David Einhorn’s large-cap stock picks in his 13F filings have not generated any alpha since 2008, according to Insider Monkey. The Greenlight Capital founder’s stock picks have a monthly alpha of -6 basis points after making certain adjustments for risk. “Our research in general has shown that hedge funds or any other investor group can’t generate enough outperformance to justify their high fees when it comes to large-cap stocks,” the finance blog states. “There are a few exceptions but David Einhorn isn’t one of them.” Alpha reported earlier in the week that Greenlight Capital was essentially flat last month, and is down 0.7 percent for the first quarter. We had also earlier reported that Greenlight Capital posted a 19.6 percent gain in 2013, its best performance since 2009, when it surged 32.1 percent coming out of the prior year’s global market meltdown. However, its 2013 performance came up way short of most of the major stock indices. The S&P 500 jumped nearly 30 percent, the Dow Jones industrial average rose 26.5 percent while the Nasdaq Composite surged 38.3 percent.
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Steven Cohen has aggressively pared the holdings in entities that he controls, reducing stakes in at least 10 different stocks in which his portfolios had previously held big positions to below 5 percent of the total shares outstanding. In separate 13G filings over the past two days, Cohen reported reducing his stake in Retrophin, Movado Group, PDC Energy, Vitamin Shoppe, Sunedison, Lumber Liquidators Holdings, Time Shop Holdings, Stemline Therapeutics, E-House (China) Holdings and Intercept Pharmaceuticals. SAC Capital’s conversion to a family office Point72 Asset Management is scheduled to become official on Monday, April 7.
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UBS raised its price target on Dow Chemical — an activist target of Dan Loeb’s Third Point — to $57 from $52. “Earnings have significant upside potential and/or lower risk,” the bank’s analysts state in a note sent to clients Thursday. Their analysis contends that oil-based chemicals are close to their trough and typically Dow trades at a high price-to-earnings ratio at the bottom of the cycle, and that the chemical maker can do a stock buyback mostly funded from divestments, a move that activist investors favor.
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Leon Cooperman — filing with the SEC on behalf of his hedge fund Omega Advisors — boosted his stake in PennyMac Financial Services, a mortgage-oriented REIT, by about 630,000 shares, to nearly 3.4 million shares, or 16.25 percent of the total outstanding. Cooper filed the disclosure via Form 13G, which suggests this is a passive investment.
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Ken Griffin’s Citadel disclosed it owns 5.2 percent of Rex Energy Corporation, an independent energy company, in what is also a passive position.
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Investcorp’s U.S.-based hedge fund business announced a joint venture with London-based Eyck Capital Management. Under the deal, Investcorp will offer its investors a European-focused event-driven and distressed credit strategy. Investcorp, which has more than $11 billion in client and proprietary assets under management, will provide initial seed and acceleration capital ranging from $50 to $100 million. Eyck will invest in highly levered companies in European special situations, distressed debt and stressed debt. The firm’s focus is on fundamental research-driven investments, long or short, in liquid instruments, including bonds, credit default swaps, loans and equities. Eyck was founded in 2013 by Khing Oei and has eight employees.
