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Dan Loeb, founder of Third Point LLC, is a pioneer in activist investing. Loeb is a very outspoken investor. He has written public letters to express disapproval of the performance and conduct of other financial executives. Under his leadership, the flagship fund of the New York based Third Point LLC returned 41.7% in 2010. From 2005 to 2007, Loeb made $150 million, $200 million and $270 million respectively in each year. Third Point’s Offshore did better than most long/short equity hedge funds in 2011 as well.

In this article, we are going to take a look at the stocks that Loeb is no longer bullish about. Below is a list of top 10 positions that Third Point sold out during the third quarter.

Company Name

Ticker

Value

LYONDELLBASELL INDUSTRIES

LYB

154080

C I T GROUP INC NEW

CIT

132780

N X P SEMICONDUCTORS N V

NXPI

126968

PALL CORP

PLL

118083

HEALTH NET INC

HNT

89852

SAFEWAY INC

SWY

87638

FREEPORT MCMORAN

FCX

87285

WHIRLPOOL CORP

WHR

81320

SWIFT TRANSPORTATION

SWFT

81300

CABLEVISION SYSTEMS

CVC

72420

The biggest position sold out by Third Point during the third quarter is LyondellBasell Industries NV, a Netherlands-based chemical company. At the end of June, Third Point had $154 million invested in LYB. At the end of September, Third Point did not report to own any shares of the stock. Since the end of the third quarter, LYB returned 64.88%, versus 13.57% for SPY in the same period. In addition to Third Point, Paul Tudor Jones Tudor Investment Corp and 17 other hedge funds also sold out their stakes in LYB in the third quarter.

The stock with the biggest market capitalization among the list above is Freeport McMoRan Copper & Gold Inc. It has a market cap of $37.76B and a P/E ratio of 6.96. Third Point sold out its $87 million worth of FCX shares during the third quarter. The stock returned 31.71% so far since the end of September. George Soros is also no longer bullish about FCX. Soros Fund Management also sold out its FCX stake over the third quarter.

Most of the big positions sold out by Loeb outperformed the market since the end of the third quarter. On the other hand, Whirlpool Corp and Cablevision Systems Corp suffered losses in that period. WHR was down 0.95% and CVC lost 4.17% since the end of September. The rest generated double-digit returns since September 30, 2011. We like Loeb and his activist investing style a lot. We think investors should be cautious about the positions he sold out recently. We recommend investors to analyze these stocks carefully before purchasing them.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 10 Big Sells By Hedge Fund Star Dan Loeb