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 | 162552 | NEW | -2% | |
CVR ENERGY INC | CVI | 155106 | -14% | 5% |
LYONDELLBASELL | 154080 | 8% | -11% | |
CIT GROUP INC | 132780 | 94% | -19% | |
NXP SEMICONDUCTORS | 126968 | 0% | -30% | |
SARA LEE CORP | SLE | 126284 | 233% | -5% |
SUNOCO INC | 125130 | 40% | -12% | |
PALL CORP | 118083 | 75% | -13% | |
MEAD JOHNSON NUTRITION | 108080 | 78% | 2% | |
HEALTH NET INC | 89852 | 0% | -27% | |
SAFEWAY INC | 87638 | 97% | -22% | |
FREEPORT-MCMORAN | 87285 | NEW | -11% | |
BARRICK GOLD CORP | 83786 | NEW | 12% | |
WHIRLPOOL CORP | 81320 | 75% | -22% | |
SWIFT TRANSN CO | 81300 | 161% | -33% | |
CABLEVISION SYS CORP | 72420 | NEW | -24% | |
BIG LOTS INC | 66300 | 300% | -3% | |
EXPEDIA INC DEL | 52907 | NEW | 2% | |
LIBERTY MEDIA CORP NEW | LINTA | 50310 | -25% | -9% |
EBAY INC | 48405 | 0% | -4% | |
ON SEMICONDUCTOR | 47488 | NEW | -25% | |
FREESCALE SEMICONDUC | 45221 | NEW | -26% | |
SPDR GOLD TRUST | 41610 | 27% | 18% | |
BP PLC | 38425 | NEW | -5% | |
POTASH CORP SASK INC | 34194 | 20% | -2% | |
WILLIAMS COS INC DEL | WMB | 33275 | -76% | -5% |
XERIUM TECHNOLOGIES | 31535 | 15% | -25% | |
SANDISK CORP | 30088 | NEW | -8% | |
QUEST DIAGNOSTICS INC | 23640 | NEW | -17% | |
NEWELL RUBBERMAID INC | 22881 | NEW | -13% | |
CREXUS INVT CORP | 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.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MOS over the next 72 hours.
