they established during the company's secondary offering at $25 in November.

Embedded below is Third Point's year-end investor letter:




For more on this hedgie, we've also highlighted Third Point's other activity here.

Greenlight Capital Adds to Cairn Energy Stake

David Einhorn's hedge fund Greenlight Capital has added to its stake in London-listed oil and gas exploration company Cairn Energy (LON:CNE). 

Due to trading on January 16th, Greenlight increased their stake from 3% to 4.22% of Cairn's voting rights.  Approximately 20% is held via a total return swap, while the rest is held via common stock.

This stock has largely traded sideways since Greenlight first disclosed a holding in Cairn back in March of 2012.

Per Google Finance, Cairn Energy PLC (Cairn) is "an independent oil and gas exploration and production company. It is organized into two business units: Capricorn Group, being Capricorn Oil Limited and its subsidiary undertakings, and the Cairn India Group. There are two operating segments. Cairn India Limited Group’s operations are primarily within India."

For more on this hedge fund, you can view our previous updates on Greenlight Capital here.

Children's Investment Fund Trims Royal Mail Stake

Christopher Hohn's Children's Investment Fund has recently sized down its holdings of Royal Mail.  Previously, they owned 5.8% and now they own just under 4.6%.  They've sold around 12 million shares.

Royal Mail went public late last year and soared higher.  Children's Investment Fund was a big beneficiary as they were the largest shareholder. 

As such, it looks like Hohn's fund has locked in some profits.  According to fund documents, the firm returned well over 40% in 2013, with Royal Mail obviously contributing to those gains.

Howard Marks on the Role of Luck in Investing: Latest Letter

Oaktree Capital's chairman Howard Marks is out with his latest memo entitled, "Getting Lucky."  It's an interesting missive in which he delves into the role of luck in investing.

Marks writes, "Investment success isn't just a question of whether the investor put together the 'right' portfolio, but also whether it encountered a beneficial environment.  Thus being successful requires a significant degree of luck.  No one gets it right every time.  (That's why even the best investors diversify, hedge and/or limit their use of leverage.)  But the skillful investor is right more often, over a long period of time, than an assumption of randomness would permit.  We say about such investors, 'it can't be luck.'"

Remember, this is a letter that even Warren Buffett regularly reads so you're in good company.

Embedded below is Howard Marks' "Getting Lucky" memo:




You can download a .pdf copy here.

If you missed it, be sure to check out Marks' memo from last month: The Race Is On.

Greenood Investors' Thesis on Fiat (FIATY): Video Presentation

Steven Wood and Greenwood Investors have put together a video detailing their thesis on Fiat (FIATY).  Entitled "The Two Year Honeymoon," they outline why they think Fiat is still one of the best investments they've found.

Four reasons for their bullishness include: a bearish consensus (so they have a variant perception), the product cycle, exceptional management, and valuation at the cycle low.

Rather than type out all the details of their work, we'll let them walk you through their thoughts.  Embedded below is the video of GreenWood's Fiat thesis:



If you missed it, we previously posted Greenwood's thesis on Exor SpA & Fiat as well.

What We're Reading ~ Hedge Fund Links 1/17/14

2014 investor outlook from some top capital allocators [HF Intelligence]

Why invest in hedge funds anymore? [FINalternatives]

Some Tiger Cub performance numbers [II Alpha]

Hedge funds gain over $225 billion in 2013 [ValueWalk]

The extraordinary progress of the hedge fund industry [WorldFinance]

Crispin Odey: this is year for hedge funds not long only [Citywire]

Women hedge fund managers made more money than men in 2013 [IBTimes]

BlueCrest builds a hedge fund empire [BusinessWeek]

A few brave investors scored huge, market-beating wins in 2013 [WSJ]

The most successful strategy for hedgies in 2013: picking right stocks [WSJ]

Former LTCM exec to launch hedge fund industry tracker [FT]

What We're Reading ~ Analytical Links 1/15/14

Investment checklists catch fire [Abnormal Returns]

99% of long-term investing is doing nothing, the other 1% changes your life [Fool]

Research report on LKQ Corp [Prescience Point]

Lessons from short selling [Bronte Capital]

10 predictions for 2014 [FirstAdopter]

5 common investing mistakes you should avoid [Old School Value]

How to become a better investor [Oddball Stocks]

When does a bubble spell trouble? [WSJ]

Fiat's lone poker player needs to find another deal [FT]

After Beam deal, few big liquor mergers left [Dealbook]

Is Google about to make a push into online travel? [Marketwatch]

Time to admit Apple knows exactly what it's doing with its iPhone business [BusinessInsider]

RIA top industry blogs [RIAbiz]

An old profile: the best investor you've never heard of [CNN Money]

Profile of Uber's Travis Kalanick [BusinessInsider]

Farallon Capital Discloses Sycamore Networks Stake

Andrew Spokes' hedge fund Farallon Capital has disclosed a new stake in Sycamore Networks (SCMR). 

Per a 13G filed with the SEC, the hedge fund now owns 9.5% of SCMR with 2.745 million shares.  The filing was made due to portfolio activity on December 31st.

Per Google Finance, Sycamore Networks is "develops and markets intelligent bandwidth management solutions for fixed line and mobile network operators worldwide and provides services associated with such products. The Company’s customers include domestic and international wireline and wireless network service providers, utility companies, enterprises, and government entities. Sycamore’s bandwidth management portfolio of optical switches, multiservice cross-connects and multiservice access platforms serve applications across the network infrastructure, from multiservice access and regional backhaul to the optical core. It also develops and markets a mobile broadband optimization solution for mobile operators to reduce congestion in mobile access networks. The Company’s products serve two market areas within the networking industry, bandwidth management and mobile broadband optimization."