Many leading funds, including SAC Capital and Southeastern Asset Management, filed forms 13-D and 13-G (and form 4) with the SEC on in the past week and a half (April 25th to May 4th, 2012), indicating that they had amended their ownership in U.S. traded public companies. The following are the most notable institutional trades based on our analysis of those filings (ex-healthcare sector filings, which were summarized in a prior article.
Walter Energy Inc. (WLT): WLT is a producer of hard coking coal from underground mines for by the steel industry. On Friday, billionaire star fund manager Stephen Cohen's hedge fund SAC Capital Advisors, with over $15.7 billion in 13-F assets, filed SEC Form SC 13G indicating that it holds 3.1 million or 5.0% of outstanding shares, an increase from the 0.7 million shares it reported holding at the end of Q4 2011. This makes SAC the third largest institutional holder of WLT, behind TIAA-CREF Investment Management (4.9 million shares) and Chicago-based Harris Associates LP, manager of the Oakmark Funds, with $55 billion in 13-F assets (4.3 million shares).
WLT reported its Q1 (March) quarter after the market close on Wednesday of last week, missing on both analyst revenue and earnings estimates, but maintained its FY 2012 full-year coal production target at 11.5-13.0 MMTs. Its shares currently trade near 52-week lows, and are up about 5% YTD, trading at a discount 9-10 forward P/E and 1.9 P/B compared to averages of 12.3 and 1.6 for its peers in the coal mining group. Analysts generally are bullish on the company, with a mean target of $79, well above current prices in the $64 range, and of the 22 analysts that cover the company, thirteen rate it at buy/strong buy, eight at neutral, and only one at underperform. Also, just last Friday, Brean Murray raising the stock to Buy from Hold, with an $81 price target.
Besides WLT, SAC also filed SC 13D/G's in the following companies:
- Select Comfort Corp. (SCSS), a manufacturer and retail store operator of adjustable-firmness mattresses and other sleep-related products, in which it filed SEC Form SC 13G indicating that it held 2.8 million or 5.0% of outstanding shares, an increase from the 0.2 million shares it reported holding at the end of Q4; and
- Santarus Inc. (SNTS), a development-stage biotech company focused on acquiring, developing and commercializing proprietary products addressing diabetes, high cholesterol, ulcerative colitis, travelers diarrhea and other diseases, in which it filed SEC Form SC 13G indicating that it held 3.2 million or 5.2% of outstanding shares, a new position for it since the end of Q4 2011.
Francesca's Holdings Corp. (FRAN): FRAN operates a specialty retail chain of women's apparel boutique stores in 38 States targeting fashion-conscious 18 to 35 year olds. On Thursday, leading New York-based private equity firm CCMP Capital, that focuses on leveraged buyout and growth capital transactions, filed SEC Form 13G/A indicating that it holds 7.25 million or 16.6% of outstanding shares, a decrease from the 26.7 million shares it held at the end of Q4, and also a decrease from the 15.7 million shares it reported in a prior SC 13G filing in the middle of March.
FRAN shares are up strong this year, up over 60% YTD, and are currently forming a tight consolidation base at the highs. Earlier, the company reported a strong Q4 (ending January) in mid-March, beating analyst earnings (19c v/s 16c) and revenue estimates ($62 million v/s $57 million), and it also guided Q1 and FY 2012 revenues and earnings higher. Revenues for the current quarter were 55% above the year-ago quarter, with earnings growth at 90% year-over-year, aided by improving gross margins and lower operating expenses as a percentage of sales. Its shares currently trade at 27-28 forward P/E compared to the average of 12.6 for its peers in the shoes and related apparel group.
Other major institutional filings in the past week-and-a-half (ex-healthcare sector) included:
- Chesapeake Energy (CHK), an independent oil and gas company, with its primary operating assets in mid-continent region of Oklahoma, western Arkansas, southwestern Kansas and the Texas panhandle. On Wednesday, value guru Mason Hawkins' Southeastern Asset Management, that manages the Longleaf Partners Funds, filed SEC Form SC 13D indicating that he holds 89.9 million or 13.6% of outstanding shares, an increase from the 87.4 million shares that it reported holding at the end of Q4 2011.
- Vringo Inc. (VRNG), best known for its Facetones app, and a provider of range of software products for mobile video entertainment, personalization, and mobile social applications. On Monday, 18 Partners, LLC filed SEC Form SC 13G indicating that it holds 0.7 million or 5.1% of outstanding shares, a new position for it since the end of Q4 2011.
- Netsol Technologies Inc. (NTWK), a provider of enterprise software and IT services for the automobile finance and leasing, banking, healthcare, and financial services industries worldwide. The week before last, on Wednesday, New York-based small and midcap-focused hedge fund Newland Capital Management, with $854 million in 13-F assets, filed SEC Form SC 13G/A indicating that it holds 3.8 million or 5.1% of outstanding shares, an increase from the 3.7 million shares it indicated it held in an earlier SC 13D/G filing last month, and an increase from the 2.4 million shares it held at the end of Q4.
Credit: Fundamental data in this article and company descriptions are based on SEC filings, Zacks Investment Research, Yahoo, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
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