Tabi Hussain

Elliott Management bends another one to its will. Today NetApp Inc. (NASDAQ:NTAP) caved under pressure from its activist shareholder and announced that it will fast track the $1 billion share buyback over the next four months. The data management company however denies that the changes approved by NetApp Inc. (NASDAQ:NTAP)’s board were influenced by Elliott’s intervention alone. NetApp decided on the renewed share buyback plan and quarterly dividend after consulting with all of its shareholders, according to company sources. Elliott owns less than 5 percent stake in NetApp, the hedge fund confirmed yesterday, but rumors of a large stake were circulating since last week. Elliott owned 1.15 million shares of NTAP at the end of Q4 2012 and boosted that stake to 16 million some time in this quarter. The hedge fund started pushing for changes to the company’s board and called for attempts to increase value for shareholders. The restructurings were announced yesterday in the quarterly earnings call. Jesse Cohn from Elliott Management, who was also responsible for the successful activist campaign at BMC Software, Inc. (NASDAQ:BMC), told Reuters that Elliott was happy with the company’s plan and appreciates their initiative. Elliott has also been involved in a proxy
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In the first quarter, hedge funds showered new love on Exxon Mobil Corporation (NYSE:XOM), General Electric Company (NYSE:GE), Time Warner Inc (NYSE:TWX) and Hess Corp. (NYSE:HES), resulting in a decline in short interest as they entered Goldman Sachs’ VIP Basket of 50 stocks. The VIP list includes the favorite stock picks from hedge funds in each quarter. We have covered the major points from GS Hedge Fund Trend Monitor, which found that  American International Group Inc (NYSE:AIG) had maintained its hold as top hedge fund holding. Hedge funds: Short Favorites In Small-Mid Cap Stocks A major increase in short interest was witnessed in Fusion-IO, Inc. (NYSE:FIO), up to  30 percent of market cap in Q1 from 22 percent in Q4 2012. VIVUS, Inc. (NASDAQ:VVUS) got more attention from shortsellers, interest rose from 21 percent to 26 percent of market cap. Q1 saw a major decrease in short interest in SuperValu INC. (NYSE:SVU), down to 26 percent of market cap in 1Q2013 from 40 percent in 4Q2012.   Short interest also fell in J.C. Penney Company, Inc. (NYSE:JCP), down to 26 percent of market cap in 1Q2013 from 29 percent in 4Q2012. Pitney Bowes Inc. (NYSE:PBI), now 28 percent from 31 percent in Q4. Short interest in Research In Motion Ltd (NASDAQ:BBRY) rose to 30 percent from 26 percent, Herbalife
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Toscafund is now known largely for its super bullish view of UK economy. The opinion is not applicable to the rest of Europe, rather the managers of Toscafund believe that UK is in a great shape to cash in to the demand that the troubled eurozone cannot fulfill. The fund’s investments have paid off handsomely so far, the returns were up 2.35 percent in April which brought the YTD gain to 10.4 percent. Recently Toscafund’s founder, Martin Hughes and chief economist Dr. Savvas Savouri spoke to Reuters, we have mentioned Dr.Savouri’s views on UK’s big potential several times. In the recent interview, both managers talked about how UK’s labour market is a strong asset and what could be the ramifications if Britain chooses to leave EU and restrict its immigration rules. Toscafund On Online Dating And Whitney Tilson Toscafund  holds major stakes in some companies, the fund owns 14 percent of Redrow plc (LON:RDW), a residential developer, 27 percent of Daisy Group PLC (LON:DAY), a communications system provider and 8.5 percent of Cupid PLC (LON:CUP), the online dating company. Cupid PLC (LON:CUP) has been a short bet of several hedge funds and they have made big profits from it as stock slid over 50 percent in this year.
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The Australian dollar became hot and noticeable after rumors that George Soros was shorting the currency surfaced earlier this month. George Soros reportedly placed a $1 billion bet on the fall of AUD on May 6th. The bearish position from Soros, who is known for his big bets against currencies is not the only such incident. Stanley Druckenmiller is the other bear of AUD. He recommended the currency as a short idea in the Ira Sohn Conference. Australia relies greatly on exports to China and is has a currency heavily linked to commodities. Australia’s major industry is mining, with iron ore, copper, gold and other metals as the backbone of its growth. Reduced demand of raw material from China has been slowly having its effect in Australia, and the same points were also argued in Stanley Druckenmiller’s presentation. AUD Has Risen 6.4 Percent Against USD While growth slowed in Australia, its dollar has continued to strengthen.  Between June 2012 and April 2013, AUD has risen 6.4 percent against USD. This rise has increased export costs and has weighed down non-industrial businesses like tourism. The Australian central bank has indicated that it will cut rates and did so on May 7, to a record low
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James Dinan’s York Capital has been up throughout the year in most of its funds. York’s event driven/multi strategy allocation has declined only in Europe, where York European Opportunities which was down 0.1 percent in last month and is up only 2.5 percent for the four months. However things are much better in York’s other funds, the flagship programs York Capital Management and York Investment Ltd, were each up 1.8 percent in April and have returned +5.4 percent YTD.  J.C. Penney Debt: York Capital Short Bet James Dinan made news in March when he revealed that he was shorting J.C. Penney Company, Inc. (NYSE:JCP) debt and believed that the company had a tough road ahead. Since then J.C. Penney Company, Inc. (NYSE:JCP) has received a mix of good and bad news, the retailer got a new CEO, not exactly new since Myron Ullman had held the same position before Ron Johnson took the reins from him. Days after Ullman reclaimed the throne at JCP, the company welcomed a major stake  from the noted investor, George Soros and later had a $1.75 billion debt deal at 7 percent approved by Goldman Sachs Group, Inc. (NYSE:GS). These devlopments were good for long shareholders but
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Gold declined another 6.5 percent since its great fall on April 15. Yesterday gold futures were volatile, after an initial loss in the day, the shares suddenly jumped up and closed up 3.12 percent. However today again they are back on the downward slope, SPDR Gold Trust (ETF) (NYSEARCA:GLD) is trading down 2 percent for now. The unexpected detraction in this safe haven asset and the corresponding positioning of hedge fund trades is something we have discussed back in April and now we are going to look at it again as April performance numbers have started trickling in from these funds. Woodbine Capital, a macro focused hedge fund, returned a brilliant 5.15 percent on a gross basis in last month and 4 percent net, this brings the fund’s four month net returns to 7.4 percent. While the major performer for Woodbine continues to be longs in Japanese stocks, the fund also profited from a tactical short trade in gold which Woodbine has since exited. The over 10 percent decline in gold in April must have contributed handsomely to Woodbine’s short in gold. Woodbine has previously lost in long gold positions. C12 Was Caught Offguard With The Sell-off In Gold In Japan
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Societe Generale‘s latest guide on Exchange Traded Funds notes a rise of bearish calls on U.S. exchange listed companies in the semiconductor and natural gas sectors. Short interest in both ETFs, Market Vectors Semiconductor ETF (MUTF:SMH) and United States Natural Gas Fund (NYSEARCA:UNG), has risen 391 percent and 243 percent respectively since December 2012. The semiconductor industry shows cyclical growth with periods of boom driven by developments in the smartphone industry and pressures from inventory supply. Conforming with this view, Goldman Sachs in its note said that 2013 would be the year for another semiconductor boom. Their report said that the industry has a history of outperforming only once every five years and this could be that year. However their analysis admitted that the under-performance in 2012 was attributable to bearish investor sentiment prevailing in the industry. Semiconductors Target of hedge funds Several semicondutor manufacturers have been a target of short bets in Europe. AIXTRON SE (NASDAQ:AIXG) (ETR:AIXA) (FRA:AIXA), a German technology solutions company is active in making products that contain silicon or organic semiconductor materials. AIXTRON is a short bet of several big names including, AQR Capital and Maverick Capital whereas Citadel Advisors and Pennant Capital reduced their shorts to below 0.5 percent. Total short interest disclosed
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Leon Cooperman’s Omega Advisors has taken a stake in the recently made-public PennyMac Financial Services Inc (NYSE:PFSI). According to a 13D, Cooperman has an active stake of 21.6 percent in the mortgage company. In response to Cooperman’s disclosure, PennyMac rose over 9 percent. PennyMac Financial Services Inc (NYSE:PFSI) was founded by Countrywide Financial Corp’s former President, Stanford L. Kurland in 2008. The company provides financial services in the mortgage platform. Omega Advisors’ Shares In PennyMac PennyMac started trading publicly on May 10 and is since up 12.6 percent. Omega Advisors’ total ownership in PennyMac is 2,759,600 shares, most of which was bought in its May 9 IPO at $18/share whereas 9600 shares were bought on May 14 at $19.71/share. Another hedge fund also disclosed position in PennyMac Financial Services Inc (NYSE:PFSI).  Roberto Mignone’s Bridger Capital has a passive stake of 13.5 percent or 1.5 million shares in PennyMac, acquired on May 9. In other disclosures, Paulson & Co. increased its stake in Dex Media, Inc. (NASDAQ:DXM), according to a regulatory filing made on Friday. John Paulson now owns an active stake of 13 percent in Dex Media, up from 10.9 percent, disclosed last Tuesday. Dex Media is the newly formed entity arising from the merger of Dex One
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Herbalife Ltd. (NYSE:HLF) has been particularly active today, trading up 9 percent. While there are some who cannot get enough of Herbalife, the Latinos are not so happy with the nutritional supplements company. The Hispanic Federation wrote to FTC on Friday, seeking an investigation into Herbalife Ltd. (NYSE:HLF), saying that they had concerns about the company’s business model. The letter asks for a probe into the way the company promises huge gains for the distributors but in reality they end up losing money. The letter alleges that Herbalife’s marketing campaign lures immigrants into buying its products with the promise of big money by working only a few hours at home, but says that the real picture is different. The Hispanic Federation expresses its concern over the confusion on how Herbalife’s distributors make money. It emphasizes that if the distributors are supposed to earn profits by recruiting more distributors then that is an indication of a pyramid scheme. Hispanic Federation’s President, Jose Calderon was also not excited about the way “get rich” schemes particularly target immigrants. In particular, Calderon asks for the resolution of this question, “Are distributors incentivized to sell products or to recruit new distributors into the pyramid?“. The letter
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Silver fell yet again, touching new lows in barely over a month. The latest decline puts the YTD fall to 28 percent so far and is also notable as the price is now the lowest since September 2010.  Slower industrial growth has been bogging down profits in all commodities and metals have clearly been hit the hardest. Silver had entered the bear market last month, as per data from CFTC till May 14, hedge fund positioning in silver futures is not in the net short zone yet but is in the buy zone with severe downward pressure on price. Silver And Gold Miner Opened At 1031 Pence Speaking of shorts, hedge funds have bet against some precious metal miners including those who dig for silver. Fresnillo Plc (LON:FRES), a silver and gold miner opened at 1031 pence after closing at 1077 on Friday. After recovering a little, the shares are down 3.55 percent today. Fresnillo is a short bet of Lansdowne Partners, one of UK’s most well known hedge funds. Lansdowne holds 0.7 percent of Fresnillo’s shares short, which was roughly equal to $112 million at the time when disclosed on March 26. Since then the miner is down almost 25 percent,according to
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ValueWalk covered the Q1 13F filers from the top hedge funds and there were a few frequently picked stocks that stood out, and some sells that were ubiquitous in many filers. Before we get into our takeaways, lets take a look at what FactSet is saying. FactSet, which analyzes the quarterly holdings of the 50 largest hedge funds, noted that The Boeing Company (NYSE:BA) has suddenly become very popular, as the stock took $1.6 billion in inflows, an increase of 250 percent in ownership since Q4. Buyers of Boeing Andreas Halvorsen’s Viking Global bought the largest stake in The Boeing Company (NYSE:BA) in Q1—the fund added 12.37 million shares of the aircraft manufacturer. Barry Rosenstein’s JANA Partners and Renaissance Technologies also opened new positions with 1.55 and 1.1 million shares each. Tiger grandcub Hoplite Capital bought 537k shares of Boeing in the last quarter. Adage Capital increased its position and now holds 2.7 million shares. SAC Capital, Soros Fund and Bridgewater Associates also hold smaller positions in the stock, which were boosted in the past quarter. Buyers and Sellers of Virgin Media Virgin Media Inc. (NASDAQ:VMED) popped in and out of 13F filers so frequently that it was dizzying. FactSet also notes that VMED came up
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