ValueAct Capital Boosts Seagate Position

Jeff Ubben's activist investment firm ValueAct Capital has filed a 13D with the SEC regarding its stake in Seagate Technology (STX).  Per the filing, ValueAct now owns 7.2% of the company with 21 million shares.

The filing notes they've had talks with officers and directors of the company and will continue to do so.  ValueAct was buying on July 29th, 31st as well as August 1st, 2nd, 3rd, 4th, 7th, 8th, and 9th.  In total, they purchased 7,184,235 shares in a range between $32.19 and $33.50. 

We've highlighted how recently ValueAct has been trimming numerous positions, and it looks like this is where some of the proceeds ended up.

Per Google Finance, Seagate is "a provider of electronic data storage technology and solutions. The Company's principal products are hard disk drives (HDDs). In addition to HDDs, it produces a range of electronic data storage products, including solid state hybrid drives, solid state drives, peripheral component interconnect express (PCIe) cards and serial advanced technology architecture (SATA) controllers. Its storage technology portfolio also includes storage subsystems and high performance computing solutions. Its products are designed for applications in enterprise servers and storage systems, client compute applications and client non-compute applications. It designs, fabricates and assembles various components found in its disk drives, including read/write heads and recording media. Its design and manufacturing operations are based on technology platforms that are used to produce various disk drive products that serve multiple data storage applications and markets."

Hedge Fund Links ~ 8/11/17

Risks are rising while low risks are discounted [Ray Dalio]

Activist hedge funds target bigger and bigger US companies [CNBC]

Sustainability of hedge fund reinsurers questioned [Business Insurance]

Mega hedge funds are reporting big gains [Bloomberg]

A look at Michael Hintze of CQS [AFR]

Lessons from a trading great: Stanley Druckenmiller [Macro Ops]

Paulson & Co Trims Valeant Pharmaceuticals Stake

John Paulson's hedge fund firm Paulson & Co has filed a 13D with the SEC regarding its stake in Valeant Pharmaceuticals (VRX).  Per the filing, Paulson & Co now owns 6% of VRX with 20.83 million shares (but note this excludes cash-settled swaps representing economic exposure comparable to 259,500 additional shares of common stock).

This means they reduced their position size by just under one million shares since June when they previously disclosed a prior sale as well.  The latest filing was made due to portfolio activity on August 9th and they sold at $14.6595.

We've highlighted other recent portfolio activity from Paulson & Co here.

Per Google Finance, Valeant Pharmaceuticals is "a pharmaceutical and medical device company. The Company is engaged in developing and marketing a range of branded, generic and branded generic pharmaceuticals, over-the-counter (OTC) products, and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment, and aesthetics devices). It operates through two segments: Developed markets and Emerging markets. In the Developed Markets segment, it focuses on the areas of dermatology, neurology, gastrointestinal disorders, and eye health therapeutic classes. In the Emerging Markets segment, it focuses on primarily on branded generics, OTC products and medical devices. Its pharmaceutical products include Xifaxan, Solodyn and Glumetza. Its OTC products include PreserVision, Biotrue and Boston. Its other generic products include Latanoprost and Metronidazole. Its ophthalmic surgical products include intraocular lenses, such as Akreos, enVista, Crystalens and Trulign."

ValueAct Capital Buys Some Trinity Industries, Sells Some Willis Towers Watson

Jeff Ubben's activist firm ValueAct Capital has filed two Form 4's with the SEC.


ValueAct Acquires Some Trinity Industries Shares

First, they've purchased more Trinity Industries (TRN) according to their SEC filing.  On August 7th, 8th, and 9th they acquired a total of 60,819 shares at prices of $28.3, $28.5, and $28.47.  After these buys, ValueAct now owns over 15.96 million TRN shares.

Per Google Finance, Trinity Industries is "a diversified industrial company that owns businesses providing products and services to the energy, chemical, agriculture, transportation and construction sectors. The Company's products and services include railcars and railcar parts; parts and steel components; the leasing, management and maintenance of railcars; highway products; construction aggregates; inland barges; structural wind towers; steel utility structures; storage and distribution containers, and trench shields and shoring products. The Company's segments include the Rail Group, Construction Products Group, Inland Barge Group, Energy Equipment Group, Railcar Leasing and Management Services Group, and All Other. Its All Other segment includes its captive insurance and transportation companies, and other peripheral businesses. It manufactures a line of railcars, including autorack cars, box cars, covered hopper cars, gondola cars, intermodal cars, open hopper cars and tank cars."


Ubben's Firm Trims Willis Towers Watson Stake

Second, ValueAct has sold some Willis Towers Watson (WLTW) according to a separate Form 4 filed with the SEC.  On the same dates (August 7th through 9th), Ubben's firm sold 820,000 shares of WLTW at prices of $149.78, $149.76, and $149.53.  After these sales, ValueAct still owns over 5.78 million WLTW shares.

Per Google Finance, Willis Towers Watson is "a holding company. The Company operates as a global advisory, broking and solutions company. It is engaged in offering risk management, insurance broking, consulting, technology and solutions, and private exchanges. The Company operates through eight segments: Willis International; Willis North America; Willis Capital, Wholesale & Reinsurance (CWR); Willis GB; Towers Watson Benefits; Towers Watson Exchange Solutions; Towers Watson Risk and Financial Services; and Towers Watson Talent and Rewards. The Willis GB segment comprises four business units: Property and Casualty, Transport, Financial Lines and Retail Networks. The Willis Capital Wholesale and Reinsurance segment includes Willis Re; Willis Capital Markets & Advisory; Willis' wholesale business, and Willis Portfolio Underwriting Services. The Willis North America segment provides risk management, insurance brokerage and related risk services."

We just touched on some other portfolio activity from ValueAct yesterday as well.

Fairholme Capital Reduces Sears Canada Position

Bruce Berkowitz's investment firm Fairholme Capital has filed an amended 13D regarding shares of Sears Canada (SRSC).  Per the filing, Berkowitz now owns 18.7% of SRSC with just over 19 million shares.

This is a decrease of over 2.39 million shares since the end of July when Fairholme reported owning over 21.43 million SRSC shares. 

The latest portfolio activity comes in late July and early August as Fairholme sold shares as high as $0.61 and as low as $0.25.  After this round of sales, Fairholme still owns 19 million SRSC shares.

We've covered other recent portfolio activity from Fairholme Capital here.

What We're Reading ~ 8/9/17

Hot stock rally tests the patience of a choosy lot: value investors [WSJ]

Buffett nears a milestone he doesn't want: $100 billion in cash [Bloomberg]

User/subscriber economics: value dynamics [Aswath Damodaran]

How China's DiDi is taking over the world before Uber [Forbes]

Flywheel effect: why positive feedback loops are a meta-competitive advantage [Medium]

Tesco: why Amazon will not kill this business [Contrarian Edge]

US credit card debt surpasses record set at brink of crisis [Bloomberg]

If retail is dying, why is money pouring into malls? [Bloomberg]

When will the tech bubble burst? [NYTimes]

The problem with meal kits [WSJ]

How credit raters avoided reform after the financial crisis [Bloomberg]

Profile of Vineyard Vines [Boston Magazine]

Have smartphones destroyed a generation? [The Atlantic]

Ruane Cunniff (Sequoia Fund) Investor Day Transcript 2017

Ruane, Cunniff & Goldfarb recently released the transcript from their investor day a few months ago.  Known as the managers of the Sequoia Fund, David Poppe and his team talk about many of their investments.

As of the end of June, their top ten holdings were:

Berkshire Hathaway (BRK A / BRK B) 11.28%
US Treasury Bills & Cash 8.65%
MasterCard (MA) 7.72%
Alphabet (GOOGL & GOOG) 6.5%
TJX (TJX) 5.93%
Dentsply Sirona (XRAY) 5.3%
Carmax (KMX) 5.04%
Constellation Software (CSU) 4.83
Rolls Royce (RR.LN) 4.74%
Liberty Media Corp 4.13%

They talked about what they often find in their top investments:

"Hopefully that gives you a sense of the kinds of companies we want to buy: high-quality enterprises trading at discounts to their intrinsic value, with long-duration growth opportunities.  I would note that every great outperformer we have purchased during my eighteen years here - from Fastenal to Idexx to Mastercard to O'Reilly to Precision Castparts to Sirona to TJX - had something in common.  And it was not a low P/E at the time we first invested.  It was a long growth runway and, most often, a long organic-growth runway."

The transcript that follows touches on their thoughts on Priceline.com (PCLN), the threat of Amazon (AMZN) to various businesses, and some of their holdings like TJX and O'Reilly Auto, as well as other positions like Rolls Royce and Charles Schwab.

Embedded below is Sequoia Fund / Ruane Cunniff's 2017 Investor Day Transcript:




You can download a .pdf here.

For more from this firm, you can view their transcript from last year here as well.

ValueAct Capital Reduces Microsoft Stake

Jeff Ubben's activist investment firm ValueAct Capital has filed a Form 4 with the SEC regarding its stake in Microsoft (MSFT). 

Per the filing, ValueAct sold 7 million shares in total across August 4th, 7th, and 8th.  ValueAct sold at prices of $72.50 and $72.61.

The firm has also been selling down other positions in recent months as well.

Per Google Finance, Microsoft is "develops, licenses, and supports a range of software products, services and devices. The Company's segments include Productivity and Business Processes, Intelligent Cloud and More Personal Computing. The Company's products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; video games, and training and certification of computer system integrators and developers. It also designs, manufactures, and sells devices, including personal computers (PCs), tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories, that integrate with its cloud-based offerings. It offers an array of services, including cloud-based solutions that provide customers with software, services, platforms, and content, and it provides solution support and consulting services."

Hedge Fund Links ~ 8/4/17

Excerpts from Highfields Capital's letter [Business Insider]

Steve Eisman says financial system 'safe' but worried about Europe's banks [Business Insider]

Thoughts from Dan Loeb on Third Point Re's conference call [CNBC]

Hedge funds turn to dark web to gain an edge [FnLondon]

Paul Tudor Jones clients pull 15% from main hedge fund [Bloomberg]

Fledgling quant funds seek to disrupt Wall Street [FT]

Pershing Square Builds Automatic Data Processing Stake

Recently, Bloomberg reported that Bill Ackman's activist firm Pershing Square Capital Management had built a stake in Automatic Data Processing (ADP).  Then today, Ackman told CNBC that he's "still buying the stock as of this morning" and that he is "not seeking control of the company."

Per Ackman's recent interview, he feels the company can expand profit margins by more than 50%.  Pershing now reportedly owns 8% of the company mainly via derivatives.

Apparently, Ackman was seeking to push back the board nomination window.  ADP responded: "The Board has unanimously determined that it is not in the best interests of ADP or its other shareholders to accede to Pershing Square's last-minute request for an extension."

ADP also appeared to take a dig at Pershing in its statement as well: "Since Carlos Rodriguez became CEO nearly six years ago, ADP's total shareholder return of 202% is well in excess of the S&P 500 TSR of 128% - and is many multiples of Pershing's TSR of 29%."

For more on this fund, we've also highlighted other recent portfolio activity from Pershing Square here.

Per Google Finance, Automatic Data Processing is "a provider of human capital management (HCM) solutions to employers, offering solutions to businesses of various sizes. The Company also provides business process outsourcing solutions. Its segments include Employer Services and Professional Employer Organization (PEO) Services. The Employer Services segment offers a range of human resources (HR) business process outsourcing and technology-enabled HCM solutions. These offerings include payroll services, benefits administration, talent management, HR management, time and attendance management, insurance services, retirement services, and tax and compliance services. ADP TotalSource, ADP's PEO business, offers small and mid-sized businesses a HR outsourcing solution through a co-employment model. As a PEO, ADP TotalSource provides HR management services while the client continues to direct the day-to-day job-related duties of the employees."

Alex Roepers Interview With Capitalize For Kids

Alex Roepers of Atlantic Investment Management sat down with Capitalize For Kids for their Investor Series and talks about his strategy for beating the market while holding only six stocks.  Here's a few excerpts:


On the current markets:  "From a 40,000 foot level,you know the 10-year treasury yield is around 2.4%, while the S&P 500 dividend yield is around 2.1% and the earnings yield is about 5%, based on an index P/E of 17x. So we see the market as not overly cheap for sure but also not overly expensive. The continued low interest environment remains supportive for the overall market.

Within the market of course, you have many different pockets – it is a bit of a barbell, bifurcated market. On one hand, you have Tesla and the other story stocks that have a cult following and valuations that we think make absolutely no sense. On the other hand, you have many overlooked but solidly profitable companies who have little or no top-line growth, such as General Motors, automotive suppliers, airlines and retailers.We would say the market is full of interesting opportunities, long and short. It is ok on balance as long as rates remain reasonable."




On one of his top holdings Commscope (COMM): "(COMM is) a $5 billion integrated manufacturer of end-to-end solutions connecting wired and wireless networks, including networking equipment like antennas as well as coaxial and fiber optic cables. Solid secular growth is rooted in increased use of streaming data, video and movies and increased use of smart phones and internet mobility in general. Foreign sales are 50% and increasing due to growth in less mature markets, both developed and emerging, which require improved bandwidth and connectivity. We see it as a solid business. Key customers include Comcast, Verizon, AT&T,Charter Communications, Anixter and Liberty Media.

We started scaling into CommScope last October around $30/share. From there, the shares rallied to $42, up by 40% within 6 months. We were trimming along the way to keep the position in check as a percentage of capital. Then, in early May, due to a reduced forecast for Q2-2017, for reasons we deem to be transitory, Commscope shares were knocked down to $35, where we added back the shares we had sold on strength previously.  We see the shares reaching $50 in the next 6 to 12 months on reasonable earnings and valuation assumptions. Given our analysis CommScope has solid downside support here,compelling upside on its own and also takeover potential."



On overlooked value play Diebold Nixdorf (DBD): "They are a leading maker of automated teller machines (ATM) as well as electronic point-of-sale (EPOS) solutions for the retail market. In ATM’s, NCR and Hyosung are key competitors and in the retail vertical it is IBM-Toshiba and NCR mostly.  There are some 3.3 million ATMs installed worldwide, one third of which are Diebold Nixdorf’s.

A key concern is that the proliferation of electronic payments will cause a reduced need for the use of ATM’s. We believe that this concern is overblown as cash transactions and notes in circulation continue to grow even in the United States and Europe.  ATMs remain a productivity tool for banks and an integral part of their customer interaction.While there has been a lot of consolidation of bank branches, the total ATM count in mature markets has actually been stable and now we see the overall banking sector is improving which bodes well for new and upgraded ATMs. The installed base is an important barrier to entry and key driver of business.  About 60% of Diebold Nixdorf’s sales come from maintenance services and software.

In the past two years, Diebold shares had fallen from $40 down to the low twenties. Besides a recent earnings warning in what is “year one” of a transformational merger, another key reason behind the share price weakness was a spell of declining capital spending by banks. The transformational deal was to buy a key competitor called Wincor Nixdorf out of Germany. Wincor, which was sold by Siemens to private equity in 1999, and subsequently listed in2004, generates $2.5 billion in sales, $1.5 billion from ATMs and $1 billion from retail point of sale systems (POS) used by retailers like Ikea, Zara and H&M. The cross-border deal took a year before it closed in August of last year, during which NCR and others took advantage of the uncertainty and inability by the two merger companies to react.  We see significant potential from combining the complementary footprints and capabilities ...  we see Diebold Nixdorf shares reaching over $40/share in 18-24 months, based on 11-12x our 2020 EPS target."


He also gives updates on Harman (HAR) and Owens-Illinois (OI) and chats about other topics.  You can read the rest of the interview here.

What We're Reading ~ 8/2/17

Profile of the founders of payments company Stripe [Bloomberg]

Staying competitive as the world changes [Collaborative Fund]

The unreformed stock picker: profile of Bill Miller [Forbes] 

Investment case for Gilead Sciences [WertArt Capital]

Netflix has $20 billion in debt - can it keep borrowing its way to success? [LA Times]

Palantir, the 'special ops' tech giant that wields as much power as Google [The Guardian]

Craft beer, brought to you by Big Beer [NPR]

On the threat of European grocery discounters [FBIC Group]

Priceline: the world's largest online travel company [Economist]

Electric vehicle outlook [Bloomberg]

Mental models: how to train your brain to think in new ways [James Clear]

The best path to long-term change is slow, simple and boring [NYTimes]

The 4 keys to learning anything [Zen Habits]
 

Lone Pine Capital Starts TransUnion Position

Steve Mandel's hedge fund firm Lone Pine Capital has filed a 13G with the SEC regarding shares of TransUnion (TRU).  Per the filing, Lone Pine now owns 5.1% of TRU with over 9.29 million shares.

This is a newly disclosed position for the hedge fund as they previously did not own it at the end of the first quarter.  The new filing was made due to activity on July 20th.

Per Google Finance, TransUnion is "a risk and information solutions provider to businesses and consumers. The Company provides consumer reports, risk scores, analytical services and decision capabilities to businesses. The Company operates through three segments: U.S. Information Services (USIS), International and Consumer Interactive. The USIS segment provides consumer reports, risk scores, analytical services and decisioning capabilities to businesses. The International segment provides services similar to its USIS segment to businesses in select regions outside the United States. The Consumer Interactive segment offers solutions that help consumers manage their personal finances and take precautions against identity theft. Businesses uses its solutions for their process workflows to assess consumer ability to pay for services, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud."

Senator Investment Group Takes Hyatt Hotels Stake

Alex Klabin and Doug Silverman's hedge fund firm Senator Investment Group has filed a 13G with the SEC regarding shares of Hyatt Hotels (H).  Per the filing, Senator now owns 5.82% of Hyatt with over 2.28 million shares.

This is a newly disclosed equity stake for the firm as they previously did not own any shares as of the end of the first quarter.  The new filing was made due to activity on July 17th.

We've also highlighted other recent portfolio activity from Senator here.

Per Google Finance, Hyatt Hotels is "a global hospitality company. The Company develops, owns, operates, manages, franchises, licenses or provides services to a portfolio of properties. The Company operates through four segments: owned and leased hotels; Americas management and franchising (Americas); ASPAC management and franchising (ASPAC), and EAME/SW Asia management and franchising (EAME/SW Asia). The owned and leased hotels segment consists of its owned and leased full service and select service hotels. The Americas segment consists of its management and franchising of properties located in the United States, Latin America, Canada and the Caribbean. The ASPAC segment consists of its management and franchising of properties located in Southeast Asia, as well as China, Australia, South Korea, Japan and Micronesia. The EAME/SW Asia segment consists of its management and franchising of properties located in Europe, Africa, the Middle East, India, Central Asia and Nepal."

Tiger Global Shows Redfin Stake, Ups Apollo Stake Again

Chase Coleman's hedge fund firm Tiger Global has submitted a couple filings to the SEC.  Here are the details:

Tiger Global Shows Extent of Redfin Stake

Redfin just completed its initial public offering (IPO) under the ticker symbol RDFN.  Per a Form 3 filed with the SEC, Tiger Global already had a stake in the company from when it was private. 

They owned 1,852,943 Series B convertible preferred stock, 3,705,838 Series F convertible preferred stock, as well as 617,826 Series G convertible preferred stock.

Upon completion of the IPO, the convertible preferred stock will "automatically convert into common stock of the Issuer on a 1:1 basis" per the filing.

Per Google Finance, Redfin is "a United States-based real estate broker company. The Company provides real estate search and brokerage services. The customer can search for homes by neighborhood, city or MLS number, or can refine results using detailed parameters, such as price and number of beds or baths. The Company serves home buyers and sellers. Redfin Builder Services is its sales platform designed specifically for home builders and condominium developers. Redfin Builder Services support product analysis, digital marketing, media, listing management and sales, pricing, and reporting. The customer can search homes for sale in Austin, Atlanta, Baltimore, Boston, Charlotte, Chicago, Dallas, Denver, Fort Lauderdale, Houston, Lake Tahoe, Las Vegas, Los Angeles, Miami, New York, Philadelphia, Phoenix, Portland, OR, Raleigh, San Antonio, San Diego, San Francisco, Sacramento, San Jose, San Luis Obispo, Santa Barbara, Seattle, Washington, and West Palm Beach."


Tiger Global Ups Apollo Stake Again

As we've detailed in previous months, Tiger Global has been accumulating a position in private equity firm Apollo Global (APO).

Their latest just-filed Form 4 with the SEC indicates they purchased 3,200 more APO shares on July 25th at a weighted average price of $27.966 and also purchased 53,000 shares on July 26th at a weighted average price of $27.96.

After these latest purchases, Tiger Global's stake in APO is now over 33.45 million shares.

Per Google Finance, Apollo Global is "an alternative investment manager in private equity, credit and real estate. The Company raises, invests and manages funds on behalf of pension, endowment and sovereign wealth funds, as well as other institutional and individual investors. The Company's segments include private equity, credit and real estate. The private equity segment invests in control equity and related debt instruments, convertible securities and distressed debt investments. The credit segment invests in non-control corporate and structured debt instruments, including performing, stressed and distressed investments across the capital structure. The real estate segment invests in real estate equity for the acquisition and recapitalization of real estate assets, portfolios, platforms and operating companies, and real estate debt, including first mortgage and mezzanine loans, preferred equity and commercial mortgage backed securities."

JANA Partners Sends Letter to EQT's Board, Still Opposes Rice Transaction

Barry Rosenstein's activist hedge fund JANA Partners has filed an amended 13D with the SEC regarding its position in EQT (EQT).  Per the filing, JANA still owns 5.8% of the company with 10,017,129 shares (including options to purchase 1.86 million shares).


We highlighted previously that JANA opposed EQT's transaction with Rice Energy.  They continue to oppose it and JANA has sent a letter to EQT's board, which is embedded below:



You can also read it via the SEC's website here.

Capitalize For Kids Investors Conference 2017: Einhorn, Watsa, Chilton & More

The 2017 Capitalize For Kids Investors Conference is only a few months away in Toronto, Ontario.  It features top investment managers sharing their investment ideas while all proceeds are allocated to solving the toughest challenges in children's brain and mental health.

You can learn more about the conference and register at their website: https://www.capitalizeforkids.org/conference


Capitalize For Kids Conference Details

When: October 18th and 19th, 2017

Where:  Arcadian Court, Toronto, Ontario


2017 Speakers List

David Einhorn, Greenlight Capital

Richard Chilton, Chilton Investment Company

Prem Watsa, Fairfax Financial 

Aaron Cowen, Suvretta Capital

Jeffrey Smith, Starboard Value

Brad Dunkley and Blair Levinsky, Waratah Capital

Dan Dreyfus, 3G Capital

Samantha Greenberg, Margate Capital

Paul Hilal, Mantle Ridge

Ted Goldthorpe, BC Partners

James Keenan, BlackRock

Jeffrey Olin, Vision Capital

Brandon Osten, Venator Capital

David Blitzer, Blackstone

John Wilson, Sprott

Richard Pilosof and Mike Quinn, RP Investment Advisors

Youlia Rowland, Proxima Capital

Ajay Royan, Mithril Capital

Christian Lassonde, Impression Ventures


This is a high quality event and basically has become Canada's pre-eminent investment conference.  And as you can see above, it features some quality speakers.  Hear their latest investment ideas and benefit charity at the same time.

The conference is already 60% sold out, so hurry before it's too late.  More than 400 pension plans, family offices, and buy-side investors will be in attendance.

You can register for the conference by clicking here.

Embedded below is the flyer for the event:

Hedge Fund Links ~ 7/28/17

Baupost's Jim Mooney warns of potential trigger for next crisis [Business Insider]

Paulson winds down long/short fund amid strategy refocus [Bloomberg]

Would you invest with Steven Cohen? [Institutional Investor]

Activist hedge funds pull hard on the M&A lever [Reuters]

Wealthy investors are leaving hedge funds for real estate [Bloomberg]

Loophole closed: hedge fund managers prepare huge tax checks [WSJ]

Eminence Capital Boosts CyberArk Software Stake

Ricky Sandler's hedge fund firm Eminence Capital has filed a 13G with the SEC regarding shares of CyberArk Software (CYBR). Per the filing, Eminence now owns 5.4% of the company with over 1.88 million shares.

This is an increase of 1.47 million shares since the end of the first quarter when they previously owned 415,460 shares. The latest filing was due to activity on July 14th.

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

Per Google Finance, CyberArk Software is "an Israel-based provider of information technology (IT) security solutions that protects organizations from cyber-attacks. The Company's software solutions are focused on protecting privileged accounts, which have become a critical target in the lifecycle of cyber-attacks. The Company's Privileged Account Security Solution consists of various products, such as Shares Technology Platform, Enterprise Password Vault, SSH Key Manager, Privileged Session Manager, Privileged Threat Analytics, Application Identity Manager, CyberArk-Conjur, Endpoint Privilege Manager and On-Demand Privileges Manager. The Company's products provide protection against external and internal cyber threats and enables detection and neutralization of attacks. The Company's Enterprise Password Vault provides customers with a tool to manage and protect all privileged accounts across an entire organization, including physical, virtual or cloud-based assets."

Third Point Q2 Letter: Re-enters Alibaba, Adds BlackRock Stake

Dan Loeb's hedge fund firm Third Point was up 4.6% for the second quarter and is up 10.7% for the year.  Third Point's second quarter letter reveals they've re-entered Alibaba (BABA).  They feel now is the time to re-enter due to the company's launch of personalized advertising, new ad tech for brand advertisers, as well as revenue potential from higher ad loads, among other reasons.

Backing out net cash and some other stakes, Loeb's firm feels Alibaba's core business alone is worth $121 per share (around 15x their 2019 EPS estimate of $8.20) with earnings growing 30% year-on-year.  They feel BABA can close the valuation gap with competitors like Tencent, which trades at 32x consensus 2018 EPS.

Third Point also reveals a stake in BlackRock (BLK) in the letter.  Rather than simply being an asset manager. they feel it's "becoming a network or index-like business, with earnings power driven by ETFs (via iShares) and data & analytic services (via Aladdin).  They point out they're basically oligopoly businesses.

Also, a few months ago we highlighted how this hedge fund has gone activist on Nestle and we posted Third Point's letter on Nestle here.

Embedded below is Third Point's Q2 2017 letter:



You can download a .pdf copy here.

For other recent hedge fund letters, you can also read Greenlight Capital's Q2 letter here.