HerbaLife (HLF) has been at the center of a battle of the hedge fund titans after Bill Ackman of Pershing Sq. publicly disclosed his belief that HerbaLife was one of the “best run Ponzi schemes in the world” and said “our price target is zero.” (visit his herbalife site here) No sooner did that news break than did Dan Loeb of Third Point (another notable activist) announced that he was LONG shares of HLF. Finally, Carl Ichan apparently felt he was missing out on the fun so he jumped into the fray (in an exceptionally entertaining exchange on CNBC) calling Ackman’s claims ridiculous (while insisting on referring to him as “this guy”).
We took a deeper look at not only who’s in HFL now, but who’s BEEN in HLF over the years to get an idea of what the full constellation of hedge fund ownership looks like. The top 20 holders of HLF by market value as of Q4 2012 are shown below with Dan Loeb occupying the 9th spot. Interestingly, Loeb and Steve Mandel of Lone Pine are the only two top 20 holders that have totally new positions as of this past quarter:
If we normalize those market values by the total reported long positions for each of those filers we can get a sense of the relative level of conviction each filer has in this name. As we see, most of the top 20 holders, including Loeb, don’t really have a meaningful stake in HLF:
The following is an exceprt from our Q4 Hedge Fund Report:
In Q2, we noted Bill Ackman’s big new investments in Citigroup and Family Dollar (along with other noted activist, Nelson Peltz). In Q3, Ackman slightly increased his Citigroup (C) and Family Dollar (FDO) positions and added two new names: Candadian Pacific Railway (CP) and Lowes (LOW). In Q4, Ackman increased his position in Canadian Pacific Railway 5 times and dropped Lowes entirely:
Last quarter we noted Bill Ackman’s big new investments in Citigroup and Family Dollar (along with other noted activist, Nelson Peltz). Ackman slightly increased his Citigroup (C) and Family Dollar (FDO) positions this quarter and added two new names: Candadian Pacific Railway (CP) and Howard Hughes Corp (HHC):
Ackman as stated his intention to talk with Canadian Pacific’s management, board and shareholders and “other relevant parties” about the future of the railroad. Ackman writes (in his investor letter) that he took advantage of recent market weakness to “ invest more than $600 million in existing investments including Fortune Brands, Kraft, Family Dollar, Citigroup, and two new commitments.”
Fortune Brands (FO) is now the highest “conviction” position followed by J.C. Penny Co (JCP) and General Growth Properties (GGP):