Editor’s Note: Related Tickers: Hess Corp. (NYSE:HES), Tim Hortons Inc. (USA) (NYSE:THI), Metlife Inc (NYSE:MET)
Billionaire and hedge fund manager David Tepper was recently reported to be buying shares of Metlife Inc (NYSE:MET). Mr. Tepper is the founder of Appaloosa Management which has produced gains that have made Mr. Tepper a billionaire and many fortunes for his investors. It’s easy to see why Mr. Tepper has been a buyer of MetLife shares because the stock appears undervalued. MetLife shares are trading significantly below book value, which is about $59.04 per share. It is also trading for just around 7 times earnings. This is nearly half of the average for the S&P 500 Index (SPY), which is currently trading for about 15 times earnings. Furthermore, this stock could start attracting a whole new group of income investors thanks to a recent increase in the dividend.
Buffett Disciple Jason Donville Weighs Energy Stocks (Bloomberg)
Jason Donville, whose fund has outperformed Canadian stocks for five years using Warren Buffett’s value investing strategy, is eyeing Pulse Seismic Inc. (PSD), Total Energy Services Inc. (TOT) and other energy stocks after the recent resources rout. “We’re sharpening our pencils on energy right now because it’s very bombed out and the summertime is a great time to go looking for bargains,” said Donville, chief executive officer at Donville Kent Asset Management Inc. in Toronto. His DKAM Capital Ideas Fund, a hedge fund with about C$70 million ($69.5 million) under management, has produced an average annual return of 24 percent since its inception in October 2008, compared with a 2.9 percent average return for the Standard & Poor’s/TSX Composite Index in the same period, according to Donville Kent’s website.
Activist hedge fund stirs the pot at Tim Hortons (Globe and Mail)
Tim Hortons Inc. (USA) (NYSE:THI) is under pressure from an activist investor that wants the company to pare back its U.S. growth and borrow billions to fund a share buyback. Boston-based Highfields Capital Management, which owns about 4 per cent of the coffee chain, said it met with management in mid-March to propose the strategies it believes will immediately boost earnings per share and increase shareholder value in the long-run. The hedge fund has also pressed management to spin out the company’s real estate assets into a real estate investment trust. Tim Hortons refused to comment on Highfields’ plan.
Netflix, Inc. (NFLX), Time Warner Inc (TWX) & Five Takeover Rumors And the Hedge Funds Who Own Them (Insider Monkey)
Billionaire activist Carl Icahn has taken a large stake in Netflix, Inc. (NASDAQ:NFLX) and there has been some speculation that he might push to sell the company. He owned 5.5 million shares as of the beginning of this year (find Icahn’s favorite stocks). Other analysts have claimed that Netflix, Inc. could be a target purchase for a large technology company such as Microsoft to help win the “living room wars” between different consumer devices. Netflix, Inc. (NASDAQ:NFLX)’s stock price has been very volatile over the past few years, and is quite expensive at present with a forward earnings multiple of 69.
Advisory firm recommends Hess shareholders elect new board members (Reuters)
Proxy advisory firm Glass Lewis told Hess Corp. (NYSE:HES)’s shareholders late on Tuesday they should vote to elect five new board members nominated by activist hedge fund Elliot Management. Hess has been under pressure from the hedge fund, which owns a 4.5 percent stake in the oil and gas company, to implement changes, including the election of independent directors to the board, to increase shareholder value. “We believe Elliott has submitted a compelling case to suggest the Hess board has been largely ineffective at overseeing current management,” Glass Lewis said in a note.
SAC, Viking Questioned in Grassley’s Medicare Rate Probe (Bloomberg)
SAC Capital Advisors LP and Viking Global Investors LP are being questioned by Senator Charles Grassley in his review of a possible leak of a U.S. government decision on payment reimbursements to health insurers. Grassley, an Iowa Republican, sent letters yesterday to the investment firms, asking about…
…their dealings with “political intelligence” firms that try to predict government decisions. A Height Analytics LLC report on April 1 told clients more than 40 minutes before the official announcement that the U.S. would reverse plans for a Medicare Advantage rate cut.
Rubicon Vets Launch $300M Global Macro Hedge Fund (FINalternatives)
At long last, Rubicon Fund Management’s former chief investment officers are back in the hedge fund industry. Timothy Attias and Santiago Alarco’s Canosa Capital debuted today with about US$300 million, Bloomberg News reports. The London-based global macro fund is backed by Sweden’s Brummer & Partners, which will also own a stake in Cansoa. Alarco and Attias’ new fund will invest in fixed-income, currencies, equity indices and commodities. The highly-liquid portfolio will be structured around three to four themes with six or seven trades in each.
Berkshire Hathaway Inc. (BRK.B), And Warren Buffett’s Newest Buy (Insider Monkey)
Hedge fund Centaurus to return cash to investors – source (Interactive Investor)
Hedge fund firm Centaurus Capital is returning all money to external investors after disagreements with clients about where the best money-making opportunities lie, a source familiar with the firm said. The partners of the London-based firm will continue to trade using their own cash, the source added. Centaurus recently sat down with investors and decided it wanted to focus on general event-driven opportunities such as bets on company takeovers rather than the risk arbitrage strategies which many clients preferred.
Evans Randall Targets Hedge Funds With Mayfair Deal (Bloomberg)
Evans Randall Ltd., half owner of the London tower known as the Gherkin, bought 60 million pounds ($93 million) of office property in the city’s Mayfair district. The buyout firm purchased a 34,000 square-foot (3,150 square-meter) office building at 15 Sackville Street, Evans Randall said yesterday in a statement. It also joined with Al Salam Bank Bahrain in the purchase of 4 and 5 Queen Street, where it will develop six luxury apartments, according to the statement. “We intend to lease the vacant offices to companies where demand is strong such as hedge funds, boutique investment firms and perhaps technology, media and communications firms on the lower floors,” Evans Randall Chairman Michael Evans said in a telephone interview.
Kass, Berkshire’s Bear, is ready to “surprise” Buffett (Chicago Tribune)
Hedge fund trader Doug Kass had his first brush with fame at the age of 10, when he appeared on a television quiz show, Tic-Tac-Dough, and won every day for a week. More than five decades later, Kass might find another sort of celebrity this Saturday when he will have the opportunity to quiz billionaire investor Warren Buffett at Berkshire Hathaway Inc’s annual meeting in Omaha, Nebraska. Buffett in March handpicked Kass, founder of hedge fund Seabreeze Partners Management Inc, to be Berkshire’s first “credentialed bear” to attend the meeting, and “spice things up.
Financier faces up to 20 years (Charlotte Observer)
A Charlotte hedge fund manager has agreed to plead guilty to securities fraud for hiding investment losses that cost his victims at least $8.9 million, according to court documents. Stephen Ewing Maiden agreed to plead guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison and up to a $250,000 fine, according to an agreement signed in February by Assistant U.S. Attorney Mark Odulio. A final plea hearing has not been scheduled. Maiden’s attorney, Richard Glaser Jr., declined to comment. A spokeswoman for the U.S. Attorney’s Office for the Western District of North Carolina also declined to comment. According to court records, Maiden hid losses in his hedge fund, called the Maiden Capital Opportunity Fund, by routinely sending “bogus account statements” to investors and the fund’s administrator.
