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Carl Icahn and Richard Blum Disclose Their Latest Moves; Should You Follow Them?

During the second quarter, the number of hedge fund holding long positions in Cheniere Energy, Inc. (NYSEMKT:LNG) decreased to 76, from 81, with the total value of their holdings falling by 7.65% to a little over $9 billion. Still, hedge fund managers have control over 54.9% of the company’s common stock. While managers like Seth Klarman and Zach Schreiber have increased their stakes in the company to 15.3 million shares and 9.86 million shares, respectively, short-selling expert Jim Chanos has branded the company a “looming disaster” and has wagered a significant short bet. He expects the recent crash in commodity prices to continue, thus having a major impact on the bottom line of Cheniere Energy.

Blum Capital was founded in 1975 by Richard Blum following a successful stint at Sutro & Co, an investment brokerage firm. Apart from investing in publicly traded companies, Blum also focuses on leveraged buyout and growth capital, and has more than $4.5 billion in assets under management. With an estimated value of $412 million at the end of June, the equity portfolio of Blum Capital is rather small, containing just three stocks. CBRE Group Inc (NYSE:CBG) is Richard Blum’s largest equity position, with the fund reportedly holding 8.27 million shares, down by 27% during the second quarter. Blum has also reduced his stake in Career Education Corp. (NASDAQ:CECO) by 28% to 3.32 million shares, according to Blum Capital’s latest 13F filing. During the second quarter, Blum has also liquidated his investments in ITT Educational Services, Inc. (NYSE:ESI) and Moneygram International Inc (NASDAQ:MGI).

Richard Blum
Richard Blum
Blum Capital Partners

Avid Technology, Inc. (NASDAQ:AVID) has been a poor performer so far this year, currently trading at $7.68 per share, down by 46% year-to-date. At a Price to Earnings (P/E) ratio of 61.xx, the stock is not severely overpriced in comparison with its peers, as the industry average stands at 57.90. For the 2015 second quarter, Avid Technology posted revenues of $109 million, down by 11.9% year-over-year, and a loss of $0.09 per share. Wall Street expects the company to bounce back to profitability and have estimated revenues of $137 million and earnings of $0.50 per share for the current quarter.

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J. Carlo Cannell is very optimistic about the prospects of Avid Technology, Inc. (NASDAQ:AVID) having more than doubled his investment in the company during the second quarter. His fund, Cannell Capital, has reported ownership of 806,234 shares in its latest 13F filing. Chuck Royce, on the other hand, decided to reduce his stake, dumping 18% of his holding by the end of June, leaving his fund, Royce & Associates, with 1.75 million shares. In general, hedge funds have reduced their interest in Avid Technology during the second quarter, with the number of funds invested in the company falling to 19 from 21. Nevertheless, hedge funds control roughly one third of the company’s common stock, their combined positions carrying an estimated value of $174 million, down by 18.8% over the quarter.

Disclosure: none.

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