After an eventful Tuesday in terms of meaningful M&A activity, two bold hedge fund managers are making waves, one by buying a big stake in a struggling restaurant chain, the other for buying up an entire corporation.
In this hedge-fund-titan-heavy edition of pre-market movers, we’ll take a look at why five stocks, Chipotle Mexican Grill, Inc. (NYSE:CMG), Advanced Micro Devices, Inc. (NASDAQ:AMD), Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY), Icahn Enterprises LP (NASDAQ:IEP), and Federal-Mogul Holdings Corp (NASDAQ:FDML) are each in the spotlight today. We’ll also use the latest 13F data to determine how hedge funds are positioned in each stock.
Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
Ackman Orders a Big Stake of Chipotle
Chipotle Mexican Grill, Inc. (NYSE:CMG) is in the spotlight today after hedge fund superstar Bill Ackman of Pershing Square disclosed a 2.88-million-share stake in the burrito chain. Those 2.88+ million shares equate to 9.9% of Chipotle Mexican Grill, Inc. (NYSE:CMG)’s float. According to the filing, Ackman believes Chipotle is undervalued and he intends “to engage in discussions with the Issuer and Issuer’s management and board of directors, other stockholders of the Issuer and other interested parties that may relate to the governance and board composition, business, operations, cost structure, management, assets, capitalization, financial condition, strategic plans, and the future of the Issuer.” We covered the filing in greater detail last night.
AMD Raises Money
Perhaps taking advantage of the huge run-up in its stock price this year, Advanced Micro Devices, Inc. (NASDAQ:AMD) announced plans on Tuesday to raise $600 million in equity and $450 million in convertible senior notes due 2026. The company plans to use the proceeds to purchase up to $1.02 billion in senior notes and to repay up to $226 million in borrowings. Of the 749 hedge funds that we track which filed 13F’s for the June quarter, 25 had a long position in Advanced Micro Devices, Inc. (NASDAQ:AMD) at the end of June, up by 12 from the end of the previous quarter.
On the next page we’ll find out why Dave & Buster’s Entertainment, Icahn Enterprises LP, and Federal-Mogul Holdings have investors buzzing.