Market Insider

Lewis Investment In BSC Stirs Wall Street


Investor Joseph Lewis threw his name behind Bear Stearns stock today with the disclosure of a nearly 7% stake in the firm, and the purchase has Wall Street buzzing.

The question is whether Lewis is a passive or active investor in the firm. Just what does he see happening at Bear that would justify an investment of some $860 million? Does he expect a buyer to jump in to bail out shareholders, who have watched the stock's value sink in the subprime mire? Or does he see the stock as unfairly beaten down, and likely to recover after the credit crisis eases. Or will he be a catalyst on his own? One thing for sure is that Lewis has a reputation for savvy investing.

Aquarian Investments, run by Lewis, disclosed the 8.1 million share stake in an SEC filing today. Lewis, a former currency trader and London native, operates from the Bahamas and Florida. His investment vehicle, Tavistock, has interests in more than 170 companies in 15 countries, including the English soccer club Tottenham Hotspu

CNBC's Scott Wapner, who has covered the annual Tavistock cup, has met Lewis and says he has a real strong Wall Street connection and following. Tavistock owns the two private golf club communities that compete for the cup. "Tavistock owns the golf communities where many of the top golfers live and they put on this top event that brings in some of golf's and Wall Street's biggest hitters," said Wapner.

"Joe's comfortable moving in circles whether with Wall Street types or Tiger Woods and the biggest names in sports. He's the kind of guy who people go out of their way to say great things about," said Wapner. "Both Tiger and Ernie Els have told me the reason they invested in projects with Tavistock is because of Joe."

"He's a hell of a philanthropist. He doesn't take much credit for it, but he gives millions of dollars away," Wapner said. Lewis entities Aquarian, Cambria, Mandarin, Nivon and Darcin bought blocks of Bear Stearns stock during August and September, according to the SEC filing. The filing disclosed no intent by Lewis.

Time to buy financials?
Citigroup's chief U.S. stock strategist Tobias Levkovich thinks so. He made a call today on the diversified financial group, taking them from market weight to overweight. "Some of the pain that's already been experienced in these stocks is just overdone. The concerns about credit, the concerns about asset-backed commercial paper has really pounded these stocks," said Levkovich on "Squawk on the Street."

At the same time, he flipped his opinion on some techs, taking hardware and equipment makers to market weight from overweight. Citi also put energy stocks on downgrade watch.

In his note this morning, Levkovich said Citi is changing its weighting on some tech because of its outperformance in the past year and the fact that the good news of strengthening product demand appears to already be in the stock prices.

Levkovich's note also says the 12% decline in financials in the past three months "indicates deep reservations about the industry group's prospects in light of feared mark to market adjustments on illiquid positions, a likely sharp fall-off in merger and structured credit fee generation, and anxiety surrounding bridge loan write-offs." All these things are reflected in stock prices, which he writes could rebound if firms prove some of the dire predictions wrong when they report earnings later this month.

Tech Talk
Another stock to watch today is Intel . The company boosted its revenue guidance for the third quarter, sweeping techs and the Nasdaq higher in early trading. Nasdaq has since turned negative but Intel has not.

Intel says revenues are now expected to range from $9.4-$9.8 billion, up from an expected $9.0-$9.6 billion. Intel said stronger-than-expected worldwide demand for its computing products is the reason for the increase. It also says gross margin should be at the high end of the previous range of "52% plus or minus a couple of points." Intel reports earnings on Oct. 16.

"Intel just reaffirmed what other techs are telling us--that the global economy is strong that consumers are still buying pcs as computer sales have been solid during back-to-school. And it's just another reason to be bullish on tech," said Wapner from the Nasdaq market site.

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