Many leading funds filed forms 13-D and 13-G with the SEC on Friday, December 23rd, including Invesco Private Capital and Wasatch Advisors, indicating that they had amended their ownership in U.S. traded public companies. The forms are required to be filed within ten days, so the institutions traded these shares sometime after the first week of December. Also, we have included here SEC Form 4 filings by Institutions that are considered corporate insiders by virtue of their holding more than 10% ownership, and in many cases, having representation on the Board of Directors. The following are the most notable filings last Friday (for more info on Forms 13-D and 13-G, and how to interpret that, please refer to the end of this article):
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. On Friday, Hong Kong-based $6 billion multi-strategy investment firm Mount Kellett Capital Management filed SEC Form SC 13G indicating that it holds 23.3 million shares, a new position for Mount Kellett since its 13-F Q3 filing. Mount Kellett focuses on opportunistic and special situation investments globally across asset classes, industries and geographic, and per its latest 13-F filing it invested $880 million of its $6 billion in assets under management in U.S. exchange traded securities, concentrated in 10 positions. Mount Kellett is the third fund that we have reported recently increasing its position in CLWR, the other two being Baltimore, MD-based Chesapeake Partner Management Co. that we reported on earlier this month and Dallas, TX-based Highside Capital Management that we reported on earlier at the end of October. CLWR is currently bouncing off the lows after a recent agreement with majority owner Sprint (S) boosted the outlook for the company.
EXCO Resources Inc. (XCO): XCO is an independent oil and natural gas company, engaged in the exploration, exploitation, development and production of onshore North American oil and natural gas properties with a focus on shale resource plays. On Friday, Atlanta-based hedge fund Invesco Private Capital, with over $1 billion in assets under management and headed by Wilbur Ross, filed SEC Form 4 indicating that they purchased 363,063 shares for $3.5 million. Invesco held 27.6 million or 25.1% of the outstanding shares of XCO at the time of their 13-F Q3 filing, and they have been accumulating XCO recently, adding 6.6 million shares in Q3. Invesco Private Capital is a subsidiary of investment management company Invesco (IVZ), with over $650 billion in assets under management. XCO trades at the lows of the year, down about 50% YTD, and it trades at a discount 12 forward P/E and 1.2 P/B compared to the averages of 20.6 and 5.2 for the U.S. oil & gas exploration & production group.
Stemcells Inc. (STEM): STEM engages in the research, development and commercialization of stem cell therapeutics, and related tools and technologies to treat, and possibly cure, human diseases and injuries such as Parkinson's disease, hepatitis, diabetes, and spinal cord injuries. On Friday, Liechtenstein-based Alpha Capital Anstalt filed SEC Form SC 13-G indicating that it now holds 1.7 million or 7.6% of outstanding shares of the company, and also Cayman-Islands based ICS Opportunities filed SEC Form SC 13G, indicating that it now holds 2.4 million or 10.0% of outstanding shares. STEM shares like many of its stem cell peers are among the biggest decliners in the biotech space this year, down over 93% YTD, and trading at the lows.
Alexza Pharmaceuticals (ALXA): ALXA is a development stage biotech company, focused on the research, development and commercialization of a novel proprietary drug delivery system for the acute treatment of central nervous system conditions. On Friday, London-based hedge fund Occitan Capital Partners filed SEC Form SC 13G indicated that they now hold 3.3 million or 6.0% of outstanding shares, making them a new 5% holder of ALXA, just behind first and second place Blackrock Advisors (4.0 million) and RA Capital Management (3.9 million shares). ALXA shares have been weak this year, currently trading within striking distance of its all-time lows. The company announced December 16th 60-day layoff notices to all of its employees and indicated that it was exploring strategic options, including a possible sale or disposition of one or more corporate assets, a strategic business combination, partnership or other transactions.
Nektar Therapeutics (NKTR): NKTR is a development stage biotech company, engaged in developing a pipeline of drug candidates that utilize its PEGylation and polymer conjugate technology platforms to target various therapeutics areas, including oncology and pain. On Friday, Biotechnology Value Fund filed SEC Form SC 13G indicating that it now holds 7.4 million or 6.5% of outstanding shares, an increase from the 0.8 million shares it held at the time of its 13-F Q3 filing. This makes them the fourth largest institutional holder of NKTR, behind Oppenheimer Funds (22.7 million shares), Healthcor Group (10.6 million shares) and PRIMECAP Management (8.1 million shares). NKTR shares have been weak all year, now off 58% YTD after falling almost 70% at its lows last month. The shares recently gained back some of its losses after its partner Affymax Inc. (AFFY) gained FDA approval earlier this month of its peginesatide treatment of anemia in dialysis patients. NKTR is expected to benefit from the FDA approval, as it has an exclusive agreement with AFFY by which it will provide the company with its proprietary technology for use in the drug's manufacturing in exchange for manufacturing revenue, milestone and other payments. Besides, NKTR is also entitled to receive royalties on the global sales of peginesatide for all indications.
Silicon Graphics Intl (SGI): SGI is a global leader in large-scale clustered computing, clustered storage, high-performance computing, and data center enablement and services. It is a provider of servers, storage and data center solutions targeting data center deployments. On Friday, Salt Lake City, UT-based mutual fund company Wasatch Advisors, with almost $10 billion in assets under management and a focus on small-cap growth companies, filed SEC Form 13D indicating that it now holds 2.1 million or 6.6% of outstanding shares, an increase from the 1.6 million shares that it held at the time of its 13-F Q3 filing last month. This makes Wasatch the third largest holder of SGI, behind first place Fidelity Investments (4.7 million shares) and second place Sun Life Financial (2.1 million shares). SGI shares are up slightly for the year, up 27% YTD, and it trades at 13-14 forward P/E and 2.9 P/B compared to averages of 28.0 and 2.4 for its peers in the computer storage devices group.
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 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.
Credit: Fundamental data in this article were based on SEC filings, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our 'opinions' and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.