Three Big Buys by Kyle Bass in the Fourth Quarter: Huntsman Corporation (HUN), Tempur-Pedic International Inc. (TPX)

Tempur Pedic International

Hayman bought 660,000 shares of Tempur Pedic; this third stake comprised 12.95% of the firm’s portfolio.  The beddings manufacturer has been surpassing earnings expectations in all the quarters of 2012. Based on its debt-equity ratio (mrq) of 45.96, the beddings manufacturer is heavily indebted. However, its quick ratio and current ratio should be able to tell you that it can easily extinguish its current liabilities if it so wishes.  Currently, the company is slowly creating momentum in its stock price. Compared to that of the latest quarter, the price is now higher, above the $35 mark. However, Mr. Bass seemed to have been too excited about TPX, gambling 12.95% of the assets under his command, especially with a lower than historical profit margin and declining quarterly revenue. Since March of 2010 up to March 2012, TPX boasted a double-digit revenue growth. This has turned into a negative figure in the last 3 consecutive quarters.

Hayman’s big buys have been doing fine so far in terms of stock gains since the latest quarter. Also, the fact that all three top stocks have had positive earnings surprises justifies the firm’s decision to initiate its position. But putting them on the top of the portfolio is another thing. Even with some positive gains in these stocks’ performances, I’m sure there are other companies I can find that are far more exciting than these three.

The article Three Big Buys by Kyle Bass in the Fourth Quarter originally appeared on Fool.com and is written by Aubrey Tabuga.

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