Bill Ackman Was Right About J.C. Penney (Forbes)
Hedge Fund billionaire William Ackman has acknowledged that his big investment in J.C. Penney Company, Inc. (NYSE:JCP) was a mistake, but his decision to get out of the struggling retailer’s stock in late August increasingly looks like a brilliant move. Investors are staging a stunning exit out of J.C. Penney this week, particularly on Wednesday when the stock tumbled by 15% and hit a 13-year low. The shares rebounded a bit on Thursday, increasing nearly 3% to $10.42 after a very volatile day of trading. In late August, Ackman unloaded his Pershing Square’s stake in J.C. Penney for $12.91 per share in a $500 million block trade arranged by Citigroup Inc (NYSE:C) that included a relatively tiny discount to where the shares were then trading…
Following Icahn Into Nuance Could Reward Investors (DailyFinance)
Following a legendary investor into a stock can be a compelling proposition, but should investors actually do it? Recently, Carl Icahn has been in the news with huge gains from positions in Apple, Netflix, Inc. (NASDAQ:NFLX), and Herbalife Ltd. (NYSE:HLF) to name a few. One rarely mentioned position is the one that Icahn has been accumulating in Nuance Communications Inc. (NASDAQ:NUAN) on each drop of the stock. While Icahn has been very successful with numerous positions, the biggest risk for somebody following his moves or any other legendary investor is that they can exit a position and cause the stock to crash before the small investor even knows what happened.
A ten-year marriage and still no itch (HedgeWeek)
Custom House has been an active supporter of the financial services industry in Malta for almost ten years, since before Malta joined the EU. Since then, Malta has grown, as we had predicted, although at a much faster rate than I had anticipated all those years ago. Of course, next to Luxembourg and Dublin – the two EU Goliaths in the international hedge funds servicing world – Malta is still David looking for a suitable little pebble for his sling shot. In my experience over the last ten years, Malta’s “little pebble” has been well represented by the approach of the MFSA (the Maltese Regulator), which I would describe as a combination of efficiency and pragmatism.
CEO to retire as Air Products strikes deal with Ackman (Reuters)
Air Products & Chemicals, Inc. (NYSE:APD) Chief Executive John McGlade will retire next year and the industrial gas producer appointed three new independent directors, avoiding a fight over board membership with activist investor Bill Ackman. Air Products shares rose as much as 6.9 percent, taking gains to almost a quarter since Ackman’s Pershing Square starting building up a $2.2 billion holding in June. Ackman argued the company was undervalued and lagged peers after Pershing Square revealed a 9.8 percent stake that made it Air Products’ largest shareholder.
Hedge Funds Are Testing The Advertising Waters (HedgeCo)
Hedge funds seem to be wary of being the first to advertise under the new JOBs Act. Evan Rapoport, founder of industry portal HedgeCo.net, said yesterday. ”While hedge funds are finally allowed to advertise, we believe that funds will be cautious in adopting general solicitation. No one wants to be first and sign up to be the regulators’ guinea pig, but I do think that if you work with advertisers that have familiarity with securities regulations, the early adopters have a large opportunity to launch successful campaigns.”
Jon Little’s Northill Capital swoops on hedge fund firm (CityWire)
Northill Capital, the group founded by former BNY Mellon vice chairman Jon Little, has launched a takeover bid for Alpha Strategic, which finances hedge funds. Alpha Strategic is already 51% owned by Northill, and has revealed that it received an offer today from Northill to acquire the remaining shares for 25p each, a slight premium to yesterday’s closing price of 19p but far below the 120p level at which Alpha Strategic floated in 2005. Alpha Strategic’s board confirmed that it was ‘considering this approach and will make a further announcement in due course’.
Commodity Trading Advisors, puzzled by Fed, head for third year of losses (GlobalPost)
Long-term trend-following hedge funds are heading for a third straight year of losses unless the commodity and financial markets they trade in settle into a more predictable pattern, which does not seem likely given the Federal Reserve’s mixed signals on the U.S. economic stimulus. Known generically as “managed futures”, or Commodity Trading Advisors (CTAs), many trend followers were whipsawed in the first half by market gyrations over whether the Fed would cut its bond buying this year. More volatility seems likely; last week, the Fed said it needed more time to decide.
Ex-Hedge Fund Head Gets 2 1/2 Years For Lying About Losses (Law360)
Thomas Hampton, the former head of Arizona-based hedge fund Hampton Capital Markets LLC, was sentenced on Thursday to 30 months in prison for hiding millions of dollars in trading losses from his investors. U.S. District Judge Robert W. Sweet imposed the prison sentence at a hearing in a New York federal court. Hampton pled guilty in April to securities fraud, admitting that Hampton Capital, which dealt in exchange-traded funds, told investors that the fund was making money when it was in fact suffering substantial losses…
Marc Faber: Chinese growth may slow to 4% (CNBC)
Man Group goes long on Asian analyst recommendations (FT)
Emerging markets may be out of favour, but Asian analysts trounce their peers in Europe and the US on the success of their recommendations, according to the world’s second-biggest hedge fund. Research by London-based Man Group, covering more than 35,000 different buy or sell ratings, found that buy recommendations of Asia-based analysts outperformed benchmarks by an average of 4.3 per cent in the 100 days after they were made. In comparison, UK, European and US analysts’ recommendations managed 1.5 per cent.
Here’s What This $32 Billion Hedge Fund Company Bought (DailyFinance)
Every quarter, many money managers have to disclose what they’ve bought and sold, via “13F” filings. Their latest moves can shine a bright light on smart stock picks. Today let’s look at investing giant Adage Capital Management, which is one of the biggest hedge fund companies around, with a reportable stock portfolio totaling more than $32.4 billion as of June 30, 2013. It was founded by Phillip Gross and Robert Atchinson, and it invests money for university endowments and charitable foundations, among others. As of 2011, the team had outperformed the S&P 500 by 3 percentage points annually, on average, since inception in 2001. So far this year, it has added a solid $4 billion in assets.
$2B Boise Deal Docs Give Hedge Fund Told-You-So Moment (Law360)
Packaging Corp. of America was initially interested only in half of Boise Inc., according to new documents released Thursday that shed light on their $2 billion merger and lend some weight to arguments made this week by a hedge fund opposing the deal. Documents filed with the U.S. Securities and Exchange Commission show that after making initial offers at $10.25 and $11 per share for the entire company, PCA said in June that it was no longer interested in Boise’s paper business, which is separate from,…
Apple BUYBACK Programme Underway? Carl Icahn Net Long or Net Short Apple? (IBTimes)
Back in April, Apple (NASDAQ:AAPL) announced its plan of what seems like the largest buyback programme that might be happening in the market, targeted by 2015 – $60 billion. Come the month of June, Apple Inc. (NASDAQ:AAPL), had reported that it already bought $16 billion worth of its own stock. This figure was more than 25 per cent of its eleven-quarter allocation in the span of one quarter. “Apple’s massive fiscal third quarter repurchase action looks like it may well be a buy-low move. The stock opened the quarter at $442 per share, hit a quarter low of $392 and ended at $409,” reported Carla Fried of YCharts.
Soros Adviser Turned Lawmaker Sees Crisis by 2020: Japan Credit (BusinessWeek)
FTakeshi Fujimaki, a former adviser to billionaire George Soros and now a member of Japan’s upper house of parliament, said a fiscal crisis in Asia’s second-biggest economy is inevitable and neither a higher sales tax nor the 2020 Olympics will be able to stop it. “I decided to become a politician because I think financial crisis will come sooner or later,” Fujimaki said in a Sept. 24 interview in Tokyo. “This total debt will continue to increase. I don’t think Japan can survive until 2020.”
Why Not Own Hedge Funds on the Cheap? (WSJ)
The thinking is typical for many in the private equity industry: It is better to be the owner of a company than its consumer. Neuberger Berman Group thinks the situation is no different with hedge funds. Speaking at the Dow Jones Private Equity Analyst Conference on Thursday in New York, Anthony Tutrone, who heads NB Alternatives Group, said hedge funds are a good part of the asset-management business. “If I can buy the general partner on the cheap, why not do that?” he said.
Bigger Investors Do Better When It Comes to Hedge Fund Investing (InstitutionalInvestorsAlpha)
Hedge funds shot to fame for regularly posting superior performance in the 1990s. But those days are over. Sure, a handful of managers still rack up outsize gains from time to time, some more frequently than others. But for the most part, the cottage industry we came to know and love for producing gargantuan gains in the 1990s has morphed into a big business that excuses itself for regularly underperforming the popular benchmarks with the promise that it will preserve investors’ hard-earned money when the markets tank every few years.
Recommended Reading:
Mario Gabelli, Gamco Drop Some Shares of iGo
Hale Capital Partners Has a Penchant For FalconStor’s Preferred Stock
The Scoop on Bill Ackman’s Air Products & Chemicals Bombshell
