As we continue to track hedge funds’ activity, I came across two interesting transactions that took place recently. Howard Marks’ Oaktree Capital Management started a new position in Molycorp Inc (NYSE:MCP), with 24.47 million shares, while James Dinan’s York Capital Management trimmed its exposure to Gilat Satellite Networks Ltd (NASDAQ:GILT) by 14%. In this article we will take a closer look at these transactions in order to find out if any of these companies stand as attractive investment options.
Molycorp Inc (NYSE:MCP) is a $318.5 million market cap manufacturer of custom engineered rare earth and rare metal products. On September 18, Oaktree Capital Management disclosed a new stake in the company, with 24.47 million shares of Common Stock, which account for 9.1% of its total shares outstanding. Mr. Marks’ fund had already invested in Molycorp Inc (NYSE:MCP) before: by the end of the second quarter of 2014, the fund disclosed ownership of a bond worth more than $18 million. The current stake makes of Oaktree Capital Management the largest hedge fund shareholder (amongst those we track) at the company.
Other major hedge funds betting on Molycorp Inc (NYSE:MCP) are Glenn Russell Dubin’s Highbridge Capital Management and Chuck Royce’s Royce & Associates, which own 3.13 million shares and 2.58 million shares, respectively. Both these funds declared boosts in their stakes over the last reported quarter.
Molycorp Inc (NYSE:MCP)’s stock is down more than 76% year-to-date, so an attractive entry point is open. However, is it time to invest? Or has the stock plummeted because prospects are not promising? Certainly, this issue deserves further research but, at first glance, we could attribute it to an adjustment of expectations, coupled with falling demand and a weak financial structure.
On the opposite sidewalk, York Capital Management reduced its exposure to Gilat Satellite Networks Ltd (NASDAQ:GILT). According to the filing, the fund sold 849,182 Ordinary Shares of the Company to Mr. Dov Baharav for $4.95 per share. Following a sale that totaled more than $4.2 million, York Capital Management owns 5.16 million shares, which account for approximately 12.2% of the company’s outstanding stock, and make it the largest hedge fund shareholder.
Another big hedge fund manager that seems quite bullish about Gilat Satellite Networks Ltd (NASDAQ:GILT) is Jim Simons, of Renaissance Technologies, who last acknowledged ownership of 2.03 million shares, worth more than $9.4 million.
Gilat Satellite Networks Ltd (NASDAQ:GILT) is a $202.56 million market cap provider of satellite communications products and services. It design and manufacture satellite ground segment and networking communications equipment. Its products include VSAT, Defense and security satcom systems, among others.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned