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By Matt Doiron

The last couple of years have not been good for John Paulson, as the billionaire- who became successful through his short of mortgage backed securities shortly before the financial crisis- has seen his fund struggle to generate absolute returns. He is still closely followed in the media. We have gone through the most recent 13F filing for Paulson's Paulson & Co.; these filings disclose many of a hedge fund or other major investor's long positions in U.S. equities at the end of the previous quarter (in this case, December). We follow hedge fund managers because it has been possible to outperform the market by as much as 18 percentage points per year (see the details here). Read on for our quick take on Paulson's five largest single-stock positions as of the end of December and compare them to previous filings.

After a large position in the gold ETF GLD, the largest 13F position was in AngloGold Ashanti Limited (AU); Paulson's concentration in gold has been part of the reason for his fund's struggles in the last year (GLD is down 9% in that time as it cools after a strong run-up the previous several years). AngloGold has been hit even harder, with its stock price falling 38% in the last year. The company itself has been performing poorly: in the third quarter of 2012, revenue fell 9% versus a year earlier and net income was down 63%.

The fund initiated a position of almost 128 million shares of Sprint Nextel Corporation (S) during the fourth quarter of 2012. Wall Street analysts expect Sprint to be unprofitable both this year and next year. However, the company has been making some big strategic moves, including selling a large stake to Softbank, and many investors are confident that its lower-cost business model will allow it to make gains at the expense of larger peers. The stock is up 160% in the last year- again, despite the lack of profits. Billionaire Leon Cooperman's Omega Advisors was also buying Sprint (see Cooperman's stock picks).

Acquisition target Nexen Inc. (NXY) was next on the list of Paulson's stock picks. Before he dabbled in global macro, Paulson was best known as a merger arbitrage manager and he has maintained that strategy. Nexen is set to be acquired by Chinese oil company CNOOC; the deal has been approved both by the U.S. and by Canada (some of Nexen's most valuable assets are in the Alberta tar sands, a rich source of unconventional oil). The deal is expected to close in the first quarter of 2012, so the gap between the transaction price and the market price may have narrowed too much for most investors.

Paulson added a small number of shares to his position in Life Technologies Corp. (LIFE), an $11 billion market cap company providing medical laboratory services. Life Technologies reported earnings growth of 18% last quarter compared to the fourth quarter of 2011, though sales were down very slightly. The stock carries trailing and forward P/E multiples of 26 and 13 respectively, showing that the sell-side expects rapid growth on the bottom line over the next couple years and that the market has priced in some - but not all - of its optimism. Glenview Capital, managed by Larry Robbins, owned over 11 million shares at the beginning of 2013.

The fund kept its holdings of Mylan Inc. (MYL) about constant at a little under 25 million shares. Mylan is a manufacturer of pharmaceuticals, both branded and generic; the generic business is of particular interest to many investors as a number of drugs come off patent protection in the coming years. In fact, the current-year P/E is only 10 as analyst consensus is quite bullish. The company's most recent quarterly report showed double-digit growth rates in both revenue and earnings compared to the same period in the previous year, and it might be worth considering as a "growth at a reasonable price" stock.

Source: Billionaire John Paulson's Top Stock Picks