TheChek News Flow

* Allergan (AGN): This was by far and away the most popular new buy among hedge funds in this issue.

Farallon Capital, Viking Global, Perry Capital, and Paulson & Co were all out establishing new stakes.

Expanding AGN activity beyond the scope of this newsletter, tons of other hedge funds were buying as well:

York Capital, Steadfast Capital, Senator Investment Group and more. At the end of Q2, Allergan’s shareholder

list basically became a “who’s who” of hedge funds. This has mainly become an arbitrage play as Valeant

Pharmaceutical (VRX) has been trying to buy AGN, but AGN management has rejected the offers. Bill

Ackman’s Pershing Square is the large activist AGN shareholder leading the charge here.

* DirecTV (DTV): This is yet another arbitrage related purchase as the company received a takeover offer from

AT&T (T). Hedge funds that bought DTV shares include Passport Capital, Farallon Capital, and Paulson &

Co.

* Covidien (COV): Do you see a theme this quarter? In yet another arbitrage related play, hedge funds were

gobbling up shares of Covidien (COV) as the company received a takeover offer from Medtronic (MDT).

Soros Fund, Farallon, and Paulson & Co purchased COV during Q2.

* Ally Financial (ALLY): Ally Financial completed its intial public offering (IPO) during the quarter.

However, some hedge funds already owned positions in Ally’s capital structure prior to the IPO. So while their

equity stakes are new, some funds have been involved in this name for some time. Soros Fund, Paulson, Perry,

and Third Point all show equity positions now.

* Google (GOOG): This stock appears on this list purely for informational purposes. This wasn’t a consensus

open market buy. Instead, Google had a stock split during the quarter and decided to payout shareholders in a

new shareclass. That new shareclass inherited the ticker GOOG and the old shareclass switched tickers from

GOOG to GOOGL. Throughout the issue, you’ll see numerous funds with ‘new’ positions in GOOG shares,

but this is just the new shareclass showing up in their filing that they received from the split.

>>> Consensus Increase Positions

* Actavis (ACT): This tax inversion play has been popular among hedge funds lately. During the second

quarter, Omega Advisors, Viking Global, Lone Pine Capital, Soros Fund and JANA Partners all added to their

pre-existing positions in the name.

* eBay (EBAY): This e-commerce giant has become somewhat of a value play as shares have slumped and

traded sideways. Perry, Omega, Soros, and Carl Icahn were all out buying more shares during Q2.

Additionally, Seth Klarman’s Baupost Group disclosed a new position in the company. eBay’s most valuable

asset is considered its payments platform, PayPal.

* Liberty Global (LBTYA): Hedge funds have been bullish on John Malone’s European cable conglomerate

that is consolidating the industry. Maverick Capital, Coatue Management, Soros Fund, and Berkshire

Hathaway were all out increasing their exposure during Q2.

* Valeant Pharmaceutical (VRX): Shares of VRX fell for two reasons during the quarter. Firstly, some short

sellers started attacking the stock, questioning the company’s accounting surrounding its roll-up strategy.

Secondly, arbitrage short selling pressured the stock as well. Once VRX announced its bid for Allergan

(AGN), arbitrageurs went long AGN and short VRX. Since this proposed deal is payable partially in stock, the

classic merger arbitrage playbook is to buy shares of the company being acquired and to short the acquirer’s

stock. Due to this selling pressure, many non-arbitrage related hedge funds utilized the dip to add to their long

positions in VRX. These funds include Lone Pine, Viking, Maverick, and Soros.

* General Motors (GM): After the company had a rough first quarter, shares largely languished around the

same levels. Some hedge funds decided to beef up their positions, such as Glenview Capital, Appaloosa

Management, Berkshire Hathaway, and Soros Fund. However, in reality GM was more of a ‘mixed activity’

name. As you’ll see on the next page, numerous funds were out selling as well.

>>> Consensus Sold Positions

* Dollar General (DG): Hedge funds that exited their DG stakes include Omega, Farallon, Passport, Pennant

Capital, and Soros Fund. After quarter end, the company just recently announced a bid for Family Dollar

(FDO), which rival Dollar Tree (DLTR) has also made a bid on.

* UnitedHealth Group (UNH): The following hedge funds removed this stock from their portfolio during the

second quarter: Bridger Management, Glenview Capital, and Soros Fund.

* MetLife (MET): This stock was sold by Appaloosa Management, Tiger Management, and Viking Global

during Q2.

* Google (GOOGL): As detailed a few pages ago, Google had a stock split during the quarter and paid out

investors in a new shareclass. The new shareclass inherited the GOOG ticker, while the old shareclass was

given the GOOGL ticker. After the split, some hedge funds such as Blue Ridge Capital decided to consolidate

their holdings into one shareclass as they liquidated their GOOGL shares and retained their GOOG shares.

Other hedge funds decided to merely liquidate their positions altogether.

* General Motors (GM): While many funds sold GM entirely (JANA Partners, Passport, and Paulson), this

stock was realistically more of a ‘mixed activity’ name. As you saw on the page prior, a number of hedge

funds in this issue were also out buying as well.

>>> Consensus decreased Positions

* American International Group (AIG): This stock appears on this list for the third straight quarter. Hedge

funds continue to trim their stake as the discount to book value slowly narrows. And while this was a

consensus decrease name, keep in mind that many of the hedge funds that were selling still own quite sizable

stakes in AIG. As the price has appreciated, their position sizes have gotten larger so they could also be

trimming merely for portfolio construction/risk management reasons as well. Appaloosa, Pennant, Omega,

Blue Ridge, and Fairholme sold some shares in Q2.

* Liberty Global (LBTYK): The quarter prior, this non-voting ‘K’ shareclass was created and paid out to

owners of Liberty Global’s LBTYA shares. After this occurred, it looks like many funds were out increasing

their stakes in LBTYA and reducing their exposure to LBTYK. Funds that cut exposure to the ‘K’ shares

include Third Point, Maverick, Lone Pine, and Soros.

* Citigroup (C): Funds that reduced their exposure to Citi during the second quarter were Blue Ridge, Glenview,

Omega, and Appaloosa.

* Crown Castle International (CCI): In Q2, Viking, Soros, Glenview, and Lone Pine all trimmed their stakes

in this wireless tower operator as shares largely traded in a sideways range.

* Citrix Systems (CTXS): Tiger Management, Perry Capital, Third Point, and Soros Fund all cut back their

position sizes in Citrix during the second quarter.