Q2 Letter: Baupost won big in Q2 with PG&E, eBay, Liberty Global
Seth Klarman's Baupost recorded "strong" gains for the second quarter, although precise numbers were not included in the July 23 letter to investors, which was reviewed by ValueWalk. Klarman said that during the first quarter, they were "substantial purchasers of securities," while during the second, they were "significant net sellers" due to the strong rally. Read More
- US: Dow: 12822.60 (-0.93%), S&P 500: 1362.66 (-1.01%), NASDAQ: 2925.30 (-1.37%)
- Europe: CAC: 3193.89 (-2.18%), DAX: 6630.02 (-1.94%), FTSE: 5651.77 (-1.10%).
- Asia-Pacific: Australia: 4199.10 (-0.18%), China: 2168.64 (-0.75%), Hong Kong: 19640.80 (0.42%), India: 5205.10 (-0.72%), Japan: 8669.87 (-1.45%).
- Metals: Gold: 1582.80 (0.15%), Silver: 27.30 (0.31%), Copper: 3.45 (-2.45%)
- Energy: Crude Oil: 91.44 (-1.32%), Natural Gas: 3.08 (2.73%)
- Commodities: Corn: 7.95 (2.22%), Soya Bean: 16.86 (2.06%), Wheat: 9.48 (1.47%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2158 (1.03%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5620 (0.21%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.5150 (-0.37%)
- 10 year US Treasury: 1.457% (-0.051)
Market and Economy News Update
U.S. markets slide: U.S. markets snapped a three-day winning streak and closed near the lows of the day after Spain said the recession will extend into next year. The Dow Jones Industrial Average (INDEXDJX:.DJI) tumbled 120.79 points, or 0.93 percent, to close at 12,822.57. The S&P 500 (INDEXSP:.INX) fell 13.85 points, or 1.01 percent, to end at 1,362.66, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) dropped 40.60 points, or 1.37 percent, to finish at 2,925.30. The Dow rose 0.36 percent for the week, while the S&P 500 gained 0.43 percent, and the Nasdaq was up 0.58 percent.
Oil prices fall: Oil prices fell for the first time in a week amid investor concerns that Europe is not doing enough to stem the debt crisis. Crude oil for August delivery declined 1.3 percent, to settle at $91.44 a barrel on the New York Mercantile Exchange. Brent oil for September settlement fell 0.9 percent to $106.83 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Google Inc (NASDAQ:GOOG) has agreed to buy Mac and iPhone e-mail client, Sparrow, for an undisclosed sum.
- Apple Inc. (NASDAQ:AAPL) ended 1.6 percent lower after an analyst at Bernstein warned that the company was likely miss third quarter sales.
- Morgan Stanley (NYSE:MS) is in advanced talks with Qatar’s sovereign wealth fund, Qatar Investment Authority, to sell its commodities unit, in a deal worth around $1 billion.
- Hewlett-Packard Company (NYSE:HPQ) declared its regular quarterly dividend of 13.2 cents per share, on Friday.
- John Swainson, Dell Inc. (NASDAQ:DELL)’s new software chief plans to increase the size of the business five-fold to around $5 billion. Dell currently generates about $1.2 billion from its software business.
- The Procter & Gamble Company (NYSE:PG), the world’s largest household products maker, will buy the remaining 50 percent stake in its joint venture with Spain’s Agrolimen Group for $1 billion.
- Ingersoll Rand PLC (NYSE:IR) reported second-quarter earnings excluding certain items of $1 a share, 9 cents above Wall Street estimates. Total sales declined 7 percent to $3.82 billion, trailing estimates of $3.88 billion.
- The Boeing Company (NYSE:BA) has filed a federal lawsuit alleging that the U.S. Defense Department reneged on assurances made to the company and falsely persuaded it to participate in a joint venture.
- EU antitrust regulators launched an in-depth investigation into United Parcel Service, Inc. (NYSE:UPS)’s 5.2 billion euro ($6.4 billion) bid for TNT Express NV (AMS:TNTE).
- Celgene Corporation (NASDAQ:CELG) ended 3 percent lower after the European Medicines Agency decided not to recommend approval of its treatment for relapsed or refractory peripheral t-cell lymphoma.
- The US Food and Drug Administration approved Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX)’ blood cancer drug, Kyprolis.
- Dole Food Company, Inc. (NYSE:DOLE) reported second quarter earnings that beat expectations, and said it is considering the sale and spin-off of its packaged foods business
- Freight management company, Hub Group Inc (NASDAQ:HUBG), ended 10 percent lower after reporting lower than expected quarterly earnings, and lowering its full-year forecast.
- A123 Systems, Inc. (NASDAQ:AONE), a maker of lithium-ion batteries for electric cars, has been awarded a contract to supply a 2-megawatt grid energy storage system to China’s Ray Power Systems.
- Palo Alto Networks, Inc. (NYSE:PANW) ended 27 percent higher in its market debut on Friday, while travel booking website operator, Kayak Software Corp (NASDAQ:KYAK) jumped almost 30 percent in its Wall Street debut.
Hedge Fund News Update
- Despite economic uncertainties in Europe, hedge funds managed to outperform the S&P 500 (INDEXSP:.INX) and the NASDAQ Composite (INDEXNASDAQ:.IXIC) indexes, according to the HFRI Fund Weighted Composite Index.
- The U.S. Securities and Exchange Commission has asked JPMorgan Chase & Co. (NYSE:JPM) to provide more information about the proposed copper exchange-traded fund, the JPM XF Physical Copper Trust, which is being bitterly opposed by the commodities hedge fund, RK Capital Management.
- Brevan Howard Asset Management, one of Europe’s largest hedge fund managers, has set up an investment company, the Brevan Howard US Investment Management, in New York.
- Forward redemptions fell in July, according to data from the GlobeOp Financial Forward Redemption Indicator.
- Swiss-listed fund of funds group, Gottex Fund Management, said that its flagship fund of hedge funds continued to outperform their benchmark and posted positive returns year-to-date.
- New York-based Van Eck Associates Corporation has agreed to acquire Lyster Watson’s hedge fund beta business for an undisclosed sum.
Brokerage Upgrades and Downgrades on Friday, July 20, 2012
- Agrium Inc. (USA) (NYSE:AGU) was raised to “outperform” from “sector perform” by analysts at RBC Capital.
- Citrix Systems, Inc. (NASDAQ:CTXS) was lifted to “outperform” from “neutral” by analysts at Zacks with a target price of $99.
- CVB Financial Corp. (NASDAQ:CVBF) was raised to “buy” from “neutral” by analysts at B. Riley.
- Diamond Offshore Drilling, Inc. (NYSE:DO) was upgraded to “buy” from “hold” by analysts at Williams Financial Group with a target price of $75. Diamond Offshore Drilling, Inc. (NYSE:DO) was also lifted to “buy” from” hold” at Williams Capital.
- Enbridge Inc (USA) (NYSE:ENB) was lifted to “outperform” from “neutral” by analysts at Credit Suisse.
- Guess?, Inc. (NYSE:GES) was raised to “neutral” from “underpeform” by analysts at Zacks.
- Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) was upgraded to “overweight” by analysts at Barclays Capital.
- PPG Industries, Inc. (NYSE:PPG) was lifted to “buy” from “hold” by analysts at Deutsche Bank.
- Regeneron Pharmaceuticals Inc (NASDAQ:REGN) was raised to “outperform” from “neutral” by analysts at Zacks with a target price of $145.
- TransCanada Corporation (USA) (NYSE:TRP) was upgraded to “outperform” from “neutral” by analysts at Credit Suisse.
- Calix, Inc. (NYSE:CALX) was downgraded to “market perform” from “outperform” by analysts at Avondale Partners.
- Cepheid (NASDAQ:CPHD) was cut to “underweight” from “equal weight” by analysts at Stephens.
- Cypress Semiconductor Corporation (NASDAQ:CY) was downgraded to “neutral” from “buy” at Dougherty & Co.
- FLIR Systems, Inc. (NASDAQ:FLIR) was lowered to “underperform” from “neutral” by analysts at Zacks with a target price of $17.
- MB Financial, Inc. (NASDAQ:MBFI) was cut to “market perform” from “outperform” by analysts at FIG Partners.
- Meadowbrook Insurance Group, Inc. (NYSE:MIG) was downgraded to “hold” from “buy” by analysts at BGB Securities.
- Montpelier Re Holdings Ltd. (NYSE:MRH) was downgraded by analysts at Zacks from “outperform” to “neutral” with a target price of $22.
- Par Pharmaceutical Companies, Inc. (NYSE:PRX) was cut by analysts at ThinkEquity from “buy” to “hold.”
- United Parcel Service, Inc. (NYSE:UPS) was lowered to “underperform” from “market perform” by analysts at Avondale Partners.