Nexen Inc. (USA) (NYSE:NXY) , an energy company with a focus on producing oil from Canada’s tar sands but with other operations around the world, was another of Pine River’s top picks. Nexen is in the process of being acquired by Chinese oil company CNOOC, with both U.S. and Canadian regulators approving of the deal. The takeover price is set for $27.50, with the stock currently trading at prices of just above $27.40. As such the opportunities for merger arbitrage are limited.
The fund reported a position of 8.2 million shares in CYS Investments Inc (NYSE:CYS), another REIT. As is common with these stocks, CYS makes substantial dividend payments (though it appears to have made a special payment in December) and we would estimate the yield based on historical distributions to be at least 13%. However, a number of market players have been bearish on CYS. The stock has fallen 9% in the last year against a rising market, and the most recent data has 14% of the outstanding shares held short. As a result income investors should be cautious rather than buying for the yield alone.
The article $4 Billion Hedge Fund Pine River Capital’s Top Stock Picks originally appeared on Fool.com and is written by Jake Mann.
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