The hedge fund industry is required to file quarterly 13F filings within 45 days after the end of each fiscal quarter. This implies that retail investors monitoring hedge funds’ moves will get the chance to see all noteworthy hedge fund moves by mid-May. However, investors can also keep track of hedge funds’ 13D, 13G, and Form 4 filings, which disclose more up-to-date moves with regard to certain high-conviction ideas. So let’s discuss three SEC filings recently submitted by several hedge funds tracked by Insider Monkey.
At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
Billionaire Andreas Halvorsen Buys New Stake in Independent Oil and Gas Company
In a new Schedule 13G, Andreas Halvorsen’s Viking Global Investors LP disclosed a new stake of 10.13 million shares of Rice Energy Inc. (NYSE:RICE), which account for 6.5% of the company’s outstanding common stock. While the 13G does not reveal at which price levels the 10.13 million-share stake was acquired, it is highly likely that Mr. Halvorsen’s investment firm purchased the stake through a freshly-completed public offering. Specifically, the independent natural oil and gas company completed the public offering of 29.86 million shares on April 15 at a price of $16.35 per share, of which 9.86 million were sold by a selling stockholder. Rice Energy Inc. (NYSE:RICE) intends to use $200 million of the net proceeds of $312 million to acquire Marcellus and Utica assets from Alpha Natural Resources, which filed for chapter 11 bankruptcy protection in August 2015, while the remainder are said to be used for general corporate purposes.
Earlier this month, Moody’s Investors Service confirmed Rice Energy’s B2 Corporate Family Rating, saying that “Rice’s rating confirmation and stable outlook reflect the company’s continued strong growth in production and proved developed reserves, which we expect will continue through 2017, supported by a good liquidity profile”. Going back to the aforementioned acquisition of assets, Rice Energy recently entered into a stalking horse asset purchase agreement with a subsidiary of Alpha Natural Resources to acquire leasehold interest in approximately 27,400 net undeveloped Marcellus acres, as well as an additional 3,200 gross acres owned in fee that are leased to Rice. However, Rice Energy may not be able to acquire Alpha’s assets given that other possible buyers may submit competing bids for the bankrupt company’s assets once the stalking horse makes its bid.
The independent natural oil and gas company has seen its market capitalization gain 51% since the beginning of 2016. There were 19 hedge funds monitored by Insider Monkey with stakes in Rice Energy at the end of 2015, which amassed nearly 26% of the company’s shares. Ken Griffin’s Citadel Advisors LLC owned 10.72 million shares of Rice Energy Inc. (NYSE:RICE) at the end of December.
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Let’s move on to the next pages of this article, where we will discuss two separate SEC filings submitted by two hedge funds tracked by Insider Monkey.