Get A Load Of Cheyne Capital’s Top Stock Picks For Q4

#3 Strategic Hotels and Resorts Inc. (NYSE:BEE)

Shares Owned by Cheyne Capital (as of September 30): 1.78 million shares

Value of Holding (as of September 30): $24.54 million

Strategic Hotels and Resorts Inc. (NYSE:BEE)’s shares gained 13.78% during the third quarter, and are currently trading slightly above the $14 price level. At the beginning of September, the luxury hotel company announced that Blackstone Real Estate Partners VIII LP agreed to buy it for approximately $4 billion. Thus, it is quite clear that Cheyne Capital Management aims to benefit from the discrepancy between the current share price and the sale price of $14.25 per share. It is hard to believe that the London-based firm had acquired stakes in the three aforementioned companies prior to the acquisition announcements, so most probably the firm is employing a merging arbitrage strategy. Dmitry Balyasny’s Balyasny Asset Management added a 634,100-share position in Strategic Hotels and Resorts Inc. (NYSE:BEE) to its portfolio during the June quarter.

#2 Cytec Industries Inc. (NYSE:CYT)

Shares Owned by Cheyne Capital (as of September 30): 488,937 shares

Value of Holding (as of September 30): $36.12 million

Cheyne Capital Management added a new position in Cytec Industries Inc. (NYSE:CYT) during the latest quarter, during which the stock gained 22%. A few months ago, Belgian company Solvay agreed to purchase the U.S specialty materials and chemicals company for $5.5 billion in an all-cash deal. The transaction price per share equals $75.25, slightly above the current share price. This deal is set to enable the Belgian company to strengthen its “technology offerings to include advanced materials technology for the aerospace and automotive industries”, but will also integrate “Cytec’s specialty chemical portfolio into its existing line of advanced formulations”. John Burbank’s Passport Capital was the largest shareholder of Cytec Industries Inc. (NYSE:CYT) within our database at the end of the second quarter, with exactly 2 million shares.

#1 Sunoco LP (NYSE:SUN)

Shares Owned by Cheyne Capital (as of September 30): 368,500 shares

Value of Holding (as of September 30): $36.14 million

Sunoco LP (NYSE:SUN) represents the largest equity holding of Cheyne Capital Management at the end of the third quarter, accounting for 16.95% of its portfolio. The shares of the master limited partnership (MLP), which operates convenience stores and retail fuel sites, lost nearly 24% during the latest quarter. On August 28, Sunoco announced that one of its subsidiaries acquired a wholesale motor fuel distribution business that serves the northeastern United States for roughly $57 million. The MLP is expected to release its third quarter earnings report after the market close on November 4, so investors will get the chance to see the underlying potential of the newly-made acquisition. Murray Stahl’s Horizon Asset Management owned nearly 38,000 shares of Sunoco LP (NYSE:SUN) on June 30.

Disclosure: None