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Canyon Capital’s Latest Move in Clear Channel (CCO) & Its Other New Picks

Joshua Friedman (pictured) and Mitchell JulisCanyon Capital Advisors has revealed through a filing with the Securities and Exchange Commission that it has upped its stake in Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) to 4.53 million shares, from the 4.42 million shares it held at the end of 2014. In addition to the latest transaction, we’ll also reveal two of the fund’s top new picks from its most recent 13F filing.

Josh Friedman Canyon Capital

Friedman and Julis co-founded the Los Angeles-based Canyon Capital in 1990, with the aim of creating an alternative asset management company that could deliver risk-adjusted returns that would outpace market indices while still providing reduced volatility. The fund currently manages over $23 billion worth of assets, and boasted en equity portfolio valued at $2.44 billion at the end of 2014, a slight decrease from the previous two quarters.

Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) was the 16th most valuable position in Canyon’s portfolio heading into 2015 valued at $46.85 million. Though the position was slashed by 33% during the fourth quarter, it actually moved up a couple of spots and amassed a higher percentage of Canyon’s portfolio after a very strong fourth quarter, as shares rose by more than 50%. That was a strong finish to what had otherwise been a disappointing year to that point for the advertising firm, which specializes in billboards and other forms of outdoor advertising, and boasts nearly one million displays in 30 countries worldwide. Shares were up by 5% in 2014.

Clear Channel Outdoor Holdings, Inc. (NYSE:CCO)’s revenues were up by 1% to $2.96 billionin 2014, while fourth quarter revenues inched down by 1% on the year to $802 million, though excluding currency fluctuations, fourth quarter revenues actually appreciated by 4%. Among the last year’s highlights for Clear Channel was becoming the exclusive sales agent for a new 25,000 square-foot billboard in Times Square in New York.

Canyon was the top shareholder of Clear Channel Outdoor Holdings among funds we track at the end of 2014, slightly ahead of the 4.17 million shares that were owned by Kenneth Mario Garschina’s Mason Capital Management. David Abrams’ Abrams Capital Management meanwhile, owned 3.35 million shares.

A stake in CDK Global Inc (NASDAQ:CDK) was Canyon Capital’s largest new position of the fourth quarter. CDK was a popular stock among funds we track, with 36 investors initiating positions in the company during the quarter, which was shortly after its IPO in late September. Canyon Capital is one of the top shareholders among funds we track with 1.75 million shares valued at $71.15 million. The largest new position went to Jeffrey Tannenbaum’s Fir Tree, which obtained 14.15 million shares during the quarter.

CDK Global

The new company attracted the interest of activist investors immediately, with Scott Ferguson’s Sachem Head Capital taking a 15.80 million shares activist position by the end of October and expressing his intentions to have a dialogue with the management of the company, which he expressed as being undervalued. CDK Global Inc (NASDAQ:CDK), which was previously a division within Automatic Data Processing (NASDAQ:ADP) that provided information technology services to auto dealers, has had an extremely successful run since its IPO, gaining close to 50% in less than six months.

Vivint Solar Inc (NYSE:VSLR) is another company which Canyon Capital took a large new position during the last quarter. The 1.97 million shares stake was valued at $18.12 million, and made Canyon the second largest shareholder among funds from our database, trailing only Ken Griffin’s Citadel Investment Group that owns 2.35 million share stake. Vivint Solar Inc (NYSE:VSLR) is another company which had its IPO at the beginning of October, though the interest was more muted than it was with CDK, with nine funds opening new positions during the quarter.

The solar energy company, which provides solar energy systems to residential clients is bound to have its work cut out for it in a burgeoning field of solar contenders, that includes a number of solar companies (among which are some companies that investors love), including SunEdison Inc (NYSE:SUNE). After a very rough fourth quarter in which shares fell by over 40%, Vivint Solar has rebounded 22% this year on the strength of its most recent quarterly report in February, when it revealed rapidly decreasing costs and vastly increased bookings, which pleased investors.

Disclosure: None