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Billionaire Clint Carlson Makes Big Moves In These 4 Stocks

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Hedge fund managers and other money managers follow different re-balancing strategies, which seems appropriate if bearing in mind the wide pool of strategies and styles employed by various investors. It appears that Carlson Capital L.P. started its re-balancing process at the end of 2015, considering that the Dallas-based fund submitted numerous 13G filings with the SEC earlier this month. Carlson Capital is a multi-strategy asset management firm founded by Clint Carlson in 1993, and manages over $8 billion in assets under management. The investment firm primarily engages in risk arbitrage strategies, relative value arbitrage (long/short equity pairs) strategies, cross asset credit arbitrage, and long/short equity thematic. Having this in mind, let’s proceed with the discussion of four 13Gs filed by Carlson Capital and the recent performance of the companies in question.

Most investors don’t understand hedge funds and indicators that are based on hedge funds’ activities. They ignore hedge funds because of their recent poor performance in the bull market. Our research indicates that hedge funds underperformed because they aren’t 100% long. Hedge fund fees are also very large compared to the returns generated and they reduce the net returns experienced by investors. We uncovered that hedge funds’ long positions actually outperformed the market (read the details). That’s why we believe investors should pay attention to what hedge funds are buying (rather than what their net returns are).

Clint Carlson
Clint Carlson
Carlson Capital

According to a Schedule 13G filing, Carlson Capital L.P. currently owns 4.70 million shares of Kindred Healthcare Inc. (NYSE:KND), which account for 5.61% of the company’s outstanding common stock. This compares with the 3.50 million-share position disclosed by the fund through its 13F filing for the September quarter. A healthcare services company, Kindred operates transitional care hospitals, a home health, hospice and community care business, inpatient rehabilitation hospitals, a contract rehabilitation services business, and nursing centers and assisted living facilities. The shares of Kindred Healthcare Inc. (NYSE:KND) are down by 48% over the past year and they seem to be looking for a bottom at the moment.

Kindred Healthcare reported revenue of $5.27 billion for the nine-month period that ended September 30, up from $3.76 billion reported for the same period a year ago. Despite generating noticeable top-line growth, Kindred failed to impress with its bottom-line results. The company reported a loss from continuing operations of $107.85 million for the first nine months of 2015, compared to income of $9.70 million reported for the same period of 2014. Nonetheless, analysts anticipate earnings per share of $1.02 for fiscal year 2016, which yields an attractive forward price-to-earnings ratio of 9.32 (the forward P/E for the S&P 500 stands at 15.75). A total of 35 hedge funds tracked by Insider Monkey were invested in the company at the end of the third quarter, accumulating 30.80% of its shares. Conan Laughlin’s North Tide Capital holds a 5.00 million-share position in Kindred Healthcare Inc. (NYSE:KND) as of the end of the third quarter.

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The next two pages reveal and discuss the other three 13Gs filed by Carlson Capital.

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