Hedge Fund News: Whitney Tilson, AeroVironment, Inc. (AVAV), Caterpillar Inc. (CAT)

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Editor’s Note: Related tickers: AeroVironment, Inc. (NASDAQ:AVAV), Caterpillar Inc. (NYSE:CAT), SandRidge Energy Inc. (NYSE:SD), H.J. Heinz Company (NYSE:HNZ), Goldman Sachs Group, Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM), Dell Inc. (NASDAQ:DELL), Philip Morris International Inc. (NYSE:PM)

T2 PARTNERSCollege sex pushes hedgie dad’s buttons: ‘If a guy tells you to get down on your knees – bite it!’ (NYPost)
Outspoken hedge-fund manager Whitney Tilson usually sticks to the stock markets — not sex tips. Prompted by a recent New York Times story about the campus “hookup” culture at the University of Pennsylvania, the founder of Kase Capital caused a stir yesterday with a widely circulated e-mail and blog posting offering some advice to his three daughters should a guy ever tell them to “get down on your knees.” While Tilson’s suggestions for escaping the situation started out tame (“Walk away”) it quickly escalated with his fifth and final item: “Bite it!” In all cases, Tilson — who is active in education-reform circles — said he would ask that his girls “come home and tell me his name so I can buy my first gun and … well, you get the idea!”

Hedge Fund Takes Interest in AeroVironment (LABusinessJournal)
AeroVironment, Inc. (NASDAQ:AVAV) shares jumped 14 percent Wednesday on news that an activist Newport Beach hedge fund had acquired a 5.1 percent stake in the Monrovia maker of unmanned drone aircraft and electric-car charging stations. …Engaged said in a press release that AeroVironment, Inc. (NASDAQ:AVAV)’s share price could be boosted with better corporate governance and financial disclosures, a stronger capital structure and renewed focus on capital allocation. “In our view, concerns over an excess of cash in the capital structure, a lack of granularity and specificity with respect to its growth plans, and uncertainty surrounding its heavy exposure to the defense budget are all addressable issues,” Glenn Welling, Engaged’s principal and chief investment officer, said in a statement.

Jim Chanos: Why I’m Short Caterpillar (Forbes)
China, the end of the commodities supercycle and accounting issues. In short, that’s why hedge fund manager James Chanos is shorting Caterpillar Inc. (NYSE:CAT) -2.38%. …Caterpillar Inc. (NYSE:CAT) has 30% of its revenue and half of its operating profits tied to global mining capital expenditures, Chanos says, and the hockey stick growth of that spending over the last decade-plus is waning. “One third of global mining cap-ex is equipment, and that lands you in Peoria, Ill., at the doorstep of Caterpillar Inc. (NYSE:CAT),” the hedge fund manager said.

Leon Cooperman Likes SandRidge, Qualicorp And Fat Yields In Financials (Forbes)
A year ago Leon Cooperman said the stock market was the best house in the financial neighborhood. He still feels that way, but has dialed back his expectations thanks to a strong run for the S&P 500. …Cooperman described himself as “less ebullient, but constructive” before firing out a fresh list of 10 stocks he thinks will do well, including SandRidge Energy Inc. (NYSE:SD). …He also likes Brazilian healthcare outfit Qualicorp, another stock he thinks could double, if expected earnings growth of 20% comes through. Cooperman notes that management has a 30% stake in the business and 3G, the private equity firm that teamed up with Warren Buffett to buy H.J. Heinz Company (NYSE:HNZ) earlier this year, has a seat on the boar and “keen interest,” in seeing the company do well.

Bruised FX hedge funds tiptoe back into bets on weaker yen (Reuters)
Hit by a whipsawing yen in the last two months, many FX hedge funds are still determined to bet the Bank of Japan will succeed in weakening the currency over time while the dollar climbs as the Federal Reserve withdraws its stimulus. The Fed’s first hints in May that it may start to pull back from its $85 billion dollars-per-month programme led to a rebound in the safe-haven yen as investors stampeded out of emerging markets and commodity currencies. Its more recent indications that it will stick with its stimulus until later this year have eased some of the market’s qualms, however, and some hedge funds are tiptoeing back into bets against the yen.

Where is the Sweet Spot for Hedge Fund AUM? (ai-CIO)
Investors who plumped for a middle-sized, equity-focussed hedge fund stood a better chance of outperformance last year than those opting for larger or smaller options, research has found. US-based, equity-focussed hedge funds with between $500 million and $3 billion performed the best out of their peer group in 2012, partly due to their size, a survey by Tabb Group today has shown. “Medium-sized hedge funds fared the best in 2012, with 79% reporting positive performance and only 14% experiencing negative performance,” the survey said. “Small firms reported the largest percentage of negative performance, but this represented an improvement over 2011.

Paulson says his funds’ fortunes are up; bullish on buying homes (Reuters)
Hedge fund billionaire John Paulson wants the world to know he is having a good year. After two years of losses in his once enormous Advantage Funds, Paulson has something to brag about in 2013 with his Recovery fund up 25.22 percent and his Paulson Enhanced fund up 15.63 percent. The Paulson Credit Opportunities fund is up 11.2 percent, even after some losses in June. “We are having a very strong year,” Paulson told an audience of investors and hedge fund managers at the CNBC Institutional Investor Delivering Alpha Conference on Wednesday.

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