Dan Loeb's Third Point November Exposure Report

Dan Loeb's Third Point Offshore Fund is out with its latest exposure report for November.  They finished the month up 2.9% and sit up 17% year-to-date and manage $10 billion.


Exposure Levels

Loeb's firm reduced net long equity exposure by a noticeable amount.  They went from 44% net long in October down to 38% net long at the end of November.  Their largest sector exposure continues to be tech, media & telecom (primarily due to their large stake in Yahoo).

In credit, Third Point is 27.7% net long, a 1% increase from the month prior.


Third Point's Top Positions

1. Yahoo! (YHOO)
2. Greek Government Bonds
3. American International Group (AIG)
4. Gold
5. Murphy Oil (MUR)

Their top holdings as a group remain unchanged this month, though their GGB and AIG stakes flipped position ranks.


Top Winners & Losers

Third Point's top winners included Greek Government bonds, Yahoo, Delphi (DLPH), Aveta, and Ally Financial (multiple securities held).  Their top losers included AIG, Short A, Short B, Apple (AAPL), and Liberty Global (LBTYA).

Embedded below is Third Point's November exposure report:




Overall, not too many notable changes in Loeb's portfolio aside from the reduction in net long equity exposure.  Head to Third Point's Q3 letter for more color on their positions.

Dan Loeb's Third Point Buys Kraft, Various Healthcare Plays: July Exposure Report

Just yesterday we posted up Dan Loeb & Third Point's Q2 letter and now we have some more portfolio metrics in the form of their latest monthly exposure report.  In July, Third Point Offshore was up 1.6% and is up 5.5% for the year.

Here are a few new takeaways from their latest exposure report:


- Long Kraft (KFT): The biggest news is that Third Point has disclosed a new position in Kraft Foods (KFT) and it is now their fifth largest position.  The company of course will be splitting into two: a North American grocery business and an emerging snacks business.

Although Pershing Square Capital no longer owns KFT shares, you can see Ackman's presentation on Kraft from a few years ago.  Third Point is most likely playing the spin-off, though.  Nelson Peltz's Trian Fund has also been a large owner of KFT.


- Long Healthcare Plays: Loeb's hedge fund also appears to have started new positions in UnitedHealth Group (UNH), Humana (HUM), Wellpoint (WLP), and Cigna (CI).  All of these names were 'top losers' for the fund during the month.  This is worth highlighting because it is the first time these stakes have been disclosed.  We recently flagged why David Einhorn likes Cigna as he recently bought the name as well.


- Third Point is net long the Americas by 70%, but net short EMEA by -4% and net short Asia by -10%.


- In equities, Loeb's firm is 35.4% net long (67.6% long and -32.2% short).  This marks a decent increase from June, where they were net long 27.3%.  Their largest net long sector exposure comes in technology, media & telecom (largely due to sizable Yahoo and Apple stakes).


- Their credit exposure remains somewhat unchanged from last month at 29.3% net long (37.8% long and -8.5% short).  Their largest exposure there continues to be asset backed securities.


Third Point's Top 5 Positions as of the end of July:

1. Yahoo! (YHOO)
2. Gold
3. Apple (AAPL)
4. Delphi (DLPH)
5. Kraft Foods (KFT)


Third Point's just-released Q2 letter details why Dan Loeb still owns Delphi, among other position updates.  We've also flagged how Loeb recently added to his Yahoo stake.

Why Dan Loeb Still Owns Delphi: Third Point's Q2 Letter

Dan Loeb's hedge fund firm Third Point is out with its second quarter letter to investors.  In it, they talk about why they still own Delphi (DLPH), as well as touch on numerous other positions.

Loeb writes, "In July, we increased our net equity exposure, initiated several new positions, and added to some existing names."  We revealed that Third Point bought new positions in News Corp and Chesapeake Energy in June.  We also recently highlighted how Loeb has also added to his Yahoo stake.

One of the new names they took a position in is the European IG bond index iTraxx.  The letter also details their position in Progress Energy Resources (PRQ).


Why Third Point Still Owns Delphi (DLPH)

The most interesting part of Third Point's letter is the detail of why they still own Delphi.  They originally purchased the company's DIP loan facility in June 2009 and continue to hold after the company has completed its initial public offering.

Third Point writes,

"In our view, Delphi is a best-in-class supplier which still trades at the valuation of more commoditized and disadvantaged comparable companies.  Delphi has premium business lines, an excellent geographic customer base, no need for further deleveraging, virtually no North American unionized labor, and significantly smaller pension liabilities than almost all of its peers.  Using multiples closer to the upper quartile of suppliers - where we feel Delphi belongs and is headed - Delphi's stock should be worth between $35-$40 per share, or a 30-40% upside from current levels."

The list of large owners of Delphi stock is littered with prominent hedge funds (as of the end of the first quarter): Paulson & Co, Elliott Management, SIlver Point Capital, Oaktree Capital, Centerbridge Partners, Greenlight Capital, Perry Capital, Senator Investment Group, Owl Creek Asset Management, Monarch Alternative Capital, and many more.

Third Point highlights this ownership base in their letter and identifies it as one of the "biggest concern(s)" for Delphi owners.  They foresee a diversification of a currently concentrated shareholder base which will reduced volatility.

Also worth highlighting is the fact that numerous directors of Delphi have sold shares recently, combining for over $5.46 million in sales.

Third Point continues, saying:

"We expect Delphi to expedite its multiple expansion by returning a significant portion of its free cash flow - about 25% of the current market cap by year end 2013 - to shareholders through continued share repurchases and the initiation of a quarterly dividend."


Embedded below is Third Point's Q2 letter to investors:




For more on this hedge fund's portfolio, head to Third Point's latest exposure report.

And to read more hedge fund letters, check out the latest from David Einhorn's Greenlight Capital.

Third Point Starts Chesapeake Energy & News Corp Stakes: June Exposure Report

Dan Loeb's Third Point Offshore Fund finished June up 0.2% and is up 3.9% for the year.  The big takeaway from their June exposure report is a large new holding in Chesapeake Energy (CHK).


Third Point's Top Positions

1. Yahoo!
2. Gold
3. Delphi
4. Chesapeake Energy
5. Apple

This is the first time Chesapeake has appeared under their top holdings' column.  They did not disclose a position back in the first quarter.  Mason Hawkins' Southeastern Asset Management has a 13.9% activist stake in the company as well.

Noted activist investor Carl Icahn has also taken over a 7% ownership stake in CHK and sees it as an undervalued company.  Icahn argues that they can turnaround the story "if you clean this company up ... and natural gas prices go higher, which I think they will."

We've also posted up Third Point's Q1 letter which details their thesis on Apple and other positions.

Top winners from the quarter include Yahoo, Gold, as well as News Corp, Portugal Obrigacoes do Tesouro and Progress Energy (multiple securities held), the last three of which are newly disclosed positions as well.

News Corp recently announced that it would be splitting into two: an entertainment business (FOX properties) and a newspaper/publishing business (Wall Street Journal, book publishing etc).  This is obviously an event-driven trade for the hedge fund with a catalyst that shareholders and management hope unlocks value.

Third Point's top losers from the second quarter included Delphi, Sara Lee (which completed its spin-off), two healthcare shorts and an ABS short.


Third Point's Latest Exposure Levels

In equities, they are now net long 27.3% (50.2% long, -22.9% short).  This is a slight decrease in net exposure from last month.  Their largest sector exposure comes in technology, media & telecom (largely due to their YHOO stake) at 16.9% net long.  Geographically, they are net long the Americas 65%, net short EMEA -11% and net short Asia -4%.

In credit, Loeb's fund is net long to the tune of 29.8% (long 38.5%, short -8.7%).  This is a decisive increase from the month prior where they were only net long by 14.2%.


Dan Loeb is featured in the new book The Alpha Masters and you can check out our review here.

John Paulson Sells More Delphi Automotive (DLPH)

John Paulson's hedge fund firm Paulson & Co just filed a 13G with the SEC regarding their position in Delphi (DLPH).  Per the 13G, the firm has reported a 9.98% ownership stake in DLPH with 32,764,336 shares.

This marks a decrease in their position size by 28% since the end of March.  We've highlighted before how Paulson has been selling Delphi.  The most recent disclosures were made due to portfolio activity on June 7th.

John Paulson is profiled and interviewed (along with many other top fund managers) in the new book The Alpha Masters.

Per Google Finance, Delphi is "a global vehicle components manufacturer and provides electrical and electronic, powertrain, safety and thermal technology solutions to the global automotive and commercial vehicle markets. The Company operates through four segments: Electrical / Electronic Architecture; Powertrain Systems; Electronics and Safety and Thermal Systems."

For more from this manager, we've also highlighted Paulson's three long ideas from the Ira Sohn Conference.

Third Point's Top Holdings & Latest Exposures

Dan Loeb's Third Point Offshore Fund finished May -2.6% and was up 3.7% year-to-date at that time.  The fund now manages $4.6 billion and has seen annualized returns of 17.1%.  Below are their top positions and latest exposures.


Third Point's Top Holdings

1. Yahoo! (YHOO)
2. Gold
3. Delphi (DLPH)
4. Apple (AAPL)
5. Sara Lee (SLE)

The hedge fund's top winners from the past month included three consumer short positions, one industrial short position, as well as a long of Vertex Pharmaceuticals.  Their top losers in the quarter included gold, YHOO, DLPH, Hess (HES), as well as Abercrombie & Fitch (ANF).

We've previously posted Third Point's Q1 letter which includes their thesis on AAPL among other positions.

Their stake in Sara Lee slides into their top holdings again as this catalyst play will spin-off its coffee business at the end of June and then will  rename its remaining business Hillshire Brands to reflect its line of meat products.

In other recent activity from this hedge fund, we've highlighted that Third Point reduced its Technicolor stake as well.


Latest Exposure Levels

We've noted that throughout the first half of the year, Third Point ratcheted up net long exposure as they liked the risk/reward skew.  However, given the ramp in volatility this past month, it should come as no surprise that Third Point reduced exposure.

At the end of May, they were 31.4% net long equities (44.4% long and -13% short).  This compares to 40% net long the month prior.  During the month, they cut long exposure and increased short exposure.

Geographically, they are net long Americas at 61%, net short EMEA at -10%, and net short Asia at -3%.

They also decreased their exposure to credit.  In April they were 20.7% net long and at the end of May they were only 14.2% net long.  Of note is the fact that they increased their short bet against government securities.


Dan Loeb is featured in the new book The Alpha Masters and you can check out our review here.

Goldman Sachs VIP List: Most Important Stocks To Hedge Funds: Q1 2012

Goldman Sachs is out with its Q1 2012 Hedge Fund Trend Monitor report.  In it, they reveal the latest VIP list of 50 stocks that are most important to hedge funds.  These are the positions that appear most frequently in the top 10 holdings of fundamental focused hedge funds.

This quarter, they've also released a new list of very important short positions to hedge funds which we've posted up as well.

Goldman's VIP list of the most important holdings is accessible on Bloomberg via < GSTHHVIP >.  It has "outperformed the S&P 500 by 55 bp on a quarterly basis since 2001."

Goldman Sachs VIP List (Q1 2012)

Stock: Number of funds with stock as top 10 holding

1. Apple (AAPL): 106
2. Google (GOOG): 73
3. Express Scripts (ESRX): 56
4. Microsoft (MSFT): 46
5. Qualcomm (QCOM): 38
6. Citigroup (C): 31
7. General Motors (GM): 29
8. Priceline.com (PCLN): 29
9. JPMorgan Chase (JPM): 27
10. Liberty Media (LMCA): 26
11. Delphi Automotive (DLPH): 24
12. BP (BP): 23
13. Pfizer (PFE): 23
14. Tyco (TYC): 22
15. Visa (V): 21
16. Yahoo (YHOO): 21
17. LyondellBasell (LYB): 20
18. Anadarko Petroleum (APC): 19
19. Bank of America (BAC): 17
20. Ford Motor (F): 17
21. WellPoint (WLP): 17
22. American International Group (AIG): 16
23. Charter Communications (CHTR): 16
24. eBay (EBAY): 16
25. Rock-Tenn (RKT): 16


It's no surprise that Apple (AAPL) is the most widely owned top position amongst fundamental hedge funds.  But despite that, Greenlight Capital's David Einhorn argued hedge funds actually have less than 2% of assets in his Ira Sohn conference presentation.  We've also posted Dan Loeb's thesis on AAPL as he was a big buyer of shares.

Both Tyco and Priceline were featured in the equity analysis section of our Q4 2011 Hedge Fund Wisdom newsletter due to heavy ownership by top funds.  TYC is an event-driven play while PCLN is a huge growth and international play.


Here's the rest of Goldman's VIP list:

26. Seagate Technology (STX): 16
27. Berkshire Hathaway (BRK.B): 15
28. Cisco Systems (CSCO): 15
29. Equinix (EQIX): 15
30. Hertz Global (HTZ): 15
31. Liberty Interactive (LINTA): 15
32. Pioneer Natural Resources (PXD): 15
33. Visteon (VC): 15
34. Valeant Pharmaceuticals (VRX): 15
35. Wells Fargo (WFC): 15
36. Baidu (BIDU): 14
37. Dollar Thrifty (DTG): 14
38. Hess (HES): 14
39. Mastercard (MA): 14
40. News Corp (NWSA): 14
41. Williams Companies (WMB): 14
42. Barrick Gold (ABX): 13
43. CIT Group (CIT): 13
44. Capital One (COF): 13
45. Calpine (CPN): 13
46. Devon Energy (DVN): 13
47. EMC (EMC): 13
48. Hewlett Packard (HPQ): 13
49. Illumina (ILMN): 13
50. Salesforce.com (CRM): 12

Of the above, we've previously highlighted why Passport Capital likes LINTA.  And in the brand new issue of our Hedge Fund Wisdom newsletter, we've analyzed Equinix (EQIX), a big new position by Philippe Laffont's Coatue Management and John Thaler's JAT Capital.

Some of the stocks on the list are brand new additions as enough hedge funds boosted their positions in Q1: ABX, AIG, BRK.B, COF, CPN, CRM, DVN, EBAY, EMC, EQIX, F, HES, HTZ, ILMN, RKT, WLP.


Be sure to also check out Goldman's brand new list of hedge fund very important short positions.

Dan Loeb's Third Point: Top Positions & Latest Exposures

For the month of April, Third Point's Offshore Fund was -0.1% and is up 6.4% year to date.  Dan Loeb's hedge fund has seen an annualized return of 17.4% and their latest exposure report breaks down where they're allocating their capital.

Equity Exposure

On the equity side of things, Third Point is 51.5% long and -11.5% short, leaving them 40% net long.  This is a 1.5% increase in net long exposure since the month prior, but is mainly attributed to the fact that they reduced their short book (they actually reduced their longs compared to last month).

Their largest allocation comes with an 18.9% net long position in the technology sector (largely due to their activist position in Yahoo and big Apple position).  They are ever-so-slightly net short utilities.


Credit Exposure

In credit, they continue to be short government issues to the tune of -11.7%.  Their largest net long exposure is in asset backed securities at 14.6%.  In total, their credit exposure is 40.9% long, -20.2% short, leaving them 20.7% net long.  This is a 2.2% increase in overall net long exposure since the month prior.


Top Positions

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

Comparing their April top holdings to the month prior, their top three stakes are unchanged.  Apple has jumped back up into their top holdings as they either added to their position or their stakes in other top holdings decreased in value.

In the month, their top winners included Yahoo, Portuguese Sovereign Bonds, Volkswagen, Lehman Brothers, and Ally Financial. Much of their positive performance offset in the quarter came from the credit side of things.  We previously posted Loeb's comments at a distressed investing panel.

Their top losers included Ivanhoe Mines (IVN), Consumer Short A, Redecard SA, Technicolor (multiple securities owned), and Metro AG.  This is notable because this is the first time we've seen their positions in Redecard SA and Metro AG disclosed.

For more on this hedge fund, head to lessons Dan Loeb's learned as an investor.

John Paulson Sells More Delphi Automotive (DLPH)

John Paulson's group of hedge funds at Paulson & Co just filed a Form 4 with the SEC regarding its position in Delphi Automotive (DLPH). We previously highlighted how Paulson was selling DLPH and he's at it again.

Per the filing, Paulson & Co was out selling DLPH shares on April 16th through 18th. In total, all their various entities sold just over 3 million shares.

As a reference point, the fine print says that Paulson's Enhanced Ltd owns 11.6 million shares, Recovery Master owns 3.3 million, Enhanced LP owns 2.9 million, International owns 3.9 million, Advantage Master owns 877,223 shares, Advantage Plus Master owns 1.4 million, and Paulson Partners owns just over 1 million shares.

In other recent portfolio activity, we've pointed out that Paulson keeps buying NovaGold Resources.

Dan Loeb Likes Portuguese Sovereign Debt: Latest Exposure & Positioning

Dan Loeb's Third Point Offshore Fund was up 1.5% for March and is up 6.5% for 2012. In the hedge fund's latest March exposure report, we see that Dan Loeb likes Portuguese Sovereign Debt, a position that had previously not been revealed.

Just last week we highlighted Loeb's comments at a distressed investing panel at Columbia Business School where he briefly mentioned he liked Portugal.

In March, that sovereign bond position was one of his top winners, along with Yahoo (YHOO), Family Dollar (FDO), Aveta, and Apple (AAPL). Loeb also recently engaged in a proxy fight with Yahoo and launched a website to raise investor awareness.


Third Point's Top Positions

1. Yahoo (YHOO)
2. Gold
3. Delphi
4. Eksportfinans ASA
5. Ally Financial

The fund's top holdings continue to be of distressed origination. Some of Third Point's losers from the month include: Barrick Gold (ABX), Genel Energy (LON:GENL), Gold, Volkswagen, and Ivanhoe Mines (IVN).


Latest Exposure Levels

Loeb's firm continues to enter 'risk on' mode as they are 38.5% net long equities (54.2% long, -15.7% short). This is slightly up from February's 36.7% net long exposure and way up from January when they were only net long 28.2%.

Their largest sector exposure continues to be technology via their activist YHOO stake. They are ever-so-slightly net short utilities.

In credit, Third Point is net long distressed by 7.6%, net long performing at 8.7%, net long asset backed securities at 14.5% and net short government at -13%. In total, they are 17.8% net long credit.

To read the investment theses behind some of their positions, head to Third Point's investor letter.

For more from Third Point's founder, head to lessons Dan Loeb has learned as an investor, our most popular post this year.

Paulson & Co Sells Some Delphi (DLPH)

John Paulson's investment firm Paulson & Co recently filed a Form 4 with the SEC disclosing that they had sold over 1.1 million shares of Delphi (DLPH) at a price of $31.96 on March 5th.

Despite these sales, Paulson still owns a lot of DLPH. Their Credit Master fund owns 19.2 million shares as the company emerged from bankruptcy and became publicly traded again.

Their Recovery Fund also owns over 3.3 million shares while their Advantage Master fund owns 877k shares and their Advantage Plus Master fund owns 1.4 million shares.

Prior to its IPO, Delphi was owned by many hedge funds we track. During the IPO process, it was reported that Paulson would be selling about 20 million shares of its stake. Delphi continues to be one of Dan Loeb's biggest holdings.

Per Google Finance, Delphi is "is a global vehicle components manufacturer and provides electrical and electronic, powertrain, safety and thermal technology solutions to the global automotive and commercial vehicle markets. It is a vehicle component manufacturer, and its customers include the 25 automotive original equipment manufacturers (OEMs) in the world."


Paulson on Their Delphi Stake

In a letter to investors, Paulson & Co talked about their Delphi stake:

"Delphi, the largest U.S.-based automotive parts supplier, emerged from bankruptcy in late 2009. We believe bankruptcy reorganization transformed this previously troubled manufacturer into one of the auto parts industry's most efficient companies. In bankruptcy, many of the firm's liabilities were eliminated and its cost structure was drastically reduced, which we believe will likely lead to higher profits and a higher valuation.

Upon emergence from bankruptcy, Delphi's defaulted secured debt was exchanged for privately traded partnership units. The partnership units initially traded at $5000 per unit, had minimal analyst coverage, and required signing a confidentiality agreement to receive financial information. As the security was unlisted, illiquid, and complicated, it was little understood by the market and traded at a wide discount to Delphi's public equity comparables.

Delphi completed its IPO on November 17th, 2011. Paulson sold ~20M shares across our funds for $22 per share, yielding total proceeds of $453 million. We remain the largest shareholder in the company and believe that Delphi is taking the correct steps to remove its valuation discount to peers, including participation at the Detroit Auto Show, and initiating discussions with sell-side research."


Check out more activity from the hedgie: Paulson's presentation on Hartford Financial Services Group (HIG) as well as the catalyst for NovaGold (NG) shares.

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.

Dan Loeb's Third Point: Top Holdings & Latest Exposures

Dan Loeb's hedge fund firm Third Point LLC returned 3.8% in January to start off 2012. Their offshore fund currently manages $4.59 billion and has seen an annualized return of 17.5%.

Third Point's Top Holdings (as of 1/31/12)

1. Yahoo! (YHOO)
2. Gold
3. Eksportfinans ASA
4. Delphi Corp (DLPH)
5. Ally Financial

There are some notable changes to the upper echelon of this hedge fund's portfolio since we last looked. Eksportfinans ASA has emerged as a meaningful position and Ally Financial (the former GMAC entity) has entered their top 5 stakes. Gold and Yahoo remain top holdings and you can see Third Point's bull case for YHOO here.

One former top holding now notably absent from their top positions list is Sara Lee (SLE). While one could assume they still own it given their 'attractive assets' thesis, it's hard to say if they reduced exposure to the name or if they merely added to other positions.

Also worth highlighting: They've held a stake in Delphi post bankruptcy and the company began trading again in the fourth quarter of 2011 with numerous prominent hedge funds as owners. However, one notable holder (Paulson & Co) has apparently reduced its position size substantially.

In terms of attribution, Third Point saw gains from their stakes in Delphi, gold, UniCredit Spa, Technicolor, and Eksportfinans. They lost money last month from positions in Yahoo, and four undisclosed short positions (2 consumer shorts, 1 communications short, and 1 healthcare short).


Third Point's Net Exposure

After spending much of last year with low net exposure to equities (as low as 15% net long), Third Point has slightly ramped exposure back up. They are now 44.8% long and -16.6% short, leaving them 28.2% net long equities. Their largest exposure comes via technology where they are 12.6% net long (most of which is their activist stake in Yahoo).

In credit, Third Point is 15.6% net long the asset class via 9.6% net long exposure to distressed, 8.7% net long exposure to performing, 14.5% net long exposure to asset backed securities (ABS) and -17.2% net short government securities.

Geographically speaking, Loeb's hedge fund is 58% net long the Americas, -4% net short EMEA, and -3% net short Asia.

For thoughts on their portfolio, head to Third Point's Q3 letter. We'll be sure to post up their Q4 letter when it is released.