Third Point's Q1 Letter: Thesis on Honeywell, UniCredit, E.On ~ market folly

Friday, April 28, 2017

Third Point's Q1 Letter: Thesis on Honeywell, UniCredit, E.On

Dan Loeb's hedge fund firm Third Point returned 5.9% in the first quarter of 2017.  Their Q1 letter to investors was just released and outlines their thesis on stocks such as Honeywell (HON), UniCredit, and E.On.

Honeywell (HON)

Basically, they're looking for the company to spin-off its aerospace division.  They think this "would result in a sustained increase in shareholder value in excess of $20 billion.  Spinning off Aerospace would transform Honeywell into an industrial growth company with a focus on automation and productivity."


Third Point sees the first quarter as a 'turning point' for European financials as they've traded at lower valuations and UniCredit recently raised 13 billion Euros in capital in March.  They write, "We were drawn to UniCredit by its low valuation and the rights issue.  We believe in the medium-term story because of its new CEO, Jean Pierre Mustier."


"Following a spin-off of its generation assets into Uniper last year, the company has emerged as a regulated grids and renewables business that is currently misunderstood by the market and attractively priced."

To see the full thesis on all of these names, check out the full letter. 

Embedded below is Third Point's first quarter letter:

You can download a .pdf copy here.

You can also view other recent portfolio activity here.

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