10 Picks From Event-Driven Hedge Fund Amber Capital

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Includes: BSBR, CHTR, CIT, DCOM, GTE, PZE, SNI, SNV, TGS, TRH
by: Insider Monkey

Joseph Oughourlian and Michel Brogard are co-founders of Amber Capital Investment Management. Amber Capital is an event-driven hedge fund. Oughourlian headed the Equity Arbitrage Proprietary Trading Desk at Société Général between 1997 and 2001. Initially Amber Capital operated as the asset management arm of SG Corporate & Investment Banking. New York City-based Amber Capital was launched in 2005 as an independent entity. Amber mostly invests in value stocks, mergers, spin-offs, and takeovers. About one third of its investments are in the U.S. and the rest is in Europe. In 2007, Amber managed $7 billion at its peak. Oughourlian and Michel Brogard, Amber’s other co-founder, has averaged 12% annually between 2001 and early 2009.

Below we compiled and discussed Joseph Oughourlian’s top stock picks at the end of June. The data sources are Yahoo Finance and Zacks.

Gran Tierra Energy Inc. (NYSEMKT:GTE), an independent energy company, engages in the acquisition, exploration, development, and production of oil and gas properties in Colombia, Argentina, Peru, and Brazil. It lost 8.62% since the end of June this year. The company is expected to earn $0.4 in 2011 and $0.65 in 2012. The stock recently traded at $6.23. Its forward PE ratio is 15.13. The company has $180.1 million in net cash on its balance sheet. Oughourlian had a $103 million position in GTE at the end of June. Jim Simons had $7.6 million invested in GTE. This stock seems cheap for a fast growing energy company.

Charter Communications, Inc. (NASDAQ:CHTR), through its subsidiaries, provides cable services to residential and commercial customers in the United States. It lost 11.19% since the end of June this year. The third quarter revenues rose to $1.813 billion, up 3.0% compared to the year-ago quarter. The company is expected to earn -$1.75 in 2011 and $1.35 in 2012. The stock recently traded at $50.66. Its forward PE ratio is 34.94. Oughourlian had a $28 million position in CHTR at the end of June. George Soros had $46 million invested in CHTR.

Banco Santander (Brasil) S.A. (NYSE:BSBR) operates as a full-service bank in Brazil. It lost 25.28% since the end of June this year. In the third quarter, net income was Ch$75,153 million. Compared to second quarter, net income decreased 46.9%. Compared to third quarter last year, net income decreased 40.0%. Several non-recurring items and a cautious stance regarding risks affected these results. The company is expected to earn $0.91 in 2011 and $1.13 in 2012. The stock recently traded at $8.88. Its forward PE ratio is 9.59. Oughourlian largely increased his holding of BSBR by 12-fold during the second quarter and had a $13 million position in BSBR at the end of June.

Scripps Networks Interactive, Inc. (NYSE:SNI) operates as a lifestyle content and Internet search company in the United States and internationally. It lost 14.4% since the end of June this year. Revenue rose 7.9 percent to $504 million as advertising revenue increased 8.6 percent and affiliate fee revenue climbed 6.1 percent. The company is expected to earn $2.8 in 2011 and $3.25 in 2012. The stock recently traded at $41.66. Its forward PE ratio is 14.93. Oughourlian had an $11 million position in SNI at the end of June. John Paulson had $147 million invested in SNI.

CIT Group Inc. (NYSE:CIT) operates as the holding company for CIT bank that provides commercial financing, leasing products, and other services to small and middle market businesses. It lost 22.32% since the end of June this year. The company reported a third-quarter loss of $16 million, which is down from a profit of $116 million last year. The company's loss is attributed to costs from prepayments made on first and second-lien debt and is lower than the average analyst estimate of a loss in the 12 cents-a-share range. The company is expected to earn $0.26 in 2011 and $1.19 in 2012. The stock recently traded at $35.53. Its forward PE ratio is 28.65. Oughourlian had a $9.7 million position in CIT at the end of June. Bruce Berkowitz had $859 million invested in CIT.

Transatlantic Holdings, Inc. (NYSE:TRH), through its subsidiaries, offers reinsurance capacity for a range of property and casualty products directly and through brokers to insurance and reinsurance companies in the domestic and international markets on a treaty and facultative basis. It returned 7.03% since the end of June this year. The company reported third-quarter net income of $68 million, down significantly from $134 million one year ago. It reported third-quarter net profit of $77 million, down 18 percent from $94 million reported one year ago. The decline was largely caused by catastrophe losses. The company is expected to earn $0.5 in 2011 and $6.15 in 2012. The stock recently traded at $53.03. Its forward PE ratio is 8.65. Oughourlian initiated a brand new $7 million position in TRH at the end of June. Ken Griffin had $24 million invested in TRH.

Dime Community Bancshares, Inc. (NASDAQ:DCOM) operates as the holding company for The Dime Savings Bank of Williamsburgh that provides financial services and loans primarily for multifamily housing. It lost 20.29% since the end of June this year. The third quarter net income was $11.2 million, compared to $12.3 million for the second quarter in 2011, and $11.4 million for the quarter ended September 30, 2010. The company is expected to earn $1.36 in 2011 and $1.33 in 2012. The stock recently traded at $11.7. Its forward PE ratio is 8.43. Oughourlian initiated a $3.7 million position in DCOM at the end of June.

Synovus Financial Corp. (NYSE:SNV), a diversified financial services and bank holding company, provides commercial and retail banking, financial management, insurance, and mortgage services in Georgia, Alabama, South Carolina, Florida, and Tennessee. It lost 29.61% since the end of June this year. The company reported a third-quarter net income of $30.2 million, the company’s first move back into the black after three years of losses. The company made 2 cents per share for the third quarter, while its total deposits came to $23.1 billion. The company is expected to earn -$0.17 in 2011 and $0.12 in 2012. The stock recently traded at $1.49. Its forward PE ratio is 11.46. The company has $1.07 billion in net cash on its balance sheet. Oughourlian had a $2 million position in SNV at the end of June. Bill Miller had $20 million invested in SNV.

Transportadora de Gas Del Sur S.A. (NYSE:TGS) engages in the transportation of natural gas, as well as production and commercialization of natural gas liquids primarily in Argentina. It lost 15.79% since the end of June this year. The company is expected to earn $0.25 in 2011 and $0.34 in 2012. The stock recently traded at $3.2. Its forward PE ratio is 2.74. Oughourlian had a $1.2 million position in TGS at the end of June. Jim Simons had $2 million invested in TGS.

Petrobras Argentina S.A. (NYSE:PZE) operates as an integrated energy company. It lost 30.3% since the end of June this year. The company is expected to earn $2 in 2011 and $2.6 in 2012. The stock recently traded at $13.99. Its forward PE ratio is 6.74. Oughourlian initiated a $1 million position in PZE at the end of June. Jim Simons had $2 million invested in PZE.

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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