Hedge Fund Links ~ 12/2/16

Summary of the Robin Hood conference: Einhorn, Tepper, Druckenmiller etc [ValueWalk]

Profile of Renaissance Technologies' secretive Medallion Fund [Bloomberg]

Reflections on the Trump Presidency, after the election [Ray Dalio]

How T. Boone Pickens sits tight in the riskiest of businesses [NYTimes]

The next generation of hedge fund stars: data-crunching computers [NYTimes]

Treasury officials are warning hedge funds could create the next big crisis [Vox]

Bill Ackman's 2016 fortune: down, but far from out [NYTimes]

Omega's Einhorn sees Trump's policies boosting stocks [Reuters]

Tourbillon's Jason Karp says Trump will make stock pickers great again [Reuters]

John Paulson got Trump elected and now has favor to ask [Vanity Fair]

Jim Chanos says Valeant was biggest loser ever for hedge funds [CNBC]

Credit Suisse said raising $2 billion for hedge fund stakes [Bloomberg]

Tyrian Investments to close [Reuters]

Hedge fund strategies no longer correlated with equity returns [Investing]

Female fund managers are a rarity across the globe [Morningstar]

This is why alternatives are worth it [ValueWalk]

Fairholme Capital Adds To Sears Canada Position

Bruce Berkowitz's investment firm Fairholme Capital has filed a 13D on shares of Sears Canada (SRSC).  Per the filing, Fairholme now owns 20% of SRSC with 20.37 million shares.

This is an increase of 153,354 shares since the end of the third quarter.  The filing was made due to activity as recent as November 29th with the bulk of their purchase coming at $1.79 per share.

You can view the rest of Fairholme's equity portfolio in the new issue of our newsletter here.

Per Yahoo Finance, Sears Canada "operates as a multi-format retailer in Canada. It operates department stores that offer a range of merchandise, including apparel, home fashions, and appliances; home stores, which provide home furnishings, appliances, and home electronics; outlet stores that sell surplus merchandise."

20% Off Boyar's Forgotten Forty Report: Special Offer for Market Folly Readers

Each year, Boyar Research publishes their Forgotten Forty report which features the 40 stocks they believe have the greatest potential for capital appreciation in the year ahead, with an emphasis on near-term catalysts.

Their 2017 report will be released soon and Boyar has kindly given Market Folly readers a special 20% discount if you purchase by December 12th.

Each stock profiled in their report features a one page write-up summarizing the investment thesis, valuation, and what the potential catalyst is.

Boyar is also giving our readers a complimentary copy of their Guide to Profiting From Uncertainty.  This 100+ page report features in-depth research on 4 additional stocks.

Free Copy of Last Year's Report

To see what you can expect from the Forgotten Forty report, we've received permission from Boyar to post last year's edition for free which you can download here. 

And then you can save 20% off this year's Forgotten Forty report here.

Performance of Stocks in the Forgotten Forty Report

As you can see below, the Forgotten Forty has significantly outperformed the major indices on a 3, 5, 10, and 15 year basis.  Also, last year's report has outperformed the S&P by 400 bps and eight of the stocks profiled returned north of 31% each.

Special Discount Expires in 11 Days

This special 20% discount for our readers expires December 12th, so take advantage before it's too late.  Thanks again to Boyar for their generosity.

To receive your 20% discount, please click here.

What We're Reading ~ 11/30/16

Warren Buffett's meeting with University of Maryland students [UMD]

Is the next financial crisis on its way? [Steve Eisman]

A write-up on the impending Hilton (HLT) spinoff [Clark Street Value]

CBRE (CBG): industry deep dive to detect an emerging moat [Punch Card]

A look at Discovery Communications (DISCA/K) [Contrarian Edge]

Sustainable sources of competitive advantage [Collaborative Fund]

Why deep learning matters and what's next for AI [Algorithmia]

The unexpected genius of Facebook's Mark Zuckerberg [Fortune]

Google's online travel adventure upsets its biggest advertisers [Bloomberg]

A billionaire's dreams of creating a guns empire [NYMag]

If oil refiners crash, so will the economy [WSJ]

Mastercard, Visa set to reap spoils of India's war on cash [Bloomberg]

How Best Buy (BBY) fought Amazon [WSJ]

The evolution of media & entertainment: conversation with CEOs [YouTube]

How to get comfortable with being umcomfortable [Inc]

Why gut feelings may really help you make risky decisions [Washington Post]

Why stoicism is one of the best mind-hacks ever devised [Aeon]

Paulson & Co Sells Some Extended Stay America / ESH Hospitality

John Paulson's hedge fund firm Paulson & Co has submitted numerous SEC filings regarding its position in Extended Stay America (STAY) and ESH Hospitality.

Per a Form 4, Paulson sold 4.67 million shares of STAY and ESH Hospitality on November 18th at $14.76 as part of a secondary offering.  Following this sale, Paulson & Co still owns 16.8% of the company with 33 million shares of STAY.

You can see the rest of Paulson & Co's portfolio in the newly released issue of our Hedge Fund Wisdom newsletter.

Extended Stay America and ESH Hospitality are paired shares.  Per the filing, "Each paired share is comprised of one share of common stock of Extended Stay America and one share of Class B common stock of ESH Hospitality, which shares are paired and traded as a single unit.

Per Google Finance, Extended Stay America is "an integrated owner/operator of company-branded hotels in North America. The Company operates in hotel operations segment. Its business operates in the extended stay lodging industry. It owns and operates approximately 630 hotels comprising over 69,400 rooms located in approximately 40 states across the United States and in Canada. It owns and operates its hotels under its core brand, Extended Stay America, which serves the mid-price extended stay segment. In addition, it owns and operates over three Extended Stay Canada hotels. It operates its hotels owned by ESH Hospitality, Inc. (ESH REIT). The hotels are operated by the Operating Lessees, subsidiaries of the Company and are managed by ESA Management LLC (ESA Management), a subsidiary of the Company. ESH Strategies, a subsidiary of the Company, owns the brands related to its business. The Company's extended stay hotels are designed to provide lodging or apartment accommodations." 

This is the second time Paulson has trimmed its Extended Stay America position in the past few months.

Balyasny Asset Management Boosts Emerge Energy Services Stake

Dmitry Balyasny's hedge fund firm Balyasny Asset Management has filed a 13G with the SEC regarding shares of Emerge Energy Services (EMES).  Per the filing, Balyasny now owns 8.2% of EMES with 2.26 million shares.

This is an increase in their position size by over 1 million shares since the end of the third quarter when they owned 1.17 million shares.  The filing was made due to activity on November 18th.

For more from this fund, we've highlighted other recent portfolio activity from Balyasny here.

Per Google Finance, Emerge Energy Services "owns, operates, acquires and develops a portfolio of energy service assets. The Company's segments include Sand segment, Fuel segment and Corporate. The Company's Sand segment consists of the production and sale of various grades of industrial sand primarily used in the extraction of oil and natural gas, as well as the production of building products and foundry materials. Its Fuel segment operates approximately two terminals and over two transmix processing facilities that are located in the Dallas-Fort Worth, Texas area and Birmingham, Alabama. In addition to refining transmix, the Fuel segment sells a suite of complementary fuel products and services, including third-party terminaling services, certain reclamation services and blending of renewable fuels. The Company's other services include blending of renewable fuels into petroleum products, and the manufacture of biodiesel at its Birmingham facility."

Carlson Capital Trims Forestar Group & Archrock Positions

Clint Carlson's hedge fund firm Carlson Capital has filed two separate 13D's with the SEC.

Carlson Trims Forestar Group Position

First, Carlson has submitted a 13D filing on Forestar Group (FOR) which indicates they now own 7.55% of FOR with 2.54 million shares.  This is down 323,800 shares from the 2.86 million shares they owned at the end of the third quarter. 

The filing shows they were selling at various dates in November, and as recently as November 21st at prices ranging from $11.60 to $12.8064.

Per Google Finance, Forestar Group is "a residential and mixed-use real estate development company. The Company operates through three segments: Real Estate, Oil and Gas, and Other Natural Resources. Its Real Estate segment secures entitlements and develops infrastructure on its lands for single-family residential and mixed-use communities, and manages its undeveloped land, commercial and income producing properties, mainly a hotel and its multifamily properties. Its Oil and Gas segment is an independent oil and gas exploration, development and production operation and manages its owned and leased mineral interests. Its Other Natural Resources segment manages its timber, recreational leases and water resource initiatives. The Company owns directly or through ventures interests in approximately 60 residential and mixed-use projects consisting of over 7,000 acres of real estate located in approximately 10 states and approximately 20 markets."


Also Trims Archrock Stake

Second, Carlson Capital also submitted an SEC filing regarding their stake in Archrock (AROC).  Per the filing,  Carlson owned 12.17% of the company with 8.47 million shares as of November 18th. 

However, Carlson has continued selling per a separately filed Form 4 with the SEC.

Some of their recent activity includes selling 453,433 shares in total on November 22nd, 23rd, and 25th at prices around $13.4951 to $13.7899.  At latest tally, Carlson owned 7.79 million AROC shares.

Per Google Finance, Archrock is "formerly Exterran Holdings, Inc., is a natural gas contract operations services company. The Company also provides natural gas compression services to customers in the oil and natural gas industry throughout the United States and supplies aftermarket services to customers that own compression equipment in the United States. The Company's segments include contract operations and aftermarket services. The contract operations segment primarily provides natural gas compression services to meet specific customer requirements. The aftermarket services segment sells parts and components, and provides operation, maintenance, overhaul and reconfiguration services to customers having compression and oilfield power generation equipment. The Company also has equity interest in Archrock Partners, L.P. (the Partnership), a master limited partnership that provides natural gas contract operations services to customers throughout the United States."

ValueAct Capital Reduces Allison Transmission Stake

Jeff Ubben's activist investment firm ValueAct Capital has filed a 13D with the SEC regarding its position in Allison Transmission (ALSN).  Per the filing, ValueAct now owns 6.4% of ALSN with 10.52 million shares.

Per a separately filed Form 4, they sold 2.9 million shares on November 17th at $31.78 and sold an additional 1.4 million shares on November 21st at $32.34.  After these sales, ValueAct still owns 10.52 million shares.

This is the second time ValueAct has trimmed its Allison Transmission stake in recent months.

Per Google Finance, Allison Transmission is "design and manufacture commercial and defense fully-automatic transmissions. The Company manufactures fully-automatic transmissions for medium- and heavy-duty commercial vehicles and medium-and heavy-tactical the United States defense vehicles. The Company operates through manufacture and distribution of fully-automatic transmissions segment. The Company's transmissions are used in a range of applications, including on-highway trucks (distribution, refuse, construction, fire and emergency), buses (primarily school, transit and hybrid-transit), motorhomes, off-highway vehicles and equipment (energy, mining and construction) and defense vehicles (wheeled and tracked). The Company's transmissions are sold under the Allison Transmission brand name and remanufactured transmissions are sold under the ReTran brand name. The Company has developed over 100 different models that are used in over 2,500 different vehicle configurations." 

Welling on Wall Street Interview With Boyar Value Group

Welling on Wall Street recently interviewed Boyar Value Group's Mark Boyar and Jonathan Boyar and talked about various topics including: their investment strategy, some of their current favorite stock ideas, and behavioral finance.

On investing, Mark Boyar noted that, "Patience is probably one of the most important elements of stock market investing.  First, you have to find the great business at a good price, then you have to have patience, the fortitude and the ability to withstand gyrations in the stock market.  That element is critically important."

They also share their thoughts on stocks such as Madison Square Garden (MSG), QVC (QVCA), Discovery Communications (DISCA/K) and more.

Check out the full interview embedded below:



You can download a .pdf copy here.

12 West Capital Exits Diana Containerships & Euroseas Positions

Joel Ramin's hedge fund 12 West Capital has filed two 13D's with the SEC regarding shares of Diana Containerships (DCIX) and Euroseas (ESEA). 

Per the filings, 12 West no longer owns any shares of either company as of November 17th.  Shares of DCIX and ESEA spiked massively in mid-November (422% and 172% respectively) and it looks like the fund took advantage of that to liquidate its positions.

They sold DCIX shares at $6.26, $5.51 (weighted average), and $4.89 on November 17th and 18th.

Per Google Finance, Diana Containerships is "engaged in the business of ownership of containerships. The Company is engaged in the seaborne transportation industry through the ownership of containerships and operates its fleet through Unitized Ocean Transport Limited (UOT), a subsidiary of the Company. UOT provides the Company and its vessels with management and administrative services. The Company's fleet consists of approximately seven panamax and over six post-panamax containerships with a combined carrying capacity of approximately 66,440 twenty-foot equivalent unit (TEU) and a weighted average age of over 9.7 years. The Company's vessels include SAGITTA, CENTAURUS, PAMINA, CAP DOUKATO and PUCON."

Per Google Finance, Euroseas is "engaged in the shipping business. The Company is an owner and operator of drybulk and container carrier vessels and is a provider of seaborne transportation for drybulk and containerized cargoes. Eurobulk Ltd. manages the Company's operations. The Company also owns and operates dry bulk carriers that transport major bulks, such as iron ore, coal and grains, and minor bulks, such as bauxite, phosphate and fertilizers. The Company has a fleet of 12 vessels, including Kamsarmax drybulk carrier, Panamax drybulk carriers and Handymax drybulk carrier, Intermediate containerships, Handysize containerships, and Feeder containerships. The Company’s five drybulk carriers have a total cargo capacity of 351,272 deadweight tons (dwt), and its seven containerships have a cargo capacity of 11,828 twenty-foot equivalent units (teu)."

Joho Capital Adds To GrubHub Position

Robert Karr's Joho Capital has filed a 13G with the SEC regarding its position in GrubHub (GRUB).  Per the filing, Joho now owns 5.1% of the company with over 4.37 million shares.

This means they've increased their position size by 935,100 shares since the end of the third quarter when they owned 3.43 million shares.  The filing was made due to activity on November 14th. 

Per Google Finance, GrubHub is "a provider of an online and mobile platform for restaurant pick-up and delivery orders. The Company connects more than 40,000 local restaurants with diners in more than 1,000 cities across the United States. For restaurants, Grubhub generates higher margin takeout orders at full menu prices. The Company's target market is primarily consists of independent restaurants. Diners can access the platform through www.grubhub.com and www.seamless.com. The Company offers diners access to the network through its mobile applications designed for iPhone, iPad, Android, iWatch and Apple TV devices. The Company provides a corporate program that helps businesses address problems in food ordering and associated billing. In certain markets, the Company also provides delivery services to restaurants on its platform that do not have their own delivery operations. Allmenus.com and MenuPages.com provide an aggregated database of approximately 380,000 menus from restaurants."