This content is from: Portfolio
The Morning Brief: Did J.C. Penney’s Plunge Hurt Hedge Funds?
Shares of J.C. Penney plunged about 14 percent, to $8.97, after the retailer announced after Thursday’s market close that it is offering 84 million shares for $9.65 apiece to raise cash for general corporate purposes. It is not clear whether several of the high profile hedge funds that had plowed into the stock have been among the sellers in recent days as the stock plummeted. The stock’s hedge fund holders include George Soros’ Soros Fund Management, Richard Perry’s Perry Capital, Larry Robbins’s Glenview Capital Management and Kyle Bass’s Hayman Capital Management. William Ackman’s Pershing Square Capital Management, of course, is out of the stock altogether, with Acman having dumped his entire load at what now seems like the inflated price of $12.90. Wow, perceptions can change in a hurry.
Hertz rebounded sharply Friday, rising 3.19 percent to close at $22.32. That jump came after the stock closed at about 15 percent on Thursday, when the car rental giant cut its earnings and revenue forecast for the year, citing weaker than expected demand for U.S. airport car rentals. As we have previously reported, Hertz is among the top 10 stocks that appeared among the top-10 holdings of hedge funds at the end of the second quarter.
The West Virginia Investment Management Board, Charleston added a total of $30 million with four hedge fund managers with which it already has money invested. The $13.2 billion board added $10 million each to Double Black Diamond, a multistrategy fund managed by Carlson Capital Management, and Pine River Fund, a global multistrategy relative value portfolio, according to Pensions & Investments. It also added $5 million each to Graham Global Investment Fund II, a global macro fund, and Winton Futures Fund, a managed futures fund.
Another hedge fund has taken a sizable stake in teen retailer Aéropostale. Ricky Sandler’s Eminence Capital Friday said it increased its stake by more than one million shares since the end of the second quarter, to more than 4.2 million shares, or 5.4 percent of the total shares outstanding. Earlier this month, we reported that activist investor Hummingbird disclosed an 8 percent stake, while a few days earlier Tiger Cub Tiger Consumer Management raised its position in Aéropostale by more than 80 percent since the end of the second quarter, to more than 6.4 million shares, or 8.21 percent of the total shares. After bottoming at $7.86 at the beginning of September, the stock zoomed to $10.17 before falling back and closing Friday at $9.51. Hummingbird made its filing using form 13D, meaning it could be a hostile position, while Tiger Consumer and Eminence used 13G filings to communicate a passive position.
Kyle Bass’ Hayman Capital Management disclosed a 5.1 percent passive stake in PennyMac Mortgage Investment Trust, one among a number of real estate investment trusts (REITs) that invests primarily in residential mortgage loans and mortgage-related assets and whose stock has suffered this year amid fears of rising interest rates.