Cantillon Capital Exits The Brink's Company Stake

William von Mueffling's investment firm Cantillon Capital has filed a 13G with the SEC regarding shares of The Brink's Company (BCO).  Per the filing, Cantillon no longer holds any shares.

The filing was made due to activity on December 31st.  Previously, they held over 3 million shares of BCO.

Cantillon used to be a hedge fund, but in around five years ago morphed into a long-only firm.  To learn more about this manager, head to von Mueffling's interview with Columbia Business School.

Per Google Finance, The Brinks Company is "a provider of secure logistics and security solutions services ATM replenishment and maintenance, secure international transportation of valuables and cash management services, to financial institutions, retailers, government agencies including central banks, mints, jewelers and other commercial operations around the world. The Company operates in four geographic segments: Latin America; Europe, Middle East, and Africa (EMEA); Asia Pacific, and North America."

Alex Denner's Sarissa Capital Starts Aegerion Pharmaceuticals Stake

Alex Denner's hedge fund firm Sarissa Capital has filed a 13D with the SEC regarding shares of Aegerion Pharmaceuticals (AEGR).  Per the filing, Sarissa now owns 5.76% of the company with over 1.63 million shares.

Prior to founding Sarissa, Denner worked with Carl Icahn and before that was at Viking Global.  Sarissa's focus is the healthcare/biopharma space.

This is a newly disclosed position as Sarissa did not own any AEGR shares at the end of the third quarter.  The disclosure was made due to portfolio activity on January 30th.  They were out buying primarily in the $23-24 range between January 14th and February 4th.

The activist 13D filing notes that Sarissa intends to engage in discussions with management and has the standard boilerplate under the "purpose of transaction" section.

Per Google Finance, Aegerion Pharmaceuticals is "a biopharmaceutical company dedicated to the development and commercialization of innovative therapies for patients with debilitating rare diseases. The Company’s first product, lomitapide, received marketing approval, under the brand name Juxtapid capsules, from the United States Food and Drug Administration as an adjunct to a low-fat diet and other lipid-lowering treatments in adult patients with homozygous familial hypercholesterolemia (HoFH)."

What We're Reading ~ Hedge Fund Links 2/6/14

Summary of hedge fund stock picks at the Breakers conference [CNBC]

Hedge funds making profits using freedom of information act requests [ValueWalk]

Hedge fund manager Odey turns super bear on QE [WSJ]

Reinsurance, hedge fund tax 'loophole' rule set for the spring [RiskMarketNews]

Ackman to invest in Clearfield Capital hedge fund [Reuters]

Girls who invest would change Wall Street [Bloomberg View]

Tips for successfully marketing a hedge fund [FINalternatives]

Big money looking for smart plays on energy [CNBC]

Pickens' hedge fund to trade on oil panic in fundraise [Bloomberg]

Why invest in hedge funds if they don't outperform? [Forbes]

Short Selling: Cleaning Up After Elephants By Guy Judkowski

Guy Judkowski, managing member of Waterloo International Advisors, LLC, has authored a piece entitled, Short Selling: Cleaning Up After Elephants, An Investor's Guide to Wall Street's Toughest Job.  He released it on his website here.

He co-managed a short-biased hedge fund for 13 years and has published short sell reports for over 20 years.  His piece looks at numerous case studies including Fruit of the Loom (FTL), Alpharma (ALO), Fossil (FOSL), American Italian Pasta (AIPC), Serologicals (SERO), Orthodontic Centers of America (OCA), Safeskin (SFSK).

Additionally, he highlights certain metrics and patterns to look for in shorts. 

Embedded below is the short selling guide, Cleaning Up After Elephants:



You can download the .pdf here.

Viking Global Boosts Cheniere Energy, Kansas City Southern Stakes

Andreas Halvorsen's hedge fund firm Viking Global has filed two 13G's with the SEC regarding some of their existing positions.


Viking Adds to Cheniere Energy Stake

First, Viking has revealed a 6.5% ownership stake in Cheniere Energy (LNG) with over 15.3 million shares.

This marks an increase of over 9.9 million shares in their position size since the end of the third quarter.  The filing was made due to portfolio activity on January 26th.

Per Google Finance, Cheniere Energy is "engaged in liquid natural gas LNG-related businesses. The Company owns and operates the Sabine Pass LNG terminal in Louisiana through its 59.5% ownership interest in and management agreements with Cheniere Energy Partners, L.P. The Company also also own and operate the Creole Trail Pipeline, which interconnects the Sabine Pass LNG terminal with natural gas markets in North America."


Increases Kansas City Southern Position

Second, Halvorsen's firm has also disclosed a 5% ownership stake in Kansas City Southern (KSU) with over 5.56 million shares.

They've boosted their position size by over 1.3 million shares since the end of the third quarter.  This activity was reported due to activity on January 27th.

Per Google Finance, Kansas City Southern is "a transportation holding company with domestic and international rail operations in North America that are strategically focused on the growing north/south freight corridor connecting key commercial and industrial markets in the central United States with industrial cities in Mexico."

You can view other recent portfolio activity from Viking here.

What We're Reading ~ Analytical Links 2/4/15

Dead companies walking: How a hedge fund manager finds opportunity [Scott Fearon]

Seth Klarman on what he's learned from Warren Buffett [FT]

On mindfulness, meditation and investing [Abnormal Returns]

The future of iron ore [Joe Magyer]

FCC Chairman: this is how we will ensure net neutrality [Wired]

Monetary policy: the great illusion [CapX]

Inside the studio where ESPN is betting billions on the future of sports [The Verge]

On Disney's Bob Iger and Apple's Steve Jobs [Fortune]

Here's why Netflix stock is so volatile [MicroFundy]

How Berkshire can survive beyond Warren Buffett [Stanford]

Study says 'boring' stocks generate better returns [Marketwatch]

On Keynes the stock market investor [SSRN]

Chipotle: the definitive oral history [Bloomberg]

The Chipotle effect: why America is obsessed with fast casual [Washington Post]

Inside RadioShack's slow motion collapse [Bloomberg]

Google is developing its own Uber competitor [Bloomberg]

On declining lethality [NYTimes]

Berkowitz's Fairholme Fund Annual Report: AIG, Bank of America, Fannie/Freddie

Bruce Berkowitz is out with his Fairholme Fund's (FAIRX) annual report for 2014.  The concentrated investor outlines his thoughts on AIG (AIG), Bank of America (BAC), Fannie Mae & Freddie Mac, Sears (SHLD), Leucadia (LUK), and St. Joe (JOE).

Berkowitz dedicates the majority of his letter to his Fannie & Freddie investments, saying that, "Today, Washington bureaucrats are unlawfully holding these profitable companies captive in perpetual conservatorship."

Regarding his two largest positions (AIG and BAC), Fairholme's manager says that both need to "prove that core operations are capable of earning an average of 10% return on equity and demonstrate that such profits are distributable to shareholders.  We anticipate growing profits, dividends, and buybacks from both in the future, particularly when interest rates normalize."

Embedded below is the Fairholme Fund's annual report for 2014:



For more from this manager, be sure to also check out Berkowitz's Wealthtrack interview.

Graham & Doddsville Interview With Bill Ackman & More

The latest issue of Graham & Doddsville is out.  This new edition of the student investment newsletter of Columbia Business School features interviews with Pershing Square's Bill Ackman, Corsair Capital's Jay Petschek and Steve Major, as well as Lyrical Asset Management's Andrew Wellington.

Additionally, the publication showcases student stock pitches on the likes of CDK Global (CDK), Schibsted Media (SCH:NO), JetBlue (JBLU), and First Solar (FSLR).


Highlights From Bill Ackman's Interview

On running a concentrated portfolio: "I'm a big believer in concentration.  But it's not just analysis that protects you, it's the nature of the things you invest in.  If you invest in super high quality, durable, simple, predictable, free cash flow generating businesses, that should protect you as well.  If you pay a fair to cheap price for businesses of that quality, I think it's hard to lose a lot of money.  The key is you have to be a good analyst in order to determine whether it truly is a great business.  You have to really understand what the moats are.  You have to understand the risk of technological entrants."

On position sizing:  "We size things based on how much we think we can make versus how much we think we can lose.  We'll probably be willing to lose 5-6% of our capital in any one investment."

On testing conviction: "One of the best ways to get confidence in an idea is to find a smart person who has the opposing view and listen to all of their arguments."


Embedded below is the latest issue of Graham & Doddsville:



You can download a .pdf copy here.

If you missed past issues of this great newsletter, be sure to also check out their interview with Maverick Capital's Lee Ainslie as well as their interview with Wally Weitz.

Final Chance to Attend Next Week's NY Single Family Office Summit

I just wanted to give you a quick reminder that there is only a week left before the Single Family Office Summit in New York on February 9th.

Market Folly has secured an extra 5 discounted tickets so you can attend this full-day conference for just $797 using the discount code "SFO" here: http://WilsonConferences.com/SFO or you can call (212) 729-5067 to complete your reservation over the phone.

See you at the Summit,

Richard

Richard C. Wilson
CEO & Founder
The Family Office Club: http://FamilyOffices.com
Live Conferences: http://WilsonConferences.com/SFO

The Art of Value Investing: Talks at Google Presentation

John Heins and Whitney Tilson published a book a while ago entitled The Art of Value Investing: How the World's Best Investors Beat the Market.  It's basically a compilation of great quotes from tons of prominent hedge fund managers about a variety of topics on investing.

Featured as part of the Talks at Google series, the two gentlemen gave a presentation at Google about the book, investing, and a look at Google stock as well.

Embedded below is the video of The Art of Value Investing at Talks at Google:



If you haven't read it, The Art of Value Investing is a great book full of wisdom from a ton of investors that have been featured on Market Folly over the years.

Lee Cooperman Trims SandRidge Energy & New Residential Stakes; Adds to THL Credit

Omega Advisors' Lee Cooperman has filed a myriad of amended 13G's with the SEC as of late.  We covered some of his recent portfolio activity here.  In other recent moves, Cooperman was out trimming 2 stakes, and adding to another.


Trims SandRidge Energy

First, Omega Advisors has reduced its position in SandRidge Energy (SD) by over 13.3 million shares since the end of the third quarter.  Per the 13G filed with the SEC, Cooperman now owns just over 32.1 million shares.  This was made due to activity on December 31st.

Per Google Finance, SandRidge Energy is "an oil and natural gas company. The Company focuses on exploration and production activities in the Mid-Continent region of the United States. The Company also operates businesses and infrastructure systems, including gas gathering and processing facilities, marketing operations, a saltwater disposal system, an electrical transmission system and a drilling rig and related oil field services business."


Cuts New Residential Stake

Next, the hedge fund manager also cut his exposure to New Residentail Investment Corp (NRZ).  After selling over 3.8 million shares, he's left owning over 7.97 million shares.  The filing was also made due to activity on December 31st.

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


Adds To THL Credit Position

Last, Cooperman also disclosed he has added to his THL Credit (TCRD) position.  After buying over 1.1 million more shares, he now owns over 2.11 million shares of the company.  The 13G was filed due to activity on December 31st.

Per Google Finance, THL Credit is "a non-diversified, closed-end management investment company. It operates as a business development company. The Company’s investment objective is to generate both current income and capital appreciation, primarily through investments in privately negotiated debt and equity securities of middle market companies. The Company is a direct lender to middle market companies and invest in subordinated, or mezzanine, debt and second lien secured debt, which may include an associated equity component such as warrants, preferred stock or other similar securities."

Don't forget you can see the rest of Cooperman's recent portfolio activity here.

Paul Singer's Interview at the Dealbook Conference

If you missed it, Elliott Management's Paul Singer sat down with Andrew Ross Sorkin at the Dealbook Conference a few months ago to talk about the global investment landscape.

Embedded below is the video of Paul Singer's talk:

Discounted Admission to February's Single Family Office Summit in NYC

By: Richard Wilson

Hello,

Next month, family offices will gather in Manhattan for the Annual Single Family Office Summit on February 9th.  Market Folly has secured 5 special discounted tickets to attend the full-day catered conference for only $797.  To claim one of these discounted seats, simply enter the discount code "SFO" on the order form here: http://WilsonConferences.com/SFO

The Single Family Office Summit is held at the Marriott East Side on February 9th and features more than a dozen single family offices speaking on the most important topics of wealth management, allocation decisions, and institutional investing.  If you want to look through the brochure you can do so here: http://WilsonConferences.com/SFO-Brochure

Who will be attending?

This event attracts institutional investors, family office executives, private equity dealmakers, investment fund managers, high-net-worth individuals, and a variety of family office industry advisors.  The conference combines live networking with a variety of insightful panels and presentations on issues facing single family offices and family advisors.

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The Single Family Office Summit is your annual opportunity to meet face-to-face with family offices, network with peers that are working in the family office industry, gain valuable insights on the market and allocation strategies, and build real relationships that move the needle in your business or family office.  The single most common feedback from attendees is "I should have brought more business cards" because the Single Family Office Summit places an emphasis on actually meeting your fellow attendees and speakers.

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Richard

Richard C. Wilson
CEO & Founder
The Family Office Club: http://FamilyOffices.com
Live Conferences: http://WilsonConferences.com/SFO

Farallon Capital Discloses KLX Position (Spin-Off From B/E Aerospace)

Andrew Spokes' hedge fund firm Farallon Capital has filed a 13G with the SEC regarding shares of KLX Inc (KLXI).  Per the filing, Farallon now owns 7% of the company with 3,675,000 shares.

This is a newly disclosed equity position for the firm and the filing was made due to activity on January 16th.  KLX was recently spun-off from B/E Aerospace (BEAV) and BEAV shareholders received 1 KLXI share for every 2 BEAV shares held.

Given that Farallon didn't own BEAV as of the end of the third quarter, they either bought BEAV in the fourth quarter and then received KLXI shares in the spin-off, or they just purchased KLXI straight up once it was separated.

Per Google Finance, KLX is "the distributor and service provider of aerospace fasteners and consumables. The Company offers ranges of aerospace hardware and consumables, and inventory management services across the world. The Company operates in two segments: Aerospace Solutions Group (ASG) segment and Energy Services Group (ESG) segment. Its customers include oil and gas companies that are engaged in the exploration, and production and development of oil and gas properties. The Company through its network and information technology systems offer services to commercial airliners, business jet and defense original equipment manufacturer (OEMs) and its subcontractors, airlines, and maintenance, repair and overhaul (MRO) operators. The Company provides access to over one million stock keeping unit (SKUs). Its systems support both internal distribution processes, along with customer services, including just-in-time deliveries and kitting solutions."

JANA Partners Trims PetSmart Stake Again

Barry Rosenstein's activist hedge fund JANA Partners has filed another amended 13D with the SEC regarding their position in PetSmart (PETM).  Per the filing, JANA now owns 5.1% of the company with over 5.05 million shares.

This is the second time they've cut their position size in January.  After dropping their stake from 9.69 million shares down to 7.6 million, they've now reduced it further to 5.05 million.  The filing was made due to activity on January 22nd.

PetSmart is set to be acquired by BC Partners in an $8.7 billion deal, so perhaps JANA is reducing exposure to what has become an arbitrage play in order to free up capital to deploy into other opportunities. 

We've also posted up other portfolio activity from JANA this month as well.

Oaktree Capital Files 13G on Century Communities

Howard Marks' distressed focused firm Oaktree Capital has filed a 13G with the SEC on shares of Century Communities (CCS).  Per the filing, Oaktree now owns 5.9% of the company with 1,278,091 shares.

This is a newly revealed equity stake and the filing was made due to activity on January 16th. 

For more from this hedge fund's founder, be sure to check out Howard Marks' latest letter.

Per Yahoo Finance, Century Communities is "engaged in homebuilding activities primarily in metropolitan markets in Colorado."

Peltz's Trian Fund Trims Family Dollar Stake

Nelson Peltz's activist investment firm Trian Fund Management has filed an amended 13D with the SEC regarding their position in Family Dollar (FDO).  Per the filing, Trian now owns 2.07% of the company with over 2.36 million shares.

This means they've reduced their position size by over 6 million shares since the end of the third quarter.  The filing was made due to activity on January 26th. 

FDO recently agreed to a deal with Dollar Tree (DLTR) and Trian has already reduced its investment.

Lee Cooperman Starts 2 New Stakes, Adds To 4 Positions, Trims Another

Omega Advisors' Lee Cooperman filed a myriad of amended 13G's with the SEC recently.  Here's the breakdown:


Starts 2 New Positions: Aspen Group & Arbor Realty Trust

The hedge fund manager has revealed newly bought stakes in two companies: Aspen Group (ASPU), an online education company, and Arbor Realty Trust (ABR), a specialized real estate finance company.  Both positions were disclosed due to activity on December 31st, 2014.

Cooperman now owns 7.11% of Aspen Group with 8 million shares and owns 7.53% of Arbor Realty Trust with over 3.77 million shares.


Adds to Altisource Portfolio Solutions, Calls Out Management

Also, Cooperman has filed a 13G, Form 3, and multiple Form 4's with the SEC regarding Altisource Portfolio Solutions (ASPS).  He disclosed an ownership stake of 11.14% of the company with over 2.25 million shares as of December 31st, 2014.  This means he's increased his position by almost a million shares since the end of the third quarter.

The Form 4 indicates that Cooperman bought ASPS shares at weighted average prices of $47.47 and $39.42 on December 19th and 22nd, respectively.

Shares of ASPS currently trade around $22 after the company has been hit with regulatory scrutiny as the New York Department of Financial Services (DFS) came down hard on ASPS's biggest customer, Ocwen Financial (OCN), and in turn ASPS as well.  Both companies were part of Bill Erbey's empire and as part of the settlement with the DFS, Erbey will step down from his posts at both companies.

Cooperman also recently appeared on a company conference call and lashed out at management for poor capital allocation decisions, asking "what I'm trying to figure out to be honest with you ... whether your testicles are bigger than your brains or your brains are bigger than your testicles."

The company bought back a ton of stock at much higher prices (around $104 per share) during the period of regulatory scrutiny, only to see their shares plummet much further down to current levels of around $22. 

Numerous hedge funds have been involved in ASPS and OCN shares and it will be interesting to see who held on through the carnage, who exited, and who might have picked up shares as a distressed play at the end of 2014.  Unfortunately, it will be another 3 weeks until those disclosures (Q4 13F filings) are submitted to the SEC.

At the end of the third quarter, the largest holders of ASPS were Luxor Capital, Omega Advisors, White Elm Capital, among others.  Top OCN holders included Pennant Capital, Highfields Capital, Baupost Group, Kingstown Capital, Own Creek Asset Management, White Elm Capital, among others.  Since the end of the third quarter, OCN is down 72% and ASPS is down 78%.


Adds to Atlas Energy & Atlas Pipeline Stakes

Next, the Omega Advisors founder has been out buying shares of Atlas Energy (ATLS).  Per the 13G filing, Cooperman now owns over 7 million shares (an increase of over 2.9 million shares since the end of the third quarter).

Additionally, he has also increased his exposure to Atlas Pipeline Partners (APL) and now owns over 7.45 million shares (compared to the 3.34 million he owned at the end of the third quarter).


Increases Gulf Coast Ultra Deep Royalty Trust Exposure

Next, Cooperman has disclosed an increased position in Gulf Coast Ultra Deep Royalty Trust Units (GULTU).  He previously owned 16.9 million shares but now owns 22.22 million, an increase of over 5.3 million shares since the end of the third quarter.


Slightly Trims Chimera Investment Corp Stake

Lastly, Cooperman disclosed in another 13G that he has ever-so-slightly reduced his stake in Chimera Investment Corp (CIM) by a minor 168,645 shares.  He still retained a position of over 64.3 million shares at the end of 2014.

For more of Cooperman's recent portfolio activity, head here.

Bridger Capital Starts Arrowhead Research Stake

Roberto Mignone's hedge fund firm Bridger Capital has filed a 13G with the SEC regarding shares of Arrowhead Research (ARWR).  Per the filing, Bridger now owns 5.5% of the company with over 2.98 million shares.

This is a newly disclosed equity position for the hedge fund and the SEC filing was made due to activity on January 13th.

Per Google Finance, Arrowhead Research is "a biopharmaceutical company developing targeted RNAi therapeutics. The Company is leveraging its drug delivery technologies to develop drugs based on the RNA interference mechanism that silences disease-causing genes. Arrowhead technologies also enable partners to create peptide-drug conjugates that specifically home to cell types of interest while sparing off-target tissues. Arrowhead’s pipeline includes clinical programs in chronic hepatitis B virus and partner-based programs in obesity and oncology. ARC-520 is an RNAi-based therapeutic designed to treat chronic hepatitis B virus (HBV) infection. Arrowhead’s anti-obesity drug candidate, Adipotide, selectively destroys the blood supply that supports the growth of unhealthy fat by the targeted induction of apoptosis (cell death) in the vasculature of adipose tissue. In April 2012, the Company acquired Alvos Therapeutics, Inc."

Richard Gerson's Falcon Edge Capital Discloses Tekmira Pharma Stake

Richard Gerson's hedge fund firm Falcon Edge Capital has filed a 13G with the SEC regarding shares of Tekmira Pharma (TKMR).  Per the filing, Falcon Edge now owns 9.9% of the company with over 2.22 million shares.

This is a newly disclosed equity position for the hedge fund and the filing was due to activity on January 12th.  Tekmira recently bought OnCore Biopharma, creating a company focused on creating Hepatitis B treatments.

Prior to founding Falcon Edge, Gerson worked with John Griffin at Blue Ridge Capital, a fund the site has tracked for many years.

Per Google Finance, Tekmira Pharma is "a biopharmaceutical company focused on advancing ribonucleic acid (RNA) interference (RNAi) therapeutics and providing its lipid nanoparticle (LNP) delivery technology to pharmaceutical and biotechnology partners. Its product candidates include TKM-HBV, TKM-PLK1, TKM-Ebola and TKM-Marburg. TKM-HBV is an RNAi therapeutic for the treatment of Hepatitis B infection. The Company’s lead oncology product candidate, TKM -PLK1 is an oncology product platform that targets polo-like kinase 1 (PLK1), a protein involved in tumor cell proliferation and a validated oncology target. TKM-ALDH2 is an application of RNAi for alcohol use disorder with a target patient population who have moderate to severe alcohol use disorder. TKM-Ebola is an anti-Ebola viral therapeutic being developed under a contract with the United States Department of Defense Joint Project Manager Medical Countermeasure Systems. TKM-Marburg is used to treat hemorrhagic fever viral infections.."