Leading funds such as Bill Ackman’s Pershing Square Capital Management filed forms 13-G with the SEC last week, indicating that they had amended their ownership in 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 forms 13-D and 13-G 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 be 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 21st that can aid in identifying trading opportunities:
Clearwire Corp. (CLWR): CLWR provides wireless broadband networks for delivery of residential and mobile internet access and voice services. CLWR customers connect to the Internet using licensed spectrum, thus eliminating the confines of traditional cable or phone lines. The company offers its service in fifty U.S. markets, as well as in Europe.
Dallas, TX-based Highside Capital Management LP, founded by Lee Hobson and with $2 billion in equity assets under management, filed Form SC-13G with the SEC on Monday, October 17th, indicating that it now holds 16.2 million shares or 6.5% of CLWR, an increase from the 7.1 million or 2.8% of CLWR shares that it held at the end of the June quarter. As of the June quarter SEC filings, Fidelity Investment with 40.7 million or 16.4% of outstanding shares was the only other 5% plus institutional holder of CLWR stock. We covered CLWR earlier on October 10th, indicating that Sprint (S) could emerge as the winner in its publicized family spat with CLWR by pushing it into bankruptcy where its assets could be purchase at fire-sale prices.
Dryships Inc. (DRYS): DRYS is a Greek provider of carrier transportation services with a fleet of 38 dry-bulk carriers and 12 tankers. On Wednesday, October 19th, Chairman and CEO George Economou filed Form SC-13D/A with the SEC, indicating that he now holds 60.1 million shares, or 15.0% of the outstanding shares of DRYS via various investment vehicles controlled by Mr. Economou and members of his family.
This is an increase from the 59.0 million shares of DRYS that Mr. Economou declared holding in his prior filing of SEC Form 13D/A filing on September 7th, indicating that he is accumulating the stock. Besides Mr. Economou, Deutsche Bank AG is the only other major holder, with 2.2 million or 5.1% of outstanding shares.
Anadys Pharmaceuticals (ANDS): ANDS is a biopharmaceutical company, engaged in developing novel medicines for the treatment of hepatitis C in the U.S. On Thursday, October 20th, ex-Deutsche Bank proprietary trader Daniel Gold’s hedge fund QVT Financial filed SEC Form SC 13D/A indicating that it now holds 10.8 million shares or 18.8% of the outstanding shares of ANDS. This is a decrease from the 11.4 million shares or 20.0% of outstanding shares that it held at the end of the June quarter. Other major 5% institutional holders of ANDS include Orbimed Advisors with 5.3 million or 9.3% of outstanding shares, Wellington Management with 5.0 million or 8.8% of outstanding shares, and Federated Investors Inc. with 3.6 million or 6.2% of outstanding shares. Just last Monday, ANDS announced that it would be acquired at a 250% premium by Roche Holding Ltd. (OTCQX:RHHBY) at $3.70 per share.
Amarin Corp. (AMRN): AMRN is a clinical stage Ireland-based global pharmaceutical group, which develops novel drugs for the treatment of cardiovascular diseases using its proprietary advanced oral and trans-dermal drug delivery technologies. On Thursday, October 20th, London-based healthcare focused international investment group Abingworth LLP filed SEC Form SC 13D/A indicating that it now holds 16.45 million or 11.6% of the outstanding shares of AMRN.
This is a slight increase from the 16.42 million shares that it held at the end of the June quarter. Other major 5% institutional holders of AMRN include Fidelity Investments with 16.3 million or 13.0% of outstanding shares. We recently covered AMRN at the end of last month, suggesting that current prices are attractive for a speculative buy for those with a longer-term horizon. The company may either get bought out by big pharmaceutical company at a premium, or if it decides to go it alone, then it may trend higher towards a valuation of at least three times estimated peak sales of AMR101 in the $1.25 billion range.
Sealed Air Corp. (SEE): SEE manufactures packaging and related materials and systems for food, industrial, medical and consumer applications. On Thursday, October 20th, Tuscon, AZ-based mutual fund company Davis Selected Advisers filed SEC Form SC 13D/A, indicating that it now holds 23.3 million or 12.2% of the outstanding shares of SEE. This is a decrease from the 25.4 million shares that it indicated in its prior filing on Monday, and a huge decrease from the 41.9 million shares it indicated that it held at the end of the June quarter in its latest SEC 13-F filing. There are no other major 5% institutional holders of SEE; Vanguard Group is the second-largest institutional holder of SEE, with 8.4 million or 4.4% of outstanding shares.
Fortune Brands Home & Security ("FBHS"): FBHS engages in the manufacture and sale of home and security products for use in residential home repair, remodeling, new construction, security, and storage applications in the U.S. On Tuesday, October 18th, Pershing Squarer Capital Management, managed by Bill Ackman and with $5.8 billion in assets under management, filed SEC Form SC 13G, indicating that it now holds 20.8 million or 13.4% of the outstanding shares of FBHS. This is an increase from the 17.2 million shares that it indicated in its June quarter filing to the SEC. T Rowe Price with 10.2 million or 6.6% of the outstanding shares is the only other large institutional holder of FBHS stock.
Genco Shipping & Trading (GNK): GNK is a provider of international tanker transportation services for iron ore, coal, grain and steel with a fleet of 49 vessels. On Wednesday, October 19th, Nevada Capital Corp. Ltd. filed SEC Form SC 13G, indicating that it now holds 6.0 million or 16.7% of the outstanding shares of GNK. This is an increase from the 5.0 million shares that it indicated it held at the end of last month, and the 4.0 million shares it held at the beginning of last month. Opus Capital Group and Dimensional Fund Advisors are the largest institutional holders of GNK stock with 5.5% and 5.2% of the outstanding shares.
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