Mott Capital Says Netflix (NFLX) At Forefront of Paradigm Shift, Talks Disney, Hain, NXPI Deal, More

Walt Disney Co (NYSE:DIS)

Coming off a 12.23% gain in Q4, Mott Capital continues to like Disney for some of the same reasons as it does Netflix, believing that the company will eventually launch its own subscription streaming service to tap into the “On-Demand Generation”. The Q4 rebound, which was partially aided by the release of Rogue One in mid-December, which has already grossed over $800 million worldwide, helped Disney shares rise to flat for the year, after they sank to as low as $89 in February and tumbled again during the summer months. Ken Fisher‘s Fisher Asset Management owns 8.74 million shares of Disney as of December 31.

The Hain Celestial Group, Inc. (NASDAQ:HAIN)

Mott Capital closed its position in Hain Celestial Group during the fourth quarter. The fund’s investor letter stated that the position was closed before the audit committee’s results showed that it did not commit fraud, as the fund grew increasingly concerned as the audit dragged on and felt it wasn’t worth the risk of retaining the position.

“The biggest fear that began to arise for me was around restatements of past quarterly results. For me, I just no longer felt it was worth the risk of holding the position anymore. I did not replace HAIN yet in the portfolio. Therefore we are carrying more cash in the portfolio than usual.”

Interestingly, other hedge funds appear to have capitalized on the stock’s steep drop following the news that it was facing an accounting probe in mid-August, as the number of funds in our database long the stock jumped to 32 at the end of September from 23 at the end of June. They’ve been rewarded with gains of over 10% since the end of September.

NXP Semiconductors NV (NASDAQ:NXPI)

Lastly, Mott Capital continues to hold on to NXP Semiconductors on the belief that its impending merger with QUALCOMM, Inc. (NASDAQ:QCOM) will be successful. The fund believes it will be able to get out of the stock much closer to Qualcomm’s $110 offer price; shares are currently trading at just $98.50, offering a spread of over 10%. The fund sees the length of time necessary to complete the merger and the possibility of regulatory intervention (in the minds of others) as factors widening the spread. Unsurprisingly, hedge funds poured into NXPI in Q3 after the late-September merger announcement, with 78 funds owning the stock at the end of September, a jump of 21 from the end of June.

Disclosure: None