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The Morning Brief: Icahn Scores Navistar Win; Citadel Goes Back to School

Navistar zoomed up nearly 8 percent to close at $22.81 on the announcement that it named two new board members — with plans to add a third later on — that are close to Carl Icahn in order to avoid a proxy fight with the activist investor. Nice quick return for Carl, huh? Not so fast. Icahn disclosed last October that he owned 9.8 percent of Navistar’s stock and said in a regulatory filing at the time that the stock was undervalued, that he’d had conversations with management and that he would seek additional conversations to discuss Navistar’s business and strategies. At the time the stock was trading around $40.

Hedge funds took on more risk in August. Leverage climbed 3.2 percent from July and 5.4 percent on a year-over-year basis, according to data from the New York Stock Exchange. Is this a sign of optimism or a Hail Mary to make up for huge underperformance so far this year just a couple of months before investors usual submit redemption notices for the year-end? Probably a bit of both. To put this in perspective, leverage is still below 2012, 2011 and pre-crisis peaks.

Ken Griffin’s Citadel is in the throes of its on-campus recruiting. And a look at the schedule underscores that he only seeks the best and brightest—or at least people from the top-ranked schools. The schools on Citadel’s list include five of the eight Ivy League schools, Stanford University, and MIT, plus a few state universities— Georgia Tech, the University of California-Berkeley, the University of Michigan and the University of Illinois-Urbana Champaign’s college of engineering. The recruiting began September 6 and ends October 29.

Hedge fund favorite Apple lost another 2.21 percent Monday, its second straight day to close below its 50-day moving average. Are hedge fund managers starting to bail on the stock? Possibly, but we may not know until at least the middle of February. That’s when the fourth-quarter 13f filings are due. We won’t know in mid-November because the third quarter 13f spans the end of September, a few days before Apple’s stock started to slip. Perhaps the third quarter investor letters will provide some insight.

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