A Reuters report said hedge funds in the US purchased and divested shares of controversial firms like JC Penney Co, Herbalife Ltd and Sotheby's. Michael Vranos' Ellington Management Group bought new stake in Sotheby's, putting its shares to 71,500 at the end of the third quarter. Eton Park Capital Management found by Eric Mindich also invested a 1.94 million stake in the auction house. Meanwhile, Daniel Loeb of Third Point has been calling for a reorganization of Sotheby's management. Third Point is the biggest shareholder in the New York-based auction house.
Retailer JC Penney found new investors in Farallon Capital Management, which bought 500,000 shares, while activist investor Jana Partners also purchased 489,600 shares in the struggling retailer. On the other hand, Tiger Consumer Management founded by Patrick McCormack eliminated its JC Penney exposure and divested 5.4 million of its shares in the retailer.
From 2.1 million shares it has in Herbalife Ltd in the previous quarter, Tiger Consumer Management reduced its holdings to 768,252 shares.
According to the report, the disclosures of the hedge fund managers gleaned from their 13F filings with the US Securities and Exchange Commission are used by investors who want to get a pattern of the stocks sold and bought by experienced and savvy traders. Reuters cautioned, however, that forming an investment strategy based on the filings alone can be dangerous as the disclosures are made 45 days after each quarter ends.
Despite the warning, the report said the filings still gave investors a chance to look at the money-making opportunities of hedge fund managers. The information gleaned, however, is limited as the disclosures do not include short positions. It is also provides only little disclosure on the securities held by the hedge funds that are not traded on the stock exchanges. The US regulator also allows fund managers to not list their sensitive stock positions from the 13F upon request.
Join the Conversation