What We're Reading ~ 9/27/17

Your tolerance for investment risk is probably not what you think [WSJ]

Is value investing dead? Depends on how you measure it [WSJ]

What do the best investors do that the rest don't? [Behavioral Value]

We're going to need more Lithium [Bloomberg]

Mastering three strategies of organic growth [McKinsey]

DaVita: Warren and Charlie's excellent insurance gambit [SIRF]

Old interview with Chuck Akre - never sell the gems [Value Research]

The history of Sears predicts nearly everything Amazon is doing [The Atlantic]

Don't believe the headlines, traditional retailers are thriving online [VentureBeat]

How Kirkland Signature became one of Costco's biggest successes [WSJ]

Altaba's endgame could reward investors nicely [Barrons]

Netflix's Sarandos aims to build the next great Hollywood studio [Bloomberg]

Our entire credit bureau system is broken [The Verge]

Snapchat's influencers are fleeing to Instagram for money [Bloomberg]

How successful people make decisions differently [Fast Company]

Senator Investment Group Takes D.R. Horton Stake

Alex Klabin and Doug Silverman's hedge fund firm Senator Investment Group has filed a 13G with the SEC regarding shares of D.R. Horton (DHI).  Per the filing, Senator now owns 5.34% of the company with 20 million shares (inclusive of 5 million shares underlying call options).

This is a newly disclosed stake for the investment firm.  The filing was made due to portfolio activity on September 15th.

For more on this hedge fund, we highlighted another stock Senator has been buying.

Per Google Finance, DR Horton is "a homebuilding company. The Company constructed and sold homes in 27 states and 79 markets, as of September 30, 2015. The Company's segments include its 39 homebuilding divisions, its financial services operations and its other business activities. In the homebuilding segment, the Company builds and sells single-family detached homes and attached homes, such as town homes, duplexes, triplexes and condominiums. The Company's 39 homebuilding divisions are aggregated into six segments: East Region, South Central Region, Midwest Region, West Region, Southwest Region and Southeast Region. In the financial services segment, the Company sells mortgages and collects fees for title insurance agency and closing services. The Company has subsidiaries that conduct insurance-related operations; construct and own income-producing rental properties; own non-residential real estate, including ranch land and improvements, and own and operate oil and gas-related assets."

12 West Capital Shows Laureate Education Stake

Joel Ramin's hedge fund firm 12 West Capital has filed a 13G with the SEC regarding shares of Laureate Education (LAUR).  Per the filing, 12 West now owns 6.5% of the company with over 2.3 million shares.

This is a newly disclosed equity position for the firm.  The filing was made due to activity on September 15th.

Per Google Finance, Laureate Education "provides higher education programs and services to students through an international network of licensed universities and higher education institutions (institutions). The Company’s programs are provided through institutions that are campus-based and Internet-based, or through electronically distributed educational programs (online). It offers its educational services through six segments: Brazil; Mexico; Andean and Iberian; Central America and United States (U.S.) Campuses; Online and Partnerships; and Europe, Middle East, Africa and Asia Pacific (EMEAA). Its institutions also offer an education that emphasizes professional-oriented fields of study with undergraduate and graduate degrees in a wide range of disciplines. As of June 30, 2017, the Company’s global network of 69 institutions comprised 57 institutions it owned or controlled, and an additional 12 institutions that it managed or with which it had other relationships. "

Darsana Capital Shows Stake in Social Capital Hedosophia Holdings (IPOA.U)

Anand Desai's hedge fund firm Darsana Capital has revealed a stake in Social Capital Hedosophia Holdings (IPOA.U).  Per a 13G filed with the SEC, Darsana now owns 5.07% of the company with 3.5 million shares.

This is a new position for the firm as shares of IPOA.U were just floated recently.  Hedosophia is a vehicle used by Chamath Palihapitiya's Social Capital to invest in 'unicorn' private tech companies.  They're trying to create a new model for taking private companies public via this 'blank check' structure.

Prior to founding Darsana, Desai worked at Eton Park Capital.

Per Google Finance, Social Capital Hedosophia Holdings is "a blank check company. The Company is formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The Company seeks to focus on search for a target business operating in the technology industries. The Company had not identified any business combination target."

Eminence Capital Increases Arris Group Stake

Ricky Sandler's hedge fund firm Eminence Capital has filed a 13G with the SEC regarding its stake in Arris Group (ARRS).  Per the filing, Eminence now owns 5.3% of the company with just over 10 million shares.

This is an increase of 858,147 shares as they previously owned 9.15 million shares at the end of the second quarter.  This most recent filing was made due to portfolio activity on September 12th.

For more on this hedge fund, you can view other portfolio activity from Eminence Capital here.

Per Google Finance, Arris Group is "a media entertainment and data communications solutions provider. The Company operates in two segments: Customer Premises Equipment (CPE), and Network & Cloud (N&C). The Company enables service providers, including cable, telephone, and digital broadcast satellite operators, and media programmers to deliver media, voice and Internet Protocol (IP) data services to their subscribers. It is engaged in offering set-tops, digital video and IP television (IPTV) distribution systems, broadband access infrastructure platforms, and associated data and voice CPE, which it also sells directly to consumers through retail channels. Its solutions are complemented by an array of services, including technical support, repair and refurbishment, and system design and integration. The CPE segment consists of CPE Products-Video and CPE Products-Broadband. The N&C segment consists of Infrastructure Products, Cloud Software and Global Services."

Fairholme Capital Adds To St. Joe Position

Bruce Berkowitz's investment firm Fairholme Capital has filed an amended 13D with the SEC regarding its stake in St. Joe (JOE).  Per the filing, Fairholme now owns 40.5% of the company with just over 27 million shares.

The filing notes that Berkowitz was out buying across August and into early September, at prices ranging from $18.3016 to $19.2174.  In total, he purchased just over 1.55 million shares.

For more on this manager, we've also highlighted other recent portfolio activity from Fairholme Capital here.

Per Google Finance, St. Joe is "a real estate development, asset management and operating company. The Company operates through five segments: residential real estate; commercial real estate; resorts and leisure; leasing operations, and forestry. Its residential real estate segment plans and develops primary residential and resort residential communities of various sizes on its existing land. Its commercial real estate segment plans, develops, manages and sells real estate. Resorts and leisure segment features a portfolio of vacation rentals and hotel operations, as well as golf courses, a beach club, marinas and other related resort amenities. Its leasing operations business includes its retail and commercial leasing. Its forestry segment focuses on the management of its timber holdings in Northwest Florida."

ValueAct Capital Trims Willis Towers Watson Stake Again

Jeff Ubben's activist investment firm ValueAct Capital has filed yet another Form 4 with the SEC regarding its stake in Willis Towers Watson (WLTW).

Per the filing, ValueAct now owns 3.28 million shares. They sold 41,348 shares on September 18th at $152.38 per share. As we've highlighted previously, they've been reducing their WLTW position size.

For more on this fund, we've also posted about another stock ValueAct has been selling as well as one stock ValueAct has been buying.

Per Google Finance, Willis Towers Watson "operates as a global advisory, broking and solutions company. It is engaged in offering risk management, insurance broking, consulting, technology and solutions, and private exchanges. The Company operates through eight segments: Willis International; Willis North America; Willis Capital, Wholesale & Reinsurance (CWR); Willis GB; Towers Watson Benefits; Towers Watson Exchange Solutions; Towers Watson Risk and Financial Services; and Towers Watson Talent and Rewards. The Willis GB segment comprises four business units: Property and Casualty, Transport, Financial Lines and Retail Networks. The Willis Capital Wholesale and Reinsurance segment includes Willis Re; Willis Capital Markets & Advisory; Willis' wholesale business, and Willis Portfolio Underwriting Services. The Willis North America segment provides risk management, insurance brokerage and related risk services."