Darden Shares Could Jump 40% On Hedge Fund Plan (Barrons)
Activist hedge fund Barington Capital is close to releasing a report that will push for a restructuring of the struggling Darden Restaurants, Inc. (NYSE:DRI) chain. Barington believes the owner of Red Lobster and Olive Garden would unlock shareholder value by splitting into two companies and possibly creating a REIT to hold the company’s sprawling real estate portfolio. The 80-page report, compiled with investment bank Houlihan Lokey, expands upon the broad outlines of a plan Barington made public in October. By splitting, cutting costs, and monetizing real estate, Barington argues, Darden could send the shares from the current $51 to a range of $71 to $80.
Canadian “Gold Bug” Sidelined By Gold’s Dive (LiveTradingNews)
Canadian “Gold Bug” Sidelined By Gold’s Dive Gold’s 36% fall from its September 2011 record high made a casualty out of Canadian hedge fund manager Eric Sprott, one of the precious Yellow metal’s strongest advocates. Mr. Sprott’s flagship fund has fallen by more than 50% in Y 2013 in what will likely be the 3rd year running of double-digit percentage losses for his firm’s fund, according to documents sent to investors, the WS-J reports. Mr. Sprott once managed almost $3-B of hedge fund assets in Y 2008, in 2013 it down to about $350-M. His strong faith in Gold and other precious metals has cost him. Spot Gold finished at 1,238 Friday afternoon, down 25.3% YTD. Mr. Sprott has been sidelined within his own investment company,Sprott Inc. The firm announced last month that he will no longer be part of investment decisions.
George Soros Donates Funds to Help Heat Schools in Greece (GreekReporter)
Greek students have had a rough winter in extremely cold classrooms due to the lack of heating resources, resulting from local authorities who are simply unable to cover the unbearable cost of heating oil. The organization Open Society Foundation, founded by the great American investor George Soros, offers donations worth millions of euros in oil so that children can sit in a warm classroom. Schools in the 2 biggest municipalities of Greece have been lucky enough to have their oil tanks filled thanks to Mr. Soros’ donations.
Water shortages a crucial issue in China: Jim Rogers (WantChinaTimes)
American investor and author Jim Rogers says water shortage is the biggest problem in China. The country’s water resources are limited but reuse of water is still insufficient and groundwater is being overexploited, reports ifeng, the financial news site run by Phoenix New Media in Hong Kong. War, famine, civil war or recession can be overcome but drought cannot; people cannot build a society or a country without water, the investor said during an interview with the media. China is one of 13 countries with the poorest water resources per capita in the world. Its freshwater resources per capita are only one fourth of the global average. As of the second half of 2005, the country had a water shortage of six billion cubic meters.
Hedge Funds’ Natural Gas Bets Jump as Thermometer Drops: Energy (Bloomberg)
Hedge funds got more bullish on natural gas, betting the most on rising prices in 11 weeks as cold weather in the U.S. diminished fuel inventories. Money managers boosted net-long positions by 44 percent in the seven days ended Dec. 10, U.S. Commodity Futures Trading Commission data show. The total was the most since Sept. 24. Bullish wagers increased for a third week. Gas surged 6.6 percent during the report week as forecasts showed widespread below-normal temperatures. MDA Weather Services in Gaithersburg, Maryland, predicted it would be colder than average in most of the contiguous U.S. from Dec. 23 through Dec. 27. A government report on Dec. 5 showed a weekly drop in gas supply that surpassed analysts’ estimates.
The Other Reason Long-Short Managers Are Down This Year (InstitutionalInvestorsAlpha)
Pity the poor long-short manager. While most equity indexes are up 30 percent or more this year, the average hedge fund manager that simultaneously bets on stocks that go up and down is up a mere 9 percent or so through the third quarter. Many of these managers are beating or coming close to matching the stock indexes in their long portfolios but are understandably suffering sizable losses in their short books.
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