Kyle Bass – founder of the Dallas-based hedge fund Hayman Capital Management, L.P. and known for accurately predicting the subprime mortgage crisis that began in 2008 — has sold his shares of Herbalife Ltd. (NYSE:HLF), a company which sells weight-loss, nutrition and skin-care products. Bass is instead investing in real estate, as well as oil and gas, reports the Wall Street Journal.
Bass’ end-of-year holdings report, which was released on Friday, indicates that the hedge-fund manager no longer owns shares or options of Herbalife, a health and nutritional-products company. The end-of-year report is in contrast to earlier last year when, in September 2013, Bass revealed that he owned more than $30 million in Herbalife shares.
Bass, having sold his shares in the fourth-quarter, timed his investment quite well. Herbalife’s stock rose 13 percent in the fourth-quarter, and an impressive 70 percent over the entire second half of 2013, during the period Bass owned stock of the company.
Herbalife has been down 16 percent thus far in 2014, but the company’s stock was at an all time high through much of December, according to the Wall Street Journal.
Bass’ 13F filing reveals that he has replaced Herbalife with a number of real estate and oil and gas stocks, including Nationstar Mortgage Holdings Inc., Altisource Residential Corp., and Rayonier Inc. for real estate and Kinder Morgan Inc., Comstock Resources Inc., and Occidental Petroleum Corp. for oil and gas.
Along with Herbalife, a couple other names have dropped off the Hayman Capital’s 13F, including Microsoft Corp. and J.C. Penney. According to one Barron’s blogger, only four stocks from the hedge fund’s September filing remain in the year-end report. The end-of-year filing also described Hayman’s stake in General Motors as 4.6 million shares, not including warrants and options.
Herbalife continues to be a controversial stock amongst hedge fund managers, with Bill Ackman of Pershing Square Capital claiming that the company operates essentially as a “sophisticated pyramid scheme.”