This content is from: Portfolio

The Morning Brief: Chanos Stands by HP Short

Jim Chanos, founder and president of Kynikos Associates, told CNBC Thursday morning he is still short Hewlett-Packard, asserting the company is “under assault.” He told viewers that CEO Meg Whitman “seems to be a lot more optimistic than we are.” Shares of HP surged nine percent on Wednesday when Whitman made positive comments about fiscal 2014 and 2015 at an analyst meeting. Meanwhile, on Thursday Deutsche Bank maintained its sell recommendation after expressing its initial reaction to the first day of the tech company’s analyst meeting. “Following last quarter, HPQ appeared to be positioning for conservative guidance prior to today’s event,” the report states. Instead, the investment bank says guidance “may now be viewed skeptically” since 2014 earnings gains look to be driven by what it calls the firm’s two most challenged businesses — personal computers and printing.

Herbalife is in a bit of a free-fall. Shares of the multi-level marketer of nutrition supplements dropped another 1.9 percent early in the day on Thursday before closing up by 0.33 percent on a day when the broad market indexes rose more than 2 percent. Still, the stock now stands at $63.50, down nearly 13 percent from October 2 to October 9. As most people are aware by now, William Ackman’s Pershing Square Capital Management has been heavily short the company until very recently, while a handful of high-profile investors have large long positions, including Carl Icahn and George Soros, and to a lesser extent hedge fund firms D.E. Shaw and Tiger Consumer Management.

J. Carlo Cannell disclosed that his hedge fund firm Cannell Capital owns 14.24 percent of Hooper Holmes, a $40 million market cap company that provides health risk assessment services to the life insurance and health industries. The stake is held in the firm’s Tristan Partners and Tristan Offshore funds and in separately managed accounts. In a letter sent to chairman Ronald Aprahamian, Cannell asserts the board of directors’ compensation is “galling” given that the stock has plunged from $17.43 in April 2000 to $0.36 in August 2013. He also calls for the removal of director Elaine Rigolosi, chair of the compensation committee. He also urges the company to do a reverse stock split.

Jana Partners’ Barry Rosenstein Thursday afternoon told CNBC he is planning to file a 13D on a new target soon. The New York–based activist hedge fund manager declined to disclose the target, of course. However, he stressed that he now has five of these filings currently active, including the two most recent ones, Safeway and Outerwall. He reminded viewers he has engaged in nearly 60 activist campaigns and has only launched one proxy fight. Jana also disclosed yesterday in a regulatory filing that it reduced its stake in  Agrium to 2.7 percent after losing its proxy battle with the fertilizer company earlier this year.

MKP Capital Management has launched a new fund, MKP Macro Partners, according to a regulatory filing. The New York–based hedge fund firm has raised $150 million for the fund, which is a slightly higher risk version of its existing macro fund, MKP Opportunity, according to a person with knowledge of the new fund.

Ricky Sandler’s Eminence Capital disclosed it owns 5.1 percent of car retailer Sonic Automotive. It was reported in a 13G filing, suggesting it is a passive investment.

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