Hedge funds that take a large percentage stake in public companies, or then change the size of their stake in the future (including by selling shares) file 13D or 13G documents with the SEC so that their ownership is public knowledge. At Insider Monkey, we track these filings and while investors cannot invest or divest in every position they take their activity can serve as a good starting point for further analysis. We have gone through some of the filings for the last week and here are some stocks hedge funds have been buying and selling recently:
Billionaire Steven Cohen’s SAC Capital Advisors took a large stake in Magellan Health Services Inc (NASDAQ:MGLN), a $1.4 billion market cap company which serves insurance companies. SAC owned 1.4 million shares at the time of the filing, putting right about at the 5% mark that triggers a filing. Magellan could be a value candidate, trading at 13 times trailing earnings and 12 times forward earnings estimates (though these multiples are not particularly low compared to the rest of the industry). Its beta of 0.7 indicates that it has at least some protection from a downside in the market. See further analysis of Cohen’s purchase, including comparisons to peers such as UnitedHealth Group Inc. (NYSE:UNH).
Gates Capital Management had initiated a 2.2 million share position in Mercer International Inc. (NASDAQ:MERC) during the second quarter, and had increased the size of this position to 3.4 million shares by the middle of September. Mercer has a market capitalization of about $400 million and produces wood pulp which is then sold to manufacturers of paper products such as tissues. The stock price has a strong correlation to the broader market, carrying a beta of 3.9, though more recently it has underperformed (the stock is up 1% over the last year). Wall Street analysts think that the company has good prospects to increase its earnings. Based on their estimates, its forward P/E is 7 even though the trailing P/E is about twice that figure.
Thomas Claugus’s GMT Capital decreased the size of its position in Fushi Copperweld, Inc. (NASDAQ:FSIN) to 3.2 million shares from the 3.5 million shares it had owned at the end of June. Fushi Copperweld is a roughly $300 million market cap company (with about $3 million in average daily dollar volume over the last three months) which manufactures wires and cables for utility and transportation customers. The stock is up 96% over the last year, so we could see some of these sales being driven by profit-taking. However, the company has reported good numbers to the point where investors actually look skeptical of the company: its trailing P/E is 13, its forward P/E is 10, and the five-year PEG ratio according to analyst expectations is 0.8.
Healthcare-focused RA Capital Management, run by Harvard Ph.D. Peter Kolchinsky, reported ownership of 2.6 million shares of Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS). Sunesis is a development-stage biotech company whose best shot at a new drug is Vosaroxin. Vosaroxin is in various stages of clinical trials for different categories of patients suffering from acute myeloid leukemia. The $268 million market cap company began the year at below $1.50 per share but has risen dramatically over the course of 2012 and now trades at about $5.70 as the market expects progress towards FDA approval and drug marketing. A recent pop in the stock price, for example, was driven by the company’s announcement that it was expanding a phase 3 trial for Vosaroxin. RA Capital Management now owns 5.4% of the shares outstanding; earlier this month another fund, Visium had filed with the SEC to declare ownership of 4.5 million shares.