Analysis Of Monday And Tuesday's Noteworthy Institutional 5% Ownership Filings

by: GuruFundPicks

Many leading funds filed forms 13-D and 13-G (and form 4) with the SEC this week, on Monday and Tuesday, indicating that they had amended their ownership in U.S. traded public companies. The following are the most notable filings from that analysis (for more info on Forms 13-D and 13-G, and how to interpret that, please refer to the end of this article):

Alexza Pharmaceuticals (NASDAQ: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 Monday, Bahamas-based biotech-focused privately held investment management company Boxer Capital filed SEC Form SC 13G indicating that it holds 7.8 million or 6.7% of outstanding shares, an increase of 4.4 million shares from the 3.4 million shares it reported holding in a prior 13G filing on January 4th. This is the third fund to indicate via a 13G filing that it increased its ownership of ALXA this year. Last Tuesday, San Diego-based biotech-focused fund Tang Capital Partners filed SC 13G indicating that it holds a new 11.0 million share position in the company, and prior to that, last month, London-based Occitan Capital Partners LLP filed SC 13G/A that we wrote about in an earlier insider ownership article.

ALXA shares currently trade near all-time lows, down more than 95% since peaking about five years ago. Its shares have been slammed repeatedly in the last few months, including most recently after the company announced another diluting event, selling 44 million shares in a public offering for 50c/share. The company indicated that the proceeds from the public offering would be used for general corporate purposes. Also, earlier, on December 16th, the company had issued 60-day layoff notices to all of its employees, indicating 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.

Alon USA Energy Inc. (NYSE:ALJ): ALJ is an independent refiner and marketer of petroleum products in south central, southwestern, and western regions of the U.S. It makes gasoline and diesel products under the FINA brand name, is a leading producer of asphalt in TX, and it operates convenience stores in TX and NM under the 7-Eleven and FINA brand names.

On Tuesday, Yehud, Israel-based Africa Israel Investments, an international holding and investment company formed in the 1930s by Jewish investors from South Africa to support the budding Israeli economy, filed SEC Form SC 13D indicating that it holds 2.2 million or 3.9% of outstanding shares, a decrease of 1.5 million shares from the 3.7 million shares it held at the time of its prior SC 13D filing in July of last year. ALJ trades at a current 10 P/E and 1.4 P/B compared to averages of 12.1 and 1.6 for its peers in the oil refining & marketing group.

Yahoo! Inc. (NASDAQ:YHOO): YHOO is a leading global internet search engine, eCommerce and media company. On Monday, Guru Daniel Loeb's event-driven hedge fund Third Point LLC, with $2.5 billion in 13-F assets per its latest Q4 filing, filed SEC Form SC 13D/A revealing that it had holds 70.3 million or 5.7% of outstanding shares, an increase of 14.3 million shares from the 56 million shares it held at the end of Q4. Third Point initiated its YHOO position with a 48 million share new buy in Q3 of 2011, and added another 8 million shares in Q4. With the latest buy, Third Point is now the second largest institutional holder of YHOO, almost at a tie with first place Capital Research Global Investors that holds 70.5 million shares.

YHOO shares have traded down to flat since peaking in early 2006, as earnings growth has been sluggish and the company has continued losing its search market share to Google Inc. (NASDAQ:GOOG), and the popularity of its content outside of the Finance and Sports portals has also continued to decline. In its latest quarter, released last month, it reporting in-line earnings and missed slightly on revenue ($1.17 billion v/s $1.19 billion); its shares currently trade at 16-17 forward P/E and 1.5 P/B compared to averages of 27.2 and 3.3 for its peers in the internet services group..

MGM Resorts International (NYSE:MGM): MGM owns and operates casino resorts in the U.S., and offers gaming, hotel, dining entertainment, retail and other resort amenities at its casinos. It has 20 casinos that have almost 35,000 slot machines, 2,000 table games in 2.1 million sq. feet of casino space, and a total of over 50,000 rooms. On Tuesday, famed billionaire Kirk Kerkorian's private holding company Tracinda Corp. filed SEC Form SC 13D indicating that it holds 91.2 million or 18.7% of outstanding shares, a decrease of 20 million shares from the 111.2 million shares it reported holding in a prior 13D filed in August of last year. In its filing, Tracinda states that the 20 million shares were sold at a price of $14.02 on February 27th. Furthermore, in connection with the sale, Tracinda entered into a lock-up agreement agreeing to not sell or transfer any shares, other than in private transactions with investors not effected on a national securities exchange for 60 days.

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 Tuesday, Liechtenstein-based Alpha Capital Anstalt filed SEC Form SC 13-G indicating that it now holds 2.35 million or 10.0% of outstanding shares of the company, an increase of 1.17 million shares from the 1.18 million shares it indicated holding in a prior SC 13G filing on February 15th. STEM shares, like those of many of its stem cell peers, have been weak recently, and currently trade at all-time lows, after plunging more than 90% in 2011.

General Discussion

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, Zacks Investment Research, Thomson Reuters and 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.

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