SAC Capital’s Steve Cohen Turns Bullish on Supervalu Inc. (SVU)

SAC Capital’s Steve Cohen Turns Bullish on Supervalu Inc. (SVU)
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Steve Cohen, one of the world’s most successful intuitive traders and the head of SAC Capital Advisers, has increased his stake in SUPERVALU INC. (NYSE:SVU) by 42,893 percent. As of March 28, the billionaire investor owns about 10.79 million shares of SUPERVALU or 5.1 percent of the company’s total outstanding shares.

SAC Capital's Steve Cohen Turns Bullish on Supervalu Inc. (SVU)

The retailer recently sold some of its popular brands like Shaw’s, Acme, Jewel-Osco, Albertsons and Star Market to Cerberus Capital Management. The deal closed on March 21, 2013 and was valued at $3.3 billion. According to the SEC filings, Cohen owned only 25,000 shares of SUPERVALU INC. (NYSE:SVU) at the beginning of this year. So, his SAC Capital Advisers accumulated its entire position in the first three months of this year.

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SUPERVALU INC. (NYSE:SVU)’s third quarter revenues plunged 5 percent compared to the same period a year ago. Most of the decline in December 2012 quarter was in the Retail Food business which accounts for the company’s 60 percent revenues. Pretax income in the third quarter was a poor $31 million, down from $80 million in the December 2011 quarter. Cash flows for the first nine months came at $360 million. SUPERVALU is scheduled to announce its fourth quarter earnings on April 24, 2013.

According to Insider Monkey, short positions have grown to 35 percent of the company’s shares, showing that the market is bearish on the stock. Besides SAC Capital Advisers, several other hedge funds have demonstrated interest in the grocer. Saba Capital purchased 8.2 million shares of the company between October and December 2012. Philippe Laffont’s Coatue Management doubled the size of its stake to 10 million shares. Blue Mountain Capital and Brigade Capital also own shares of SUPERVALU INC. (NYSE:SVU).

Exiting the assets of its struggling Retail Food unit could potentially be profitable for the company. SUPERVALU INC. (NYSE:SVU) is also changing its retail business to add wholesale activities. The company believes that it can generate about $17 billion in annual revenues after restructuring. Additionally, last week the company announced to cut 1,100 jobs.

Shares of Supervalu Inc. (NYSE:SVU) were almost flat at $4.81 at 2:57 PM EDT.

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