Leading funds such as The Carlyle Group and Blackrock, sovereign wealth funds such as Singapore’s Temasek Holdings, and insiders such as Russian mega-billionaire Igor Zyuzin, filed forms 13-D and 13-G with the SEC last week, all indicating that they had increased their ownership in leading U.S. traded public companies. Form 13-D is commonly referred to as “beneficial ownership report,” and is required when a person or a group of persons acquires beneficial ownership of more than 5% of the voting class of a company’s equity securities; form 13-G is the abbreviated version of the form that is allowed under certain circumstances.
The information in form 13-D is extremely timely as it is required to be filed within ten days after the purchase, in contrast to 13-F quarterly filings by Institutions that are filed every three months. The information contained in 13-F filings, thereby, can as much as eighteen weeks old by the time it is disseminated to the public. Furthermore, by virtue of their 5% ownership in public companies, the information contained in the 13-D and 13-G filings indicates only high confidence or high conviction moves by institutions and insiders, and hence can be interpreted to be of greater relevance to the investment community than the 13-F quarterly filings. Furthermore, 13-D and 13-G filings often are a precursor to hostile takeover, company breakups and other “change of control” events, and often they will include a letter to management explaining the reason for their taking a large stake in the company. The following are some of the major 13-D and 13-G filings by leading institutions and insiders during the week ending October 7th that can aid in identifying trading opportunities:
- YRC Worldwide Inc. (YRCW) is an international provider of asset and non-asset based transportation services across the U.S., Puerto Rico, Canada, Guam and Mexico. DC-based The Carlyle Group, with over $150 billion in assets under management diversified over 84 distinct funds, filed Form SC 13G with the SEC on Thursday, indicating that one of their funds, DBD Cayman Holdings, holds 292.8 million shares or 14.1% of YRCW stock, a new position since the company last filed their quarter 13F with the SEC for the period ending June 2011. We recently recommended YRCW, positing that its shares could triple from current prices.
- Mechel Oao Ads (MTL) is a Russian manufacturer of mining and steel products for construction, engineering, defense and other industries. Russian mega-billionaire Igor Zyuzin, managing director and a major shareholder of the company, filed Form SC 13D with the SEC on Thursday, indicating that his Cyprus-based holding company, Calridge Ltd, now holds 280.5 million shares or 67.4% of the outstanding shares of MTL. This is an increase from the 277.9 million shares owned by Mr. Zyuzin in his filing on May 12th.
- Level 3 Communications (LVLT) is an operator of one of the largest Internet backbones in the world. It is one of the largest providers of wholesale dial-up service to ISPs in North America, and it is the primary provider of Internet connectivity for millions of broadband subscribers, through its DSL and cable partners. Furthermore, it provides a wide range of communications services over its mile broadband fiber optic network including IP services, broadband transport and infrastructure services, and patented soft-switch managed modem and voice services. Temasek Holdings, the government of Singapore’s $157 billion investment company, one of the many sovereign wealth funds, filed Form SC 13D/A with the SEC on Wednesday, indicating that it holds 757.5 million shares or 24.8% of the outstanding shares. We recently wrote about our bullish opinion on LVLT after the company indicated that they would transfer their listing to the NYSE in conjunction with a 1-for-15 reverse split.
- Illumina Inc. (ILMN) is a developer of integrated systems for the large-scale analysis of genetic variation and biological function. Its tools are designed to be used to provide information that could be used to improve drugs and therapies, customize diagnoses and treatment, and cure diseases. It derives product revenues from the sale of Microarrays and DNA Sequencing products, and it derives service and other revenues from genotyping and sequencing services as well as instrument maintenance contracts. Edinburgh-based Baillie Gifford, with $110 billion in assets under management, filed Form SC 13G with the SEC on Thursday, indicating that it holds 12.5 million shares or 10.1% of the outstanding shares. This is an increase from the 6.3 million owned by Baillie Gifford as indicated in their last 13-F filing for the period ending June 2011. We recently wrote about bearish view on Illumina after it guided down for the upcoming September quarter.
- Chesapeake Energy (CHK) is an independent oil and gas company, with its primary operating assets in the mid-continent region of OK, western AR, southwestern KS and the TX Panhandle. Blackrock, the world’s largest and most prominent asset manager, with $3.7 trillion in assets under management, filed Form SC 13G/A with the SEC on Friday, indicating that its Blackrock Inc. fund holds 31.7 million shares or 4.8% of the outstanding shares. This is an increase from the 7.4 million shares owned by Blackrock, Inc., as indicated in their last 13-F filing for the period ending June 2011.
- Texas Instruments (TXN) is a global manufacturer of ICs and digital signal processors used in cell phones, navigation systems and PCs. Other semiconductor products include standard logic, application- specific integrated circuits, reduced instruction-set computing microprocessors, microcontrollers and digital imaging devices. Pasadena, CA-based PRIMECAP Management, with $58 billion in assets under management, filed Form SC 13G with the SEC on Tuesday, indicating that it holds 57.9 million shares or 5.0% of the outstanding shares. This is an increase from the 55.8 million shares owned by PRIMECAP, as indicated in their last 13-F filing for the period ending June 2011.
- Molycorp Inc. (MCP) is engaged in the mining and processing of rare earth ores at the mountain pass facility near the CA/NV border. The rare earths are critical inputs in existing and emerging applications, including: clean energy technologies, such as hybrid and electric vehicles and wind power turbines; multiple high-tech uses, including fiber optics, lasers and hard disk drives; numerous defense applications, such as guidance and control systems and global positioning systems; and advanced water treatment technology for use in industrial, military and outdoor recreation applications. New-York based hedge fund JAT Capital Management LP, with $1.7 billion in assets under management, filed Form SC 13G with the SEC last Monday, indicating that it holds 5.1 million shares or 6.0% of the outstanding shares. This is an increase from the 1.6 million shares owned by JAT, as indicated in their last 13-F filing for the period ending June 2011. We recently indicated our bullish view on MCP, and continue to believe that it is a steal at current prices.
- Golden Star Resources (GSS) is a Canadian International gold mining and exploration company producing gold in Ghana, West Africa. Van Eck Global, a New York-based investment management firm with $35 billion in assets under management, filed Form SC 13G with the SEC on Tuesday, indicating that it holds 25.9 million shares or 10.0% of the outstanding shares. This is an increase from the 24.3 million shares owned by Van Eck, as indicated in their last 13-F filing for the period ending June 2011.
- Century Aluminum Co. (CENX) is a producer of value-added and standard grade primary aluminum products used in the aluminum, wire and cable markets. Baar, Switzerland-based Glencore International Plc, a multinational mining and commodities company with revenues of $145 billion and a constituent of the FTSE 100 Index, filed Form SC 13D/A with the SEC on Tuesday, indicating that it holds 36.9 million shares or 41.2% of the outstanding shares. This is an increase from the 36.4 million shares owned by Glencore, as indicated in their last filing on June 2nd, 2011.
- Manitowoc Co. (MTW) is a manufacturer of cranes and related lifting equipment for the energy, petrochemical, construction and mining markets. Blackrock, the world’s largest and most prominent asset manager, with $3.7 trillion in assets under management, filed Form SC 13G/A with the SEC on Friday, indicating that its Blackrock Inc. fund holds 4.5 million shares or 3.4% of the outstanding shares. This is an increase from the 70,173 shares owned by Blackrock, Inc., as indicated in their last 13-F filing for the period ending June 2011.
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