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Daniel Seth Loeb founded Third Point in 1995. He has more than $4 billion in assets under management. In 2005, he made $150 million, in 2006 he made $200 million, and in 2007 he made $270 million. In 2010, Third Point’s flagship fund returned 41.7%. He is known as an outspoken activist investor. His explicitly mocking letters that address various present issues are widely enjoyed by readers. His letter to his clients regarding Fairfax gained considerable media attention. Loeb claimed Fairfax had significant accounting irregularities and could possibly be a fraud. Fairfax sued Loeb among other investors shorting Fairfax in 2006. We have discussed this in a previous article.

During the second quarter, Loeb reduced his fund’s stakes in Williams Companies (WMB) by 76%, Liberty Media (LINTA) by 25%, and CVR Energy (CVI) by 14%. WMB lost 5%, LINTA lost 9%, while CVR gained 5% since the end of June. Despite the decrease, CVI is still the third-largest holding in Third Point’s 13F portfolio. Here are Loeb’s top stop picks at the end of June.

Company

Ticker

Value (x1000)

Activity

Return Since June

EL PASO CORP

EP

262600

18%

-6%

MOSAIC CO NEW

MOS

162552

NEW

-2%

CVR ENERGY INC

CVI

155106

-14%

5%

LYONDELLBASELL

LYB

154080

8%

-11%

CIT GROUP INC

CIT

132780

94%

-19%

NXP SEMICONDUCTORS

NXPI

126968

0%

-30%

SARA LEE CORP

SLE

126284

233%

-5%

SUNOCO INC

SUN

125130

40%

-12%

PALL CORP

PLL

118083

75%

-13%

MEAD JOHNSON NUTRITION

MJN

108080

78%

2%

HEALTH NET INC

HNT

89852

0%

-27%

SAFEWAY INC

SWY

87638

97%

-22%

FREEPORT-MCMORAN

FCX

87285

NEW

-11%

BARRICK GOLD CORP

ABX

83786

NEW

12%

WHIRLPOOL CORP

WHR

81320

75%

-22%

SWIFT TRANSN CO

SWFT

81300

161%

-33%

CABLEVISION SYS CORP

CVC

72420

NEW

-24%

BIG LOTS INC

BIG

66300

300%

-3%

EXPEDIA INC DEL

EXPE

52907

NEW

2%

LIBERTY MEDIA CORP NEW

LINTA

50310

-25%

-9%

EBAY INC

EBAY

48405

0%

-4%

ON SEMICONDUCTOR

ONNN

47488

NEW

-25%

FREESCALE SEMICONDUC

FSL

45221

NEW

-26%

SPDR GOLD TRUST

GLD

41610

27%

18%

BP PLC

BP

38425

NEW

-5%

POTASH CORP SASK INC

POT

34194

20%

-2%

WILLIAMS COS INC DEL

WMB

33275

-76%

-5%

XERIUM TECHNOLOGIES

XRM

31535

15%

-25%

SANDISK CORP

SNDK

30088

NEW

-8%

QUEST DIAGNOSTICS INC

DGX

23640

NEW

-17%

NEWELL RUBBERMAID INC

NWL

22881

NEW

-13%

CREXUS INVT CORP

CXS

22220

0%

-12%

During the second quarter, Loeb initiated brand new positions in MOS, FCX, ABX, CVC, EXPE, ONNN, FSL, BP, SNDK, DGX, and NWL. Only two of the new stocks had positive returns since June. ABX returned 12% and Expedia gained 2% since the end of June.

Mosaic is the largest new addition to Third Point’s 13F portfolio. During the second quarter, Loeb bought $162.5 million worth of MOS. Since the end of June, Mosaic has lost 2% but managed to beat the SPY by more than 6 percentage points. John Paulson, Richard Perry’s Perry Capital and David Tepper’s Appaloosa Management also added Mosaic to their portfolios during the second quarter.

Loeb purchased EP during the first quarter of 2011. In the second quarter, Loeb increased his holdings by 18%. It is Third Point’s largest holding as of June 30. Currently, Loeb owns $262.6 million worth of El Paso shares. Since the end of June, El Paso has lost 6% but outperformed the market. During the second quarter, Michael Price’s MFP Investors added El Paso to its 13F portfolio.

MJN gained 2% since the end of June. During the second quarter, Loeb increased MJN by 78%. He has been an investor in MJN for more than a year now. George Soros, the founder of Soros Fund Management, sold out MJN during the second quarter.

Loeb is one of our favorite hedge fund managers and we believe investors can beat the market in the long run by imitating Loeb’s top stock picks. We are closely watching MOS currently and may initiate a position in the stock.

Source: A Long List of Dan Loeb's Stock Picks