Billionaire Ubben Buys More Shares of CBRE Group Inc. (CBG), Huber More Bullish on This Oil Tanker Stock, Plus Two Other Moves

Numerous sources and statistics recently indicated that hedge funds have been severely hit by the current volatile markets. Widely-known hedge fund managers, including Bill Ackman, Leon Cooperman and David Einhorn, have surely disappointed some of their investors with their poor performance since late last summer. However, plenty of hedge funds and investors believe that the massive selloff in U.S equities and other global stocks has created numerous investment opportunities at the moment, so hedge funds’ dynamic capital allocation strategies will prove to be crucial for their performance in the months ahead. For that reason, most individual investors might find it particularly interesting to see what moves successful money managers are making when many valuations are seriously damaged. And the best way investors can monitor hedge fund activity is to browse funds’ 13G, 13D, and Form 4 filings, which disclose up-to-date moves made by smart money investors. Let’s take a glimpse into the content of four such filings recently submitted with the SEC by money managers Joe Huber, Jeffrey Ubben of ValueAct Capital, and two other renowned managers.

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A newly-amended 13G filing reveals that Huber Capital Management LLC currently owns 14.53 million Class A shares of Teekay Tankers Ltd. (NYSE:TNK), which make up 11.1% of the company’s outstanding common stock. That represents a greater than 5.00 million-share increase from the position revealed through the fund’s 13F filing for the September quarter. Teekay Tanker’s business mainly focuses on owning and operating crude oil and product tankers by utilizing a chartering strategy aimed at grasping upside opportunities in the tanker spot market. Crude tanker spot rates for the third quarter of 2015 were the highest third quarter rates since 2008 and continued to be robust through the end of the year. There are several factors that have strengthened the crude tanker market in recent months, which include soft fleet growth, high refinery throughput, improved earnings due to low bunker fuel prices, and high crude oil supply. However, JPMorgan recently downgraded Teekay Tankers Ltd. (NYSE:TNK) to ‘Underweight’ from ‘Overweight’ and trimmed its price target on the stock to $7 from $10, citing high exposure to the spot market and rich valuation.

The shares of Teekay Tankers enjoyed a great run last year, but they have lost more than 43% since the beginning of 2016. The oil tanker spot rates declined significantly in January, with analysts believing that the huge decline was caused by the overstocking of crude oil. Hence, it’s viable to expect that spot rates will recover in the forthcoming months due to depleting inventories. Meanwhile, the company looks extremely cheap at the moment if relying on several valuation metrics. For example, the stock trades at a forward P/E multiple of only 2.61, while that ratio stands at 9.37 for competitor Nordic American Tanker Ltd (NYSE:NAT). Ken Griffin’s Citadel Advisors LLC sold out its entire sake of 399,293 shares in Teekay Tankers Ltd. (NYSE:TNK) during the fourth quarter of 2015.

Let’s head to the next two pages of this article, where we discuss three other recent filings submitted with the SEC.

According to a Form 4 filing, Rehan Jaffer’s H Partners Management purchased 776,270 shares of Tempur Sealy International Inc. (NYSE:TPX) this week at prices in the range of $51.36 to $55.00 per share, boosting its overall holding to 7.00 million shares. The freshly-upped position accounts for 11.2% of the company’s outstanding common stock. The shares of the bedding provider have lost 24% since the beginning of 2016 and are down by 4% over the past year. Although Tempur Sealy delivered a great financial performance last year, the company continues to face some issues with the Danish Tax Authority (SKAT). The company received income tax assessments from SKAT which could result in a significant payment to SKAT if Tempur fails to defend its position or pursues a settlement with SKAT.

Leaving the tax issues aside, the company reported total net sales of $3.15 billion for 2015, compared to $2.99 billion for 2014. Most importantly, total net sales on a constant currency basis grew by 9.4% year-over-year, thanks to growth in both the domestic and international markets. The company’s adjusted earnings per share (EPS) increased by 20.4% year-over-year to $3.19. Indeed, the recent slump in the company’s share price has made the stock a more appealing investment opportunity, but Tempur Sealy International Inc. (NYSE:TPX)’s valuation seems to reflect some worries related to the tax issues mentioned above. The stock trades at a forward P/E multiple of 11.82, which is well below the average of 16.70 for the consumer discretionary sector. Columbus Circle Investors, managed by Clifford G. Fox, upped its stake in Tempur Sealy International Inc. (NYSE:TPX) by 81,602 shares during the fourth quarter to 284,147 shares.

As revealed by a separate Form 4 filing, ValueAct Capital snapped up 978,800 class A shares of CBRE Group Inc. (NYSE:CBG) this week, at prices that ranged from $23.12 to $23.94 per share. Jeffrey Ubben’s investment firm currently owns 32.31 million shares of the commercial real estate services and investment firm, which constitute 9.67% of its outstanding shares. The company had an exceptional 2015 in terms of financial performance and expects to continue delivering strong bottom- and top-line growth in the quarters to come. However, the stock has plummeted by nearly 32% since the beginning of 2016, pushing the company’s valuation down to earth.

CBRE Group Inc. (NYSE:CBG) reported revenue of $10.9 billion for 2015, which marked an increase of 20% year-over-year and by 26% in local currency. At the same time, its adjusted net income grew by 23% year-over-year to $689.2 million. It should be mentioned that the company’s largest expense represents compensation, as its sales and leasing employees are paid on a commission and bonus basis; hence, it appears that CBRE is well-positioned to tackle any potential worsening market conditions. In the meantime, the company has a forward P/E multiple of 9.36, which rests substantially below the average of 15.87 for the S&P 500 companies. However, it remains to be seen how current economic trends will impact the commercial real estate markets, which have been partly stimulated by the availability of low-cost credit in recent years. David Harding’s Winton Capital lifted its position in CBRE Group Inc. (NYSE:CBG) by approximately 478,000 shares during the final quarter of 2015, to 1.07 million shares.

In a Schedule 13G filing, Jacob Gottlieb’s Visium Asset Management LP reported owning 1.89 million shares of SAGE Therapeutics Inc. (NASDAQ:SAGE), which account for 5.9% of the company’s total shares. The investment firm owned 902,948 shares of the clinical-stage biopharmaceutical company at the end of September, as disclosed by the fund’s 13F for the third quarter.

SAGE Therapeutics focuses on developing treatments to tackle life-altering central nervous system disorders, with its lead product candidate being SAGE-547, an intravenous agent in Phase 3 clinical development for the treatment of super-refractory status epilepticus (SRSE). The company started the STATUS Trial, a Phase 3 clinical trial that studies SAGE-547 as a treatment for patients with SRSE, during the third quarter of 2015 and anticipates releasing results from the trial in the second half of 2016. Earlier this year, SAGE Therapeutics Inc. (NASDAQ:SAGE) conducted an underwritten public offering of 3.16 million shares of common stock at a price of $47.50 per share, along with a greenshoe option to purchase up to an additional 473,684 shares. The shares of SAGE are down by 25% over the past 12 months after having lost 47% thus far in 2016. Ken Griffin’s Citadel Advisors LLC jettisoned its 127,546-share stake in SAGE Therapeutics Inc. (NASDAQ:SAGE) during the fourth quarter.

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