Noteworthy 5% Fund Ownership Filings Last Week: 2 New And 3 Increased Positions

Many leading funds, including SAC Capital, Elliott Associates, and Healthcor Group, filed forms 13-D and 13-G (and form 4) with the SEC last week (May 14th to 18th, 2012), indicating that they had amended their ownership in U.S. traded public companies. Based on our analysis, the following are the more noteworthy filings (for more info on Forms 13-D and 13-G, and how to interpret that, please refer to the end of this article):

BMC Software Inc. (BMC): BMC provides software to the largest global corporations and the smallest businesses in over 120 countries to manage their business services and applications across distributed, mainframe, virtual and cloud environments. On Friday, legendary hedge fund manager Paul Singer's Elliott Management Corp., with more than $20 billion in assets under management, filed SEC Form SC 13D indicating that it holds 8.78 million or 5.5% of outstanding shares of the company, an increase from the 0.20 million shares it held at the end of Q1. The purchase makes Elliott the third largest institutional holder of BMC shares, behind Dodge & Cox with 14.48 million shares, and Vanguard Group with 9.61 million shares.

Elliott has taken an activist stance to its investment in BMC, nominating five candidates for election as directors, and suggesting in an attached letter to the filing its belief that the Board should immediately engage in pursuing a sale of the company. Elliott explained in the letter that the sale was recommended based on its analysis that BMC will have a difficult future going forward as a stand-alone company, and that the value of its assets can best be realized by being acquired by a larger company in the space, also stating its belief that the window of opportunity to preserve and maximize BMC's inherent value was rapidly closing.

In what is shaping out to be a fight, BMC has retrenched and adopted a 10% poison pill threshold. However, shares are up since the news first came public on Monday of Elliott's notice to BMC of it intent to file a 13D, up over 10% in the days after that report at its highs, and have settled since to a 4% increase at the close of business on Friday. It seems that investors are betting that Elliott will succeed in this fight, and that a sale will ultimately happen at a premium to current prices, based on Elliott's successful track record in prior stakes in Novell and Blue Coat Systems.

Additional major 5% institutional ownership filings last week included:

• Cheniere Energy Inc. (LNG), an operator of LNG receiving terminals and natural gas pipelines in the Gulf Coast of the U.S., in which two institutions filed SEC Forms 13G, each indicating that it holds 15.50 million shares, with the institutions being private-equity firm RRJ Capital and Temasek Holdings, the government of Singapore's $185 billion investment company.
• Allscripts Healthcare Solutions (MDRX), that is a provider of clinical, connectivity and patient information software applications for healthcare providers, in which New York-based Healthcor Group, with $2.65 billion in 13-F assets at the end of Q4, and investing primarily in later-stage developmental and growing mid-sized companies in the healthcare sector, filed SEC Form SC 13D indicating that it holds 10.50 million or 5.5% of outstanding shares, an increase from the 7.20 million shares it held at the end of Q1, thereby making it the second largest institutional holder of MDRX behind T Rowe Price that held 12.55 million shares at the end of Q1;
• Ciena Corp. (CIEN), that is a designer of Ethernet transport and switching systems used in network infrastructure by telecom and cable service providers, in which billionaire star fund manager Stephen Cohen's hedge fund SAC Capital Advisors, with over $15.7 billion in 13-F assets, filed SEC Form SC 13G indicating that it holds 5.16 million or 5.2% of outstanding shares, an increase from the 1.75 million shares it held at the end of Q1; and
• Specialty pharmaceutical company Valeant Pharmaceuticals International Inc. (VRX), in which San Francisco-based shareholder activist-oriented hedge fund ValueAct Capital Management, with $5.8 billion in 13-F assets at the end of Q4, filed SEC Form 4 indicating that it purchased 295,000 shares, ending with 15.81 million shares after the purchase.

Credit: Fundamental data in this article and company descriptions are based on SEC filings, Zacks Investment Research, Yahoo, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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