In a new filing with the U.S. Securities and Exchange Commission, Christian Leone’s Luxor Capital Group disclosed selling 1.0 million shares of BJ’s Restaurants Inc. (NASDAQ:BJRI) for $50.8 apiece. Following the transaction, Luxor Capital Group owns 2.50 million shares of the company, which represent 9.8% of its outstanding common stock. The sale was made under the terms of a secondary block trade agreement with UBS Securities, which bought the shares from Luxor.
Luxor Capital Group is a New York-based hedge fund, with approximately $3 billion in assets under management, founded by Christian Leone in 2002. The investment firm predominantly invests in special situations, distressed companies and global debt across the public equity and fixed income markets around the world. Luxor employs a value-oriented stock picking approach and manages a concentrated equity portfolio worth $6.19 billion, with the top ten holdings accounting for 66.52% of its entire portfolio. In the meantime, Luxor Capital Group’s top three holdings at the end of the first quarter were represented by: Yahoo! Inc. (NASDAQ:YHOO), NorthStar Realty Finance Corp. (NYSE:NRF) and Liberty Global plc (NASDAQ:LBTYK).
Most investors don’t understand hedge funds and indicators that are based on hedge funds’ activities. They ignore hedge funds because of their recent poor performance in the bull market. Our research indicates that hedge funds underperformed because they aren’t 100% long. Hedge fund fees are also very large compared to the returns generated and they reduce the net returns experienced by investors. We uncovered that hedge funds’ long positions actually outperformed the market. For instance the 15 most popular small-cap stocks among funds beat the S&P 500 Index by more than 66 percentage points since the end of August 2012. These stocks returned a cumulative of 123% vs. a 58% gain for the S&P 500 Index (read more details). That’s why we believe investors should pay attention to what hedge funds are buying (rather than what their net returns are).
Luxor has been activist on BJ’s Restaurants since last year, when it formed an activist group with Patrick Welsh of PW Partners Atlas Fund and Jeffrey C. Neal from Horizon Capital. The group nominated three directors to the board last year and pursued the company to return some capital to shareholders and reduce costs.
BJ’s Restaurants Inc. (NASDAQ:BJRI) currently owns and operates 165 restaurants located in 22 states throughout the US. The company’s stock has declined by over 2% since the beginning of the year. However, it seems that the company has been growing at a high pace lately, with new restaurant openings taking place all around the country.