Perry Capital Buys Herbalife, NRG Energy, Penn National Gaming

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The 13f filing of Perry Capital, the hedge fund managed by Richard Perry, showed that its equity investments are worth $3,998,609,000 for the third quarter that ended September 30, 2013. The hedge fund purchased stakes in 13 new stocks and sold its entire stake in nine equities. It also increased its position in four stocks and reduced its stake in two other equities.

Perry Capital largest positions

Perry Capital’s portfolio showed that its largest positions for the third quarter include put options of iShares Dow Jones US Real Estate (ETF) (NYSEARCA:IYR) and iShares Russell 2000 Index (ETF) (NYSEARCA:IWM), which accounts for 12% and 10.66%, respectively,  FedEx Corporation (NYSE:FDX) 11.99%, American International Group Inc (NYSE:AIG) 11.05%, and NRG Energy Inc (NYSE:NRG).

Perry Capital new positions

During the quarter, the hedge fund acquired 4,000,000 put options of iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) worth $426,440,000 making it its fourth-largest position.

Perry Capital’s second largest acquisition is the controversial multilevel marketing company, Herbalife Ltd. (NYSE:HLF) with 2,632,138 shares worth $183,644,000 million. The stock represents 4.59% of its portfolio.

The nutritional and weight management company is surrounded by accusations of deceptive business practices. Bill Ackman of Pershing Square Capital alleged that the company is a pyramid scheme, and called for regulators to investigate the company. In recent months, a group of Latina organizations urged the FTC to look into the business practices of Herbalife.

Despite the accusations, Herbalife Ltd. (NYSE:HLF) reported positive 3Q earnings that beat the estimates of Wall Street analysts. The company delivered $1.41 earnings per share on $1.21 billion compared with the consensus estimate of $1.15 earnings per share on $1.2 billion revenue.  The stock is currently trading around $65.42 a share.

The hedge fund also purchased 4,002,800 shares call option of NRG Energy Inc (NYSE:NRG). Its investment in the company is worth $109,397,000. Over the past 52-week range, the stock price of the company climbed from $19.14 to $30.28 per share.

The earnings of NRG Energy (NYSE:NRG) for the third quarter missed the expectations of Wall Street analysts. The company reported $0.73 earnings per share compared with $0.80 earnings per share estimate of Zacks Equity Research.

Perry Capital also acquired 1,250,000 shares of Penn National Gaming, Inc (NASDAQ:PENN) worth $69,200,000.  The company recently completed the spin-off of Gaming and Leisure Properties Inc (NASDAQ:GLPI) as a separate company.

Perry Capital sold out positions

Perry Capital sold its entire stake in Advance Auto Parts, Inc. (NYSE:AAP), American Real Capital Properties Inc (NASDAQ:ARCP) and Agilent Technologies Inc. (NYSE:A).

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