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Included In The Brand New Issue

- In-Depth Equity Analysis of a stock many hedge funds were buying in the quarter: a low-cost special servicer that is rolling up the industry at a high ROE.  Written by hedge fund analysts, this deep dive details a company background, overview of the business model, explanation of the industry, a look at the current situation, summary of key drivers, and a look at valuation, the bull case and the bear case

- Investment Thesis Summary of another stock hedgies acquired in Q3: a leading company in its industry with strong tailwinds

- See the Latest Portfolios of 25 Top Hedge Funds (full list of funds here)

- List of Consensus Buys & Sells from the quarter

- Expert Commentary on each fund's portfolio moves providing relevant context

Save time by seeing what hedge funds have been buying and selling all in one convenient document.  If you haven't already, see a free sample of a past issue here.


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Hedge Fund Short Positions in Sweden: Kynikos, Eton Park, Lone Pine & More

Continuing our coverage of hedge fund short positions in Europe, next up is Sweden.  New European rules are obliging hedge funds to disclose information about the most carefully guarded part of their business activities: short positions.

Since November 1st when the EU Regulation on short positions came into force, there has been a deluge of information from financial regulators in EU countries giving information on short positions across all market sectors.

Public disclosure is required for net short positions of shares that reach 0.5% of the issued share capital of the company concerned and again at each 0.1% increment above that.  Additionally disclosure is required publicly when the position subsequently falls below 0.5%.  Here are the latest disclosures in Swedish markets:


Hedge Fund Short Positions In Sweden Disclosed

Eton Park Capital: Short -1.39% Alfa Laval

Kynikos Associates: Short -0.69% Electrolux, -3.28% JM, -0.55% SSAB

Lone Pine Capital: Short -0.66% Electrolux, -0.54% Elekta, -0.81% Holmen

Marshall Wace: Short -0.56% SSAB

Maverick Capital: Short -2.22% Elekta



To see more hedge fund shorts, head to our other coverage:

 - Hedge fund short positions in the UK

- Hedge fund short positions in Germany

- Hedge fund short positions in France

- Hedge fund short positions in the Netherlands

- Hedge fund short positions in Belgium

- Hedge fund short positions in Finland

- Hedge fund short positions in Denmark
 

Hedge Fund Short Positions in Denmark: Greenlight, Blue Ridge, Lansdowne & More

Continuing our coverage of hedge fund short positions in Europe, next up is Denmark.  New European rules are obliging hedge funds to disclose information about the most carefully guarded part of their business activities: short positions.

Since November 1st when the EU Regulation on short positions came into force, there has been a deluge of information from financial regulators in EU countries giving information on short positions across all market sectors.

Public disclosure is required for net short positions of shares that reach 0.5% of the issued share capital of the company concerned and again at each 0.1% increment above that.  Additionally disclosure is required publicly when the position subsequently falls below 0.5%.  Here are the latest disclosures in Danish markets:


Hedge Fund Short Positions In Denmark Disclosed

Blue Ridge Capital: Short -1.82% Pandora, -4.47% Vestas Wind Systems

Citadel Europe: Short -0.65% FL Smidth & Co

Eton Park Capital: Short -2.14% Vestas Wind Systems

Greenlight Capital: Short -3.34% FL Smidth & Co

Lansdowne Partners: Short -0.88% H Lundbeck


Vestas Wind Systems is the most shorted stock in the Danish market. The total short position disclosed by Danish regulators is 10.35%. As only short positions of greater than 0.5% are disclosed it is likely that the total short interest figure in Vestas is considerably higher given that numerous other hedge funds most likely have short positions below the disclosure limit.

Also, it's worth pointing out Greenlight Capital's short of FL Smidth.  The Danish based company is engaged in the provision of equipment and services to the global cement and minerals industries.  Just recently, we highlighted how David Einhorn said to short iron ore as it seems he's bearish on materials.


To see more hedge fund shorts, head to our other coverage:

 - Hedge fund short positions in the UK

- Hedge fund short positions in Germany

- Hedge fund short positions in France

- Hedge fund short positions in the Netherlands

- Hedge fund short positions in Belgium

- Hedge fund short positions in Finland

- Hedge fund short positions in Sweden

Tiger Global Reveals New Groupon (GRPN) Stake

Chase Coleman's hedge fund firm Tiger Global Management has revealed a new position in Groupon (GRPN).  Per a 13G filed with the SEC yesterday after market close, Tiger Global has disclosed a 9.9% ownership stake in the company with 65 million shares.

According to Tiger Global's most recent 13F filing, the firm actually started their position in the third quarter as they owned 1.3 million shares as of the end of September.  However, they've obviously ramped their stake up considerably since then.  The 13G disclosure was filed due to portfolio activity on November 9th.


Groupon's Struggles

Shares of Groupon (GRPN) have been targeted by short sellers ever since its IPO as the company has struggled to gain footing.  Shares are down 87% since it came public.  And, with good reason.

The company originally started out in the "daily deals" space offering consumers deals on various products and services in local areas (an industry that has practically no barriers to entry).  Amazon.com invested in fellow-daily-deal-site LivingSocial and recently had to write off $169 million of their $175 million investment.

Groupon has amassed a large audience, but as the company has matured, they've flailed around with other ideas, trying to grasp on to a business model.

For instance, Groupon also entered the highly competitive payments industry when it launched 'Breadcrumb,' a point-of-sale system targeted at restaurants to allow them to run their business smoother.

They also expanded with "Groupon Goods" where they acquire physical items, hold the inventory, etc.  This segment has boosted revenues, but not necessarily profits.

Additionally, the company recently opened a physical concept store in Hong Kong as it attempts to provide a place for customers to buy and redeem products.

Some investors have called for founder & CEO Andrew Mason to step down.  Short sellers, on the other hand, love him as he doesn't seem to care about profitability.  Insiders currently own just under 56% of the company.


Why Buy Groupon Now?

The main question here is why is Tiger Global buying now?  Did it finally become too cheap?  As of the end of September, the company had $1.2 billion in cash and a market cap of only $2.2 billion.  Keep in mind that Google once offered $6 billion for Groupon a long time ago.

But as MicroFundy pointed out recently (his whole piece is worth reading), if you focus on the details, Groupon has $1.2b in cash and equivalents, but "$573m of that is owed to merchants and another $245m is set aside for things like refunds & subscriber awards.  All in all, when you look at the company's balance sheet, their current assets only exceed their current liabilities by a little more than $300M (or .47 per share)."

Tiger Global is known for making savvy internet investments (buying a stake in Facebook back when it was private being their most notable).  Perhaps they see GRPN as cheap?  Perhaps it's a potential takeover target?  Who knows, this is all speculation on our part.


A Few Other Hedgies Bought GRPN Too

John Thaler's hedge fund JAT Capital also purchased shares of GRPN in the third quarter.  According to their most recent 13F filed with the SEC, JAT bought over 9.4 million shares.

Even if JAT managed to buy GRPN at its lowest point in the third quarter (and assuming they still own it), they're still down on this position.  The news of Tiger's entrance, though, has boosted shares over 9% today.

Soros Fund Management also disclosed a position in GRPN in their Q3 13F filing: 2.5 million shares.  While these funds owned GRPN as of September 30th, there's no way to know if they still do.

There's also no way to know exactly how many hedge funds are short the stock since they're not required to disclose this.  However, in our conversations with various portfolio managers, there have been quite a few shorts in this name for some time.  And looking at Groupon's short interest, it appears as though 36 million shares were short as of October 31st, with that number peaking at 55 million back in July of this year.  

So as shares of Groupon have slid continuously, will Tiger Global's new big stake stop the bleeding?  It has, at least for today.  What happens in the future remains to be seen.

Why do you think Coleman bought GRPN?  Let us know in the comments.

Hedge Fund Short Positions in Belgium: Coatue, Maverick, Pennant & More

Continuing our coverage of hedge fund short positions in Europe, next up is Belgium.

New European rules are forcing hedge funds to disclose information about the most carefully guarded part of their business activities: short positions. Since November 1st when the EU Regulation on short positions came into force, there has been a deluge of information from financial regulators in EU countries giving information on short positions across all market sectors.

Public disclosure is required for net short positions of shares that reach 0.5% of the issued share capital of the company concerned and again at each 0.1% increment above that.  Additionally disclosure is required publicly when the position subsequently falls below 0.5%.  Here are the latest disclosures in Belgian markets:


Hedge Fund Short Positions Disclosed in Belgium

Coatue Management: Short -0.82% Delhaize Group

Pennant Capital: Short -0.84% Delhaize Group

Tiger Consumer Management: Short -0.84% Delhaize Group

Maverick Capital: Short -0.98% Delhaize Group

Wellington Management: Short -1.02% Dexia


Clearly supermarket group Delhaize (EBR: DELB) is a popular short with some of the more prominent long/short hedge funds.

Wellington Management’s short in Dexia (EBR: DEXB) is also interesting as the French and Belgium governments were involved in another bailout of the Belgium listed bank on November 8th. Dexia was first rescued with taxpayer funds in 2008 and last year became one of the most obvious casualties of the sovereign-debt crisis. Dexia is an interesting test case in how well national governments can co-operate to solve the European crisis. France, Belgium and Luxembourg have all made guarantees to Dexia.


To see more hedge fund shorts, head to our other coverage:

 - Hedge fund short positions in the UK

- Hedge fund short positions in Germany

- Hedge fund short positions in France

- Hedge fund short positions in the Netherlands

Infographic on the Hedge Fund Industry

Here's an interesting infographic from PerTrac on the hedge fund industry that highlights key industry milestones, facts on the composition of the industry, the most popular strategies and more.

Here's their graphic entitled Illuminating the World of Hedge Funds:

Greg Zuckerman on Prominent Hedge Fund Returns This Year

A WSJ interview with Greg Zuckerman highlights how hedge funds such as Appaloosa Management, Lone Pine Capital, and Tilden Park Capital are faring this year.  Zuckerman of course wrote the popular book, The Greatest Trade Ever and has covered hedge funds for some time now.


Hedge Fund Returns Thus Far This Year

Appaloosa Management: Up 25% this year.  Zuckerman points to manager David Tepper's ability to pivot correctly around bull/bear calls in the market.  While investors often consider him a distressed debt guy, he's also made money on airline stocks and various equities.  Apparently he's leaning bullish currently.

Lone Pine Capital: Up around 25% this year as well.  Zuckerman points to traditional stockpicking as Lone Pine's main success with Steve Mandel owning winners such as Apple (AAPL) and Gap (GPS).

Tilden Park Capital: Up around 30% ytd due to a wager on the housing market improving by manager Josh Birnbaum.

CQS LLP: Up around 27% in their flagship fund.  Michael Hintze's firm has been playing both debt and equity.


Embedded below is the video of Zuckerman's interview:



To see what Appaloosa and Lone Pine have been investing in lately, head to our Hedge Fund Wisdom newsletter as a brand new issue is less than a week away.