Alpha Buying: What This $28B Credit Giant Is Betting On

I could try to make the insider activity of the last week tell some cool story that might be worth your attention. I would not be doing you any favors, as there has not been any noteworthy activity in the past week.

Insiders, like every other corporate executive and small business owner in America, are sitting on the sidelines at the moment. The confusion generated by policy decisions in Washington makes the sidelines a very comfortable place right now.

I looked through 13D filings as well, and nothing there struck me as having the potential for returns to get excited about.

Two things I did notice in looking over 13D and 13G filings this week are that there is more selling than buying, and the SPAC arbs are getting back in the game. That means we will probably see an uptick in SPAC offerings soon, especially if the markets decline.

Please do not fall into the whole pre-IPO hype that surrounds these offerings. They are an arb trade that uses private companies to create returns for large institutions that know how to execute the arbitrage.

The idea behind Alpha Buying is to post opportunities in insider and institutional buying, and this week I think we are best served by taking a look at an institution that has an outstanding long-term track record and using their ideas to build a watch list of opportunities.

Back in 1995, two former First Boston colleagues, Brian Higgins and Francis Biondi Jr., quietly launched a credit-focused investment firm with $4 million in capital and a contrarian eye for mispriced assets.

Nearly three decades later, King Street Capital Management has grown into one of the most respected credit-focused alternative asset managers in the world, overseeing approximately $28 billion in assets and operating from offices in New York, London, Singapore, Tokyo, and other global financial hubs.

From the outset, King Street’s strategy was built around complexity. While many were chasing the high-yield trade of the moment, King Street sought opportunity in dislocation, whether in bankruptcies, restructurings, or out-of-favor credits misunderstood by the broader market. The firm’s ability to dig into the granular details of capital structures and legal documents earned it a reputation for deep research and disciplined risk management.

King Street’s investment philosophy is centered around five core tenets:

1. Fundamental research: They rely on detailed, bottom-up analysis of companies, debt instruments, and macroeconomic conditions, always with an eye on downside risk.
2. Opportunistic investing: The firm seeks dislocations and inefficiencies across credit, equities, sovereign debt, and structured finance.
3. Dynamic capital allocation: With flexibility baked into its DNA, King Street reallocates capital as market conditions shift, ensuring resources are always directed where the best risk-adjusted returns lie.
4. Event-driven focus: King Street thrives on complex situations—distressed debt, special situations, legal arbitrage, and corporate reorganizations that many others shy away from.
5. Global perspective: With teams on multiple continents and a willingness to scour the globe for ideas, King Street is anything but parochial.

Over the years, the firm has expanded its platform to include new strategies and structures. In 2017, it launched a collateralized loan obligation (CLO) business, and in 2022, it entered the increasingly competitive world of private credit. What ties these strategies together is the firm’s steadfast commitment to disciplined underwriting and risk control.

If there is a common thread through the firm’s evolution, it is this: King Street succeeds not by chasing yield, but by embracing complexity. It is the kind of shop that thrives when the rest of the market is running scared.

King Street has a phenomenal track record, and thanks to those pesky mandatory 13F filings every quarter, we can see what they own and begin to engage in idea piracy for fun and profit.

Here are the top six largest stock purchases by King Street Capital in the first quarter. These six names are a reminder that not all values look the same. Some are fallen angels, others are restructuring stories, and a few are still clinging to a yield or a dream. Here’s a quick look at what’s happening under the hood.

Surgalign Holdings SRGY

SRGY is a post-bankruptcy shell trying to reinvent itself after selling off its surgical navigation and spine implant business. What’s left is a speculative platform company with little revenue, but with optionality for a pivot or merger. It trades for pennies but has attracted interest from deep-spec value players looking for optionality in the wreckage.

Anywhere Real Estate Inc. HOUS

HOUS, formerly known as Realogy, is the holding company behind Coldwell Banker, Sotheby’s International, and other major brokerage brands. Its debt-heavy balance sheet and razor-thin margins make it highly sensitive to housing cycles. The stock has had moments of life, but its path forward hinges on a sustained rebound in home sales volumes. Restructuring efforts have been slow but may finally be getting traction as mortgage rates peak.

Boeing BA

BA continues to wobble under the weight of its own quality control issues and production delays. Still, the global aircraft replacement cycle is intact, and defense contracts provide ballast. At less than 1x forward sales and still far off its highs, the valuation is more interesting than it has been in years. That said, there’s no margin for error—execution must improve. If it does, the upside is considerable.

Ardagh Metal Packaging AMBP

AMBP makes beverage cans, not headlines, which is exactly the appeal for yield-focused investors. With sustainability tailwinds at its back and a 6%+ dividend yield, AMBP is a durable if under-followed story. Short-term margin pressure and slow European volumes have hurt sentiment, but the core business is intact. If inflation stabilizes, the company’s pricing power and fixed cost leverage could come back into focus.

Uniti Group UNIT

UNIT is a high-yield fiber REIT with a troubled past, mostly due to its overdependence on Windstream, which emerged from bankruptcy in 2020. UNIT has tried to slowly diversify away, but Windstream still accounts for the majority of revenue. It pays a 10%+ dividend, but coverage is tight, and growth is an open question. Investors here are buying a discounted, leveraged bet on fiber infrastructure and hoping the cash keeps flowing.

Altice USA ATUS

Altice was once billed as the next great cable roll-up story. Instead, it became a cautionary tale of debt, poor service, and relentless subscriber churn. With heavy capital needs and rising competition from fiber and wireless, ATUS has seen its valuation crater. Management is trying to pivot toward fiber and operational efficiency, but results have been uneven at best. The stock trades at a distressed multiple, but with negative momentum and eroding fundamentals, catching this falling knife requires either deep conviction or a strong stomach.

Remember, these should go on your watch list, not your “run out and put an enormous amount of money in right this moment” list.