Kyle Bass said on Bloomberg today that now is “the hardest time to invest” he has ever seen. He suspects that Nancy Pelosi and Harry Reid want the U.S. to go over the fiscal cliff for political reasons.
Bass, founder of hedge fund Hayman Capital, has half of his fund in subprime bonds, which he sees as “bulletproof.”
In his equity portfolio in the third quarter, he sold out of six stocks: GasLog Ltd. (GLOG, Financial), Dynegy (DYNIQ, Financial), Whiting USA Trust II (WHZ, Financial), Tellabs (TLAB, Financial) Magnum Hunter Resources Corp. (MHR, Financial) and Alcatel-Lucent (ALU, Financial). This left him with five stocks, valued at $70.32 million, including two new ones: Hyatt Hotels Corp. (H, Financial) and Sealy Corp. (ZZ, Financial).
Hyatt Hotels (H)
Bass bought 323,250 shares for $38 per share on average, which equates to 18.5% of his portfolio. Its shares have gained 23.5% since its IPO in November 2009.
Chicago-based Hyatt Hotels, a leading global hospitality company, has seen revenue increase annually from $3.3 billion in 2009 to $3.7 billion in 2011. Net loss was $42 million in 2009, which turned to a net gain of $113 million in 2011.
Hyatt has produced free cash flow for the past three years. It has cash of $1.6 billion and long-term liabilities and debt of $2.2 billion.
Hyatt also achieved expanding annual gross, operating and net margins for the past three years.
Hyatt has a P/E of 45.2, P/B of 1.2 and P/S of 1.5.
In the third quarter, the company repurchased 911,244 shares at an average price of $38.78 per share, for a total cost of $35 million.
Bass, founder of hedge fund Hayman Capital, has half of his fund in subprime bonds, which he sees as “bulletproof.”
In his equity portfolio in the third quarter, he sold out of six stocks: GasLog Ltd. (GLOG, Financial), Dynegy (DYNIQ, Financial), Whiting USA Trust II (WHZ, Financial), Tellabs (TLAB, Financial) Magnum Hunter Resources Corp. (MHR, Financial) and Alcatel-Lucent (ALU, Financial). This left him with five stocks, valued at $70.32 million, including two new ones: Hyatt Hotels Corp. (H, Financial) and Sealy Corp. (ZZ, Financial).
Hyatt Hotels (H)
Bass bought 323,250 shares for $38 per share on average, which equates to 18.5% of his portfolio. Its shares have gained 23.5% since its IPO in November 2009.
Chicago-based Hyatt Hotels, a leading global hospitality company, has seen revenue increase annually from $3.3 billion in 2009 to $3.7 billion in 2011. Net loss was $42 million in 2009, which turned to a net gain of $113 million in 2011.
Hyatt has produced free cash flow for the past three years. It has cash of $1.6 billion and long-term liabilities and debt of $2.2 billion.
Hyatt also achieved expanding annual gross, operating and net margins for the past three years.
Hyatt has a P/E of 45.2, P/B of 1.2 and P/S of 1.5.
In the third quarter, the company repurchased 911,244 shares at an average price of $38.78 per share, for a total cost of $35 million.
H data byGuruFocus.com
Sealy Corp. (ZZ)
Bass bought 3,817,860 shares of Sealy Corp for $2 per share on average, which is an 11.8% weighting of his portfolio.
On Sept. 27, Tempur-Pedic (TPX) announced it would acquire the bedding manufacturer for $2.20 per share, a 23 percent premium to Sealy’s 20-day average closing price on Wednesday, Sept. 26, 2012. The companies expect the deal to close in the first half of 2013.
Sealy today trades for $2.19 per share after increasing 27.33% year to date.
See Kyle Bass’ updated third quarter portfolio here. Also check out his undervalued stocks, top growth companies and high yield stocks.
