Hedge Funds Have Been Buying These Five Stocks

The most up-to-date picture on what hedge funds are buying and selling- though it tends to be somewhat limited- comes in the form of 13D and 13G filings with the SEC. These filings occur once a hedge fund or other major investor buys more than 5% of a company’s outstanding shares (and when it adds to or sells out of that position). Here are five stocks that hedge funds have been buying recently:

CITADEL INVESTMENT GROUP

Billionaire Ken Griffin’s Citadel Investment Group reported owning 6.3% of the outstanding shares of Abercrombie & Fitch Co. (NYSE:ANF). The 5.2 million shares that Citadel owned represented a large increase from the relatively small position the fund had at the end of September (find more of billionaire Ken Fisher’s stock picks from the end of Q3), so Citadel seems to have been buying heavily as the stock has rallied in the recent past. Abercrombie & Fitch’s trailing P/E looks high at 34, though in its most recent quarter earnings were up 41% from the third quarter of 2011. Our analysis of Abercrombie & Fitch concluded that its valuation was not that out of place compared to most of its peers, though larger retailer The Gap Inc. (NYSE:GPS) might be a better value. Abercrombie & Fitch had been one of hedge funds’ top small cap picks in the second quarter of the year.

JANA Partners, a value hedge fund managed by Barry Rosenstein, has been campaigning for a breakup of fertilizer wholesaler and retailer Agrium Inc. (NYSE:AGU) and it recently reported that it had further increased its stake in the company to 9.2 million shares. JANA had owned 7.3 million shares of the stock at the beginning of October (see more of Rosenstein’s stock picks). Breakup opportunities are similar to spinouts in that management of the new companies can focus more closely on improving their particular businesses (read more about why hedge funds like spinouts). Currently, Agrium trades at 12 times trailing earnings.

Over 8% of the outstanding shares of $2.7 billion market cap hospital company Community Health Systems (NYSE:CYH) are owned by Glenview Capital per a 13G filed earlier in November. Glenview, which is managed by former Omega Advisors trader Larry Robbins, owned 7.6 million shares; this was up from 1.6 million at the end of September (see more stocks that Glenview owned at that time). When we reviewed the fund’s 13F, we noted that it had also owned shares in market leader HCA Holdings Inc (NYSE:HCA), which has similar multiples to Community Health Systems and whose business has been performing slightly better recently.

Dmitry Balyasny’s Balyasny Asset Management had been buying shares of Walter Energy, Inc. (NYSE:WLT) during the third quarter and continued purchases since the beginning of October have given the fund a position of 3.4 million shares- over 5% of the total shares outstanding. Walter primarily provides metallurgical coal to steel producers such as United States Steel Corporation (NYSE:X). Macro weakness, particularly in Europe and China, has reduced demand for steel and therefore for metallurgical coal, causing revenue to fall 11% in the third quarter of 2012 versus a year earlier. We don’t think that Walter or any other coal company- whether it is thermal coal or metallurgical coal focused- make particularly good investments (find out more about Walter and other coal companies).

Coliseum Capital Management acquired a total of nearly 2.5 million shares of Casual Male Retail Group, Inc. (NASDAQ:CMRG). According to our database of 13F filings, Coliseum had owned 2.4 million shares of the specialty mens’ retailer at the end of September (see more stocks that Coliseum owned). Coliseum is managed by Christopher Shackelton, who had previously worked at Watershed Asset Management, and Adam Gray. At a market cap of about $185 million, Casual Male trades at 17 times forward earnings estimates. The company reported flat revenue in its most recent fiscal quarter (which ended in October) compared to the same period in the last fiscal year.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!