The Morning Brief: Och-Ziff Posts Strong Gains, Stock Rebounds

July 06, 2017   Stephen Taub


The hedge fund firm’s stock is still trading at all-time lows, but the firm’s funds are putting up solid numbers this year.

Things are looking up for Och-Ziff Capital Management…at least for now. The multistrategy firm posted strong results in June in what is shaping up to be a solid year. Last month its flagship OZ Master Fund returned 1.37 percent, boosting its gain for the year to 7.50 percent. Its OZ Asia Master Fund gained 2.15 percent last month and 14.65 percent for the first half, while its OZ Europe Master Fund rose 1.35 percent in June and 4.26 percent for the year.

Even so, the firm suffered another $1 billion or so in redemptions last month. As a result, it now manages about $31.8 billion, down $600 million from the previous month despite the gains posted by its main hedge funds. Investors in the management company, however, are upbeat. Its stock rose 1.4 percent on Wednesday and has surged 32 percent since April 21. However, the stock is still trading for a low $2.86 per share.

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Shares of Buffalo Wild Wings fell another 3.3 percent, to close at $123.90, after an analyst at Stephens reportedly downgraded the shares from overweight to equal weight and slashed the price target to $145 from $195. According to the report, analyst Will Slabaugh thinks Marcato Capital Management’s proxy fight has raised more questions than answers, including uncertainty surrounding future leadership, margin pressure, and soft top-line trends. Like other analysts, Stephens raises questions about near-term prospects at the casual dining company. Since Marcato initially reported its stake a year ago, the stock is down nearly $10 per share. It is off nearly 19 percent since CEO Sally Smith said she would resign and Marcato won three seats on the board in early June.

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Julian Robertson Jr.’s Tiger Management disclosed that as of June 21 it owned more than 1.2 million shares of Ooma, or 6.7 percent of the consumer telecom company. It did not own any shares of the company as of the end of the first quarter. On May 24, the stock fell nearly 24 percent after the company reported quarterly results that disappointed Wall Street and lowered its fiscal 2018 guidance. Several investment banks downgraded the stock that day, including Credit Suisse, which lowered its rating from outperform to neutral and cut its price target from $16 to $12, citing "too many unforced errors" by the company.

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Point72 Asset Management said that as of June 30 it owned nearly 1.86 million shares of Vera Bradley, or 5.1 percent of the fashion company. Steven Cohen’s family office did not own any shares of the company at the end of the first quarter.

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Balyasny Asset Management disclosed it owned 2 million shares of Sunesis Pharmaceuticals, or 9.32 percent of the clinical-stage biopharmaceutical company.


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