Billionaire investor Philip Falcone founded Harbinger Capital Partners in 2001. Falcone gained fame after making billions in 2007 by shorting subprime mortgages. Falcone leads Harbinger's investment team, which focuses on opportunities in credit, distressed debt, leveraged finance, and special situations across market cycles.
Below, we summarized Falcone’s portfolio activity and discussed his top positions, those he initiated or increased significantly during the third quarter. The analysis is based on Falcone’s 13F portfolio as of September 30, 2011.
Company Name | Ticker | Value | Activity |
SPECTRUM BRANDS | 659874 | -18% | |
HARBINGER GROUP | 595346 | 0% | |
CROSSTEX ENERGY | 94360 | 52% | |
NORTH AMERICAN ENERGY PTNRS INC | 40213 | 92% | |
E X C O RESOURCES INC | 28944 | New | |
CLIFFS NATURAL RES | 23027 | 0% | |
RESEARCH IN MOTION LTD | RIMM | 15225 | 150% |
WD 40 CO | 11952 | New | |
CALPINE CORP | 9516 | New | |
HUNTSMAN CORP | 7253 | New | |
GENON ENERGY INC | GEN | 5482 | 0% |
C V R ENERGY | 5285 | 67% | |
FOREST OIL CORP | 5179 | New | |
CONSTELLATION ENERGY | 4514 | 0% | |
PRESIDENTIAL LIFE CORP | 4487 | New | |
GENERAL MOLY INC | 4056 | 0% | |
LONE PINE RESOURCES | 2021 | New | |
OWENS CORNING | 613 | 0% | |
MEDIA GENERAL INC | 309 | 0% | |
SOLUTIA INC | 39 | 0% |
Falcone reduced the value of his portfolio from $1.98 billion at the end of June to $1.52 billion at the end of September. But he increased the number of positions in his portfolio from 15 to 20. During the third quarter, he bought some new positions and sold out two positions. One of these positions was Southern Union Co (SUG), in which he initiated a brand new $10 million position during the second quarter. Also, Falcone reported to own $2.2 million worth of Trina Solar Limited (TSL) at the end of June, but did not disclose owning any shares of TSL at the end of September.
The two largest positions in Falcone’s portfolio at the end of September were both consumer products companies - Spectrum Brands Holdings, Inc. (SPB) and Harbinger Group Inc. (HRG). The fund slightly decreased its holding of SPB by 18% during the second quarter, while maintaining the same holding of HRG for the third quarter as the second quarter. The fund had nearly $660 million invested in SPB and $600 million in HRG at the end of September. SPB gained 15.41% since the end of September, outperforming the market by 4%, while HRG lost 6.9% during the same period. D.E Shaw has a large holding of SPB. Israel Englander and Jim Simons are also bullish about Falcone’s HRG.
Falcone also opened a few new positions during the third quarter. For example. he initiated a brand new $29 million position in EXCO Resources Inc. (XCO), according to the latest 13F of the fund. XCO returned 14.79% since the end of September, outperforming the market by 2 percentage points. Ken Griffin and Bill Miller also initiated $14.8 million and $10.8 million positions in XCO.
Another new position that Falcone initiated during the third quarter was WD-40 Company (WDFC). He reported he owned nearly $12 million worth of the stock at the end of September. WDFC returned 12% since the end of September, which is close to the market return. Falcone also opened fresh positions in Calpine Corp (CPN), Huntsman Corp (HUN), Forest Oil Corp (FST), Presidential Life Corp (PLEF) and Lone Pine Resources (LPR).
Falcone is one of the largest holders of Research In Motion Limited (RIMM), and he increased his position by 150% during the third quarter. Falcone disclosed to own $15 million of RIMM at the end of September. Falcone also increased his stakes in Crosstex Energy Inc. (XTXI) by 52% to $94 million. However, the stock lost 16% since the end of September. Falcone also doubled his holdings of North American Energy Ptnrs Inc. (NOA) during the third quarter and had $40 million invested in NOA at the end of September. The stock returned 11.51% since the end of the third quarter, which is close to the market performance.
We like Falcone. We closely follow his wireless investments. If he can pull it off, he would make billions. We encourage investors to focus on the best stock picks of Phil Falcone. Our research has shown that investors will be able to beat the market in the long term by imitating the best stock picks of hedge fund managers like Falcone.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
