Pine River Capital Management Upps Stake in Yongye International Inc. (YONG)

Pine River Capital Management, run by Brian Taylor, has declared an increase in its position in Yongye International, Inc (NASDAQ:YONG). The fund disclosed ownership of more than 4.1 million shares, up from the 3.46 million previously held.

Pine River Capital Management had started a position – with 3.46 million shares- in the $356 million market cap crop nutrient company in early June. Its current stake accounts for 8.1% of Yongye International, Inc (NASDAQ:YONG)’s outstanding stock, and is worth more than $28 million at the current stock price.


In addition, Mr. Taylor’s 4.1 million shares make him the largest hedge fund shareholder at Yongye International, Inc (NASDAQ:YONG) –amongst those we keep track of. Another fund that recently upped its bets on the crop nutrient company is Noam Gottesman’s GLG Partners. The hedge fund last declared holding 3.565 million shares, up by 2413% over the last reported quarter. Moreover, Glenn J. Krevlin’s Glenhill Advisors owns 2.01 million shares, and James Dinan’s York Capital Management started a position in the stock over Q1, with 1.88 million shares.

The hedge fund bullishness can be understood by simply looking at the company’s fundamentals. Yongye International, Inc (NASDAQ:YONG)’s stock trades at only 1.8 times the company’s earnings, at a 90% discount to the industry average, while boasting industry leading margins and returns, and holding a history of great revenue and net income growth.

Unlike hedge funds, insiders at Yongye International, Inc (NASDAQ:YONG) do not look particularly bullish –nor bearish.  The company has not seen any insiders buy its stock since September 2011, nor sell it, since March 2010.

Pine River Capital Management is a hedge fund founded by Brian Taylor in 2002. Mr. Taylor launched the fund with only $5.3 million, but Pine River Capital now has an equity portfolio worth more than $6.4 billion, mainly focused on financial stocks. I should highlight that Pine River is a credit hedge fund that pursues several strategies, including global convertible bond arbitrage and equity driven event investing. The fund returned 91% in 2009.


Disclosure: Javier Hasse holds no position in any stocks or funds mentioned.

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