$6 Billion Hedge Fund Just Bought More of This Stock

Terex Crane and Nelson (Photo credit: kenjonbro)

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In a 13G filed with the SEC, Pennant Capital Management, managed by Alan Fournier, reported that as of July 27 the fund owned 9.3 million shares of Terex Corp. (NYSE: TEX). This gave Pennant ownership of 8.5% of the company’s shares outstanding.

Terex provides capital goods; its products include lifts (including under the Genie brand), construction equipment, and cranes. At the end of March, Pennant had reported a position of 7.6 million shares, so the new report represents a significant increase in Pennant’s stake. Year to date Terex is up over 40%, though that gain came early in the year and the stock is actually down 5% since the beginning of February. This decline has come despite the company demolishing earnings expectations in the first two quarters of the year, beating them by over 30% in each case.

In the second quarter of 2012, for example, Terex increased its revenue 35% compared to the second quarter of 2011, and a marginal net loss became a net gain of $86 million. For the first half of the year, revenue increased 40% and net income increased from $11 million to $109 million. In addition, Terex generated positive cash flow from operations in the first half of 2012, which it failed to do in the first half of 2011 ... Continue to read.

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