Sprint Nextel Corporation (S), Arbitron Inc. (ARB): This Hedgie Was Heavy On The M&A Front Last Quarter

Next up is wireless network operator Sprint Nextel Corporation (NYSE:S). The 13F has the fund holding 6,755,811 shares worth about $42 million at the time of filing; this is a moderate increase in stake from the prior quarter, when just above 6 million shares were reported to be held. Price action for this stock has been very bullish, trading up from $2.32 about a year ago to $7.25 as of the time of this writing. During the first quarter of 2013, the company reported operating income of $29 million, bringing its adjusted OIBDA to $1.5 billion, up over 25% year-over-year, the highest increase in more than six years. Sprint Nextel Corporation (NYSE:S) is caught in a three-way merger rumor with SoftBank and DISH Network Corp. (NASDAQ:DISH), though only one of the latter two will win. On the bright side, a bidding war will continue to push shares of Sprint Nextel Corporation (NYSE:S) higher in the meantime; this is a smart investment by Bader and Halcyon.

Rounding out the top five is restaurant operator DineEquity Inc (NYSE:DIN), with the fund reporting 563,690 shares worth $38.776 million. This seems to be another new position, initiated by the fund this quarter. Although price action for DineEquity Inc (NYSE:DIN) was very bullish in 2012, it seems to have consolidated in recent months, and is currently trading near the $72.50 mark. For 2013’s first quarter, adjusted net income was reported at $21.8 million, which works out to adjusted earnings per diluted share of $1.14. This compares to $24.6 million, or adjusted earnings per diluted share of $1.36, for the first quarter of 2012.

DineEquity Inc (NYSE:DIN)’s valuation is decently attractive, but one thing worth watching is fellow hedgie Scout Capital’s positioning in the company. Scout has taken an activist position in the company, and as of earlier this month now owns a 6.6% stake.

Conclusion

The fund has clearly made some successful trades during the past two quarters. Given Halcyon’s prior successful trades focusing on possible mergers and special situations, the recently opened position in restaurant operator Dine equity may be particularly worth watching. We’d also keep a close eye on Sprint Nextel Corporation (NYSE:S)’s merger merry go-round, SemGroup Corp (NYSE:SEMG) and its ability to integrate Chesapeake Energy Corporation (NYSE:CHK)’s assets into operations, and Arbitron Inc. (NYSE:ARB)’s action pre-merger—it’s expected to finalize this summer. Continue preparing for 13F-filing season here.

Disclosure: none