Quarterly 13F filings are now flowing in for the first quarter reporting period, disclosing the most noteworthy moves made by widely-followed hedge fund vehicles throughout the turbulent first three months of this year. However, retail investors seeking to keep a close eye on hedge funds’ moves should also examine their 13G, 13D, Form 4 and other related filings submitted with the SEC. These filings usually contain very informative content, including insights on why certain companies seem undervalued, which is definitely worth the attention of the investment community. For that reason, the following article will examine four filings recently submitted by noteworthy hedge fund firms tracked by Insider Monkey.
At Insider Monkey, we track around 785 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).
Greenlight Capital Slashes SunEdison Stake
According to a freshly-amended 13D filing, David Einhorn’s Greenlight Capital currently owns 11.33 million shares of Sunedison Inc. (NYSE:SUNE), which account for 2.8% of the company’s outstanding common stock. This stake includes 1.52 million shares of common stock issuable upon conversion of the outstanding 2.00% Convertible Senior Notes due 2018 owned by Greenlight, 1.66 million shares issuable upon the exercise of warrants, as well as 2.92 million shares issuable upon the conversion of 5.00% Senior Secured Convertible Notes due 2018. The total ownership amount represents a significant decrease from the stake of 27.15 million shares disclosed in Greenlight’s original 13D filed on the renewable energy development company, which was submitted with the SEC in late January. Earlier this year, Mr. Einhorn’s Greenlight Capital and Sunedison Inc. (NYSE:SUNE) reached an agreement under which the battered company appointed Claire Gogel, a former executive of Greenlight, to the Board and also amended some policies that hinder SunEdison from making equity issuances without the approval of nearly all Board members.
SunEdison has seen its market value plummet by 98% in the past 12 months, as Wall Street has become more concerned about the company’s extremely weak balance sheet. Just recently, numerous news outlets revealed that the once-highly popular company was preparing to file for bankruptcy. The number of hedge funds in our system with stakes in the struggling solar company declined to 50 from 73 during the final quarter of 2015. David Gallo’s Valinor Management LLC owned 22.24 million shares of Sunedison Inc. (NYSE:SUNE) on December 31.
Let’s head to the next two pages of this article, where we will discuss SEC filings submitted by OZ Management and two other investment firms.