Christian Leone’s Luxor Capital Group Hunted $SHO for Bargain

Christian Leone’s Luxor Capital Group disclosed its new investment in Sunstone Hotel Investors, Inc. (SHO). According to Christian Leone’s latest 13F filing, Luxor Capital Group did not own SHO in Q2. Luxor Capital bought over 6.5 million shares, or 5.6% of all SHO’s outstanding shares, since the end of second quarter. After large slumps in Q3, on Aug 23th, SHO dropped to its 52-week’s lowest point. Christian Leone probably began investing after the stock started to recover. Later at $5.20, the stock had its highest buy-side volume, so Christian Leone might have bought most of the shares at this price. Until Sep 2nd, he continued buying and probably paid more than $5.50 per share for the rest shares. On Friday SHO rallied and it’s currently trading at around $5.96, giving Christian more than 10% profits.

Among more than 300 hedge funds we track, two large stakeholders trimmed their SHO stakes in the second quarter. John Paulson’s Paulson & Co reduced its position by 26% to 3.7 million shares, which corresponds to 3.2% of SHO’s outstanding shares. Glenn Fuhrman and John Phelan’s MSD Capital held 3.6 million shares, or 3.1% of the stock, after a reduction of 10%. Actually SHO really performed badly after Q2, with more than a 40% decline. Christian Leone’s Luxor Capital Group probably grasped the bottom and took advantage of the recovery.

The Luxor Capital Group is managed under Christian Leone and has a portfolio value of more than $3 billion. The firm is involved in Basic Materials, Services, and other sectors, but most of the capital is invested in S&P500 ETF Trust options.

Sunstone Hotel Investors, Inc. was founded in 1995. The company is a real estate investment trust that has interests in the upper-upscale and luxury hotels, including Marriott, Hyatt, Hilton, Starwood, and Fairmont. It engages in the hotel acquisition, enhancement, and optimization in United States.