While far less attention is being paid to hedge fund 13F filings, which show a stale representation of equity long stakes among the hedge fund community as of 45 days prior, than in years gone by as a result of increasingly poor performance by the 2 and 20 crowd, they still remain closely watched source of investment ideas but mostly to find out what the new cluster ideas and hedge fund hotel stocks are at any given moment. Here are the highlights from the latest round of 13F filings.
Ackman just released his disastrous Q1 Portfolio Update, in which he made zero macro comments, and instead spent the entire letter defending his various investments such as Air Products, Canadian Pacific (of which he sold 30% of its position on April 22), Fannie Mae, his Herbalife short which recently has cost him even more hundreds of millions in losses, Howard Hughes Company, Mondelez (where he also sold 20 million share on March 16), Nomad Foods, Platform Specialty Products, Restaurant Brands, and Zoetis (where he sold a 16.85mm share block on May 9 taking his stake from 8.6% to 5.0%). Why all the liquidations? Because of Valeant of course, which remains Ackman's biggest headache, and to whose defense he dedicated the most time.
Pershing Square is not so much trading against Herbalife but the general market and a substantial institution ownership of this stock on the street.
For the past 50 or so years, the quickest way for a sharp young sociopath to get rich has been to join an investment bank or hedge fund. The former were riding a “regulatory capture” gravy train that became ever-more-lucrative as new government agencies morphed into subsidiaries of Wall Street. Said another way, when financial assets are being artificially inflated by excessive liquidity, it’s easy to make money by shuffling this ever-appreciating inventory back and forth, and to look very smart while doing so. But those days are ending with a bang...
Moments ago, the 2016 edition of the Sohn Investment Conference started, a feeding frenzy for traders and hedge fund managers such as Gundlach, Einhorn and Chanos who descend on this popular annual "round table" to pitch their best and worst ideas. As always, the moment a company's name is mentioned in a bullish or bearish context, its stock is sure to surge or slump, as the headline-hungry algos immediate pounce in the current reactionary market environment. But is following the advice of these hedge fund gurus such a good idea?
When Tom Bentley tried to pull his money from a mutual fund troubled by its large stake in Valeant Pharmaceuticals International Inc., he instead received shares in a Springfield, Mo. auto-parts retailer. Sequoia Fund Inc. sent the retired computer hardware engineer about 5% of his money in cash and the rest was stock in one company–O’Reilly Automotive Inc. Mr. Bentley said he sold the shares as soon as they appeared in his account on April 7, but they had already dropped in value. "It has been pretty horrendous," Mr. Bentley said.
Unlike yesterday's overnight session, which saw some subtantial carry FX volatility and tumbling European yields in the aftermath of the TSY's anti-inversion decree, leading to a return of fears that the next leg down in markets is upon us, the overnight session has been far calmer, assisted in no small part by the latest China Caixin Services PMI, which rose from 51.2 to 52.2. Adding to the overnight rebound was crude, which saw a big bounce following yesterday's API inventory data, according to which crude had its biggest inventory draw in 2016, resulting in WTI rising as high as $37.15 overnight
The Hits Just Keep On Coming: Valeant CEO To Tesity Under Oath, Following Accusation Of Merger Agreement ViolationSubmitted by Tyler Durden on 03/28/2016 12:24 -0400
It's been a terrible month for investors in Valeant (and Pershing Square) and it is about to get even worse following news that the outgoing CEO of the troubled company, which is under scrutiny for dramatically hiking the price of older drugs, has been summoned to testify at a U.S. congressional hearing on April 27, the panel said on Monday.
- Belgium hunts 'third man' after Islamic State bombings (Reuters)
- Number of Attackers, Key Details of Brussels Assaults Remain Unclear (WSJ)
- Surviving Paris attacks suspect wants to return to 'explain himself': lawyer (Reuters)
- Brussels Suicide Bomber Slipped Terror Net (WSJ)
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Valeant "Kitchen Sink": CEO Out, Ackman In, Throws Ex-Goldman CFO Under The Bus, Warns Of Potential DefaultSubmitted by Tyler Durden on 03/21/2016 09:31 -0400
Pearson is out; Ackman is in... accounting mis-statements (balmed ojn improper conduct of CFO) resulting in worse than expected results... and no confirmation on the waivers from lenders... warning of possible default.
Valeant Throws Its Former CFO Under The Bus; Accuses Him Of Cooking The Books After Coming Over From Goldman SachsSubmitted by Tyler Durden on 03/21/2016 09:22 -0400
Back in October, we tried to "tie the Valeant roll-up together by presenting The Goldman "Missing Link" in which we showed that Howard Schiller, Valeant's CFO from December 2011 to June 2015, previously ran Goldman Sachs’ health-care practice until 2009, when he became the chief operating officer of Goldman’s investment bank. The next year, the bank advised Valeant on its breakout purchase of Biovail Corp. Today, as part of its stunning announcement earlier today, the company - in looking for easy scapegoats - also threw its former CFO under the bus and accused him of cooking the books.
As if the historic collapse of Valeant and his hedge fund crashing by 26% YTD was not enough, moments ago S&P added insult to injury when it warned it may downgrade Pershing Square, because "Pershing Square Holdings' net asset value has dropped substantially, largely because of a precipitous decline in the market value of Valeant Pharmaceuticals" and "as a result, Pershing Square's debt-to-total assets ratio increased to above 20% as of March 15, 2016, from 15% at the end of October 2015. We are placing our 'BBB' issuer credit and senior unsecured debt ratings on the company on CreditWatch with negative implications."
- Global Stocks Slip Following Fed’s Cautious Tone (WSJ)
- Oil rallies towards $41, near 2016 high, on producer meeting (Reuters)
- Hamptons luxury home sales soften as Wall Street weakness takes a toll (Reuters)
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Ackman Begins Portfolio Liquidation To Shore Up Cash, Sells $800 Million In Mondelez After Losing 26% YTDSubmitted by Tyler Durden on 03/16/2016 17:42 -0400
"Dear Pershing Square Investor: After the close, we completed a block sale of 20 million shares of Mondelez International. As a result of the sale, we now own a 5.6% stake in the company, are the third largest owner, and have substantial uninvested cash."
Bill Ackman Sends Out Desperate "Hail Mary" Letter Defending Valeant, Says Business Worth "Multiples" MoreSubmitted by Tyler Durden on 03/15/2016 12:20 -0400
With Valeant down nearly 50%, and Pershing Square fielding an unknown number of margin calls and redemption requests as of this moment, Bill Ackman just did the only thing he could do at this moment: send a letter to anyone who still cares, defending his disastrous investment, yet again.