Dan Loeb's Third Point Starts Apple (AAPL) Stake: Top Positions & Latest Exposures

Dan Loeb's $4.6 billion Offshore Fund at Third Point finished February up 1% and is now up 4.9% for the year. As of the end of February, here are their top stakes:


Third Point's Top Positions

1. Yahoo! (YHOO)
2. Gold
3. Eksportfinans ASA
4. Delphi (DLPH)
5. Apple (AAPL)

Apple now makes an appearance in Loeb's top holdings and is the big takeaway here because the hedge fund did not own AAPL at the end of the year.

Third Point also revealed that one of their big winners in the month was the Medco Health (MHS) and Express Scripts (ESRX) arbitrage play. This is another new play that was not present in Third Point's portfolio at the end of the year. To read about this arbitrage play, check out a free excerpt from our newsletter as it's briefly discussed in the Omega Advisors section.


Latest Equity Exposure

In equities, Third Point is 53.2% long and -16.5% short, leaving them 36.7% net long. They've continued to ramp up their net long exposure as they were 28.2% net long just a month ago.

Their largest allocation continues to be in the technology sector at 16.2% net long (largely due to their activist position in Yahoo). Their next highest exposure is the consumer sector at 7% net long.

One of their losers in the past month was Marvell Technology (MRVL), a new stake they initiated in the fourth quarter. Apple (AAPL) was one of their big winners in the month as it ramped up right after they initiated a stake.


Credit Exposure

In credit, Loeb's firm is 18.7% net long (40% long and -21.3% short). This is up from 15.6% net long exposure in January. Their biggest net long allocation is in asset backed securities (ABS) at 14.3% net long and they continue to be net short government issues at -14.2%.

For some thoughts on their portfolio, head to Third Point's Q3 letter.

Nelson Peltz Sells Some H.J. Heinz (HNZ)

Trian Fund Management's Nelson Peltz has filed a slew of Form 4's with the SEC regarding his stake in H.J. Heinz (HNZ). Between February 24th and 28th, Peltz has sold 209,200 HNZ shares. He's reduced his position size by almost 20%.

The bulk of his share sales came at a price of $53.5713, though he also sold at $53.0968 just three days ago. HNZ currently trades around that level, at $52.98. As of February 28th, Peltz now owns 837,884 shares of Heinz.

Per Google Finance, Heinz "together with its subsidiaries is engaged in manufacturing and marketing a range of food products throughout the world. The Company’s principal products include ketchup, condiments and sauces, frozen food, soups, beans and pasta meals, infant nutrition and other food products. The Company’s products are manufactured and packaged to provide safe, wholesome foods for consumers, as well as foodservice and institutional customers."

Warren Buffett's Annual Letter 2011: Key Takeaways

If you haven't seen it already, Warren Buffett is out with his 2011 annual letter to Berkshire Hathaway shareholders. Here are some key takeaways:


- Succession: Buffett puts the succession talk (somewhat) to rest as the company has identified a successor at CEO. They also have two backup candidates as well. The problem is, people will take issue with the fact that the identities still haven't been revealed.

So, when Buffett does finally decide to step down from Berkshire (or when he passes on, because he could certainly work there until the day he dies), the company will be able to transition to the next era. The question now becomes, how much "Buffett premium" is in the stock?

We've also long detailed how Buffett has chosen two new investment manager successors as well. He hired Todd Combs from hedge fund Castle Point Capital and Ted Weschler from hedge fund Peninsula Capital Advisors.


- Buybacks: The Oracle of Omaha clearly thinks his company's stock is undervalued and is anxious to buy back Berkshire Hathaway shares as high as 1.1x book value, which would be around $110,000 on the A shares (BRK.A) as of year-end. Shares currently only trade around 7% higher at $117,755.


- Acquisitions: The two most recent major acquisitions for Berkshire Hathaway, Lubrizol and Burlington Northern Santa Fe, have delivered record operating earnings. So yet again, Buffett has made some prescient buys.

It's also not out of the question that Buffett could possibly make some additional acquisitions in the near future. After all, his Berkshire businesses are throwing off around $1 billion per month as a whole that he could use. While he doesn't specifically mention anything in the letter, it seems like an obvious possibility. As to where he might look, we've detailed in the past how Buffett likes businesses with pricing power (Lubrizol).


Embedded below is what value investors have deemed a must read every year: Warren Buffett's annual letter to Berkshire Hathaway shareholders (you can download a .pdf copy here):




For more resources from one of the greatest investors ever, check out:

- Warren Buffett's recommended reading list

- Top 25 Warren Buffett quotes

- A compilation of Buffett's partnership letters

- Buffett's worst trade