Top 10 Stocks That Matter Most To Hedge Funds Per Goldman Sachs (Q4 2016)

Goldman Sachs' quarterly hedge fund trend monitor outlines what stocks matter most to hedge funds.  Here's the list as the fourth quarter 2016:


Top 10 Stocks That Matter Most To Hedge Funds: Q4 2016

- Alphabet (GOOGL / GOOG)

- Facebook (FB)

- Amazon.com (AMZN)

- Bank of America (BAC)

- Charter Communications (CHTR)

- Apple (AAPL)

- Microsoft (MSFT)

- Yahoo (YHOO)

- Time Warner (TWX)

- NXP Semiconductor (NXPI)


As you can see, it's quite tech-heavy.   The major exception is Bank of America (BAC), which was a consensus buy in Q4 among hedge funds we track in our newsletter.

For more on what stocks hedge funds have been buying & selling, check out the brand new issue of our premium newsletter that reveals the portfolios of 25 top funds.

What We're Reading ~ 8/3/16

Ego is the enemy [Ryan Holiday]

Is active management dead? Not even close [CFA Institute]

When is a 'value' company not a value? [Investing Research]

Interview with Time Warner CEO Jeff Bewkes [Bloomberg]

On Tiger Global's bet on Flipkart [LiveMint]

Amazon's ascent in India shows that price isn't everything [Nikkei]

On capital light compounders [Base Hit Investing]

Why is the stock market so high? Ask the bond market [NYTimes]

US homeownership rate falls to five-decade low [WSJ]

How China became the world's e-commerce king [TheDrum]

Didi schools Uber on doing business in cutthroat China [Bloomberg]

Uber finds passage to India blocked by Ola [Bloomberg]

What happened to Yahoo? [Waiters Pad]

Google plots cheaper wireless future to expand fiber project [Bloomberg]

Here comes 5G wireless, but first a reality check [Recode]

Big US brokerages chase the rich [Reuters]

App coins and the dawn of the decentralized business model [Medium]

How free mobile games are designed to make money [Vox]

Bo Bortemark's Sohn London Presentation: Short Lafargeholcim, Long Sprouts & Yahoo

We're posting up notes from the Sohn London Investment Conference 2015.  Next up is Bo Börtemark of Carve Capital who pitched a short of Larfargeholcim and two long ideas: Sprouts Farmers Market and Yahoo.


Bo Börtemark's Sohn London Presentation 2015

Carve Capital is a long/ short equity and credit hedge fund manager that approaches equity from a bottom-up perspective.

Short Lafargeholcim.  China used more cement in the last three years than the US did in the whole Twentieth Century.  Now there is over capacity in China and the rest of the world. China is trying to export its excess capacity. China will increasingly seek to export cement to the countries where the price of cement is highest. These are the same markets that Lafargeholcim is in.


Long Sprout Farmers Market (NAS: SFM). The natural and organic food market is expected to grow in the US.


Long Yahoo (NAS: YHOO).  The core operation is valued at zero by the market. Investors have stopped believing and have given up.


Be sure to check out the rest of the Sohn London Conference presentations.

What We're Reading ~ Analytical Links 3/4/15

12 things learned about investing from Howard Marks [25iq]

Feeling certain and other mistakes that trip up investors [WSJ]

What mistakes investors make and what they learned from it [EndlessriseInvestor]

Why don't we make good investment decisions? [Irrelevant Investor]

Warren Buffett on his early mistakes [Business Insider]

A look at Constellation Software [Value Venture]

A pitch on Cable and Wireless Communications [Scribd]

When will the US have its next recession? [Wealth of Common Sense]

Yahoo's incredible shrinking profitability in its core business [Forbes]

Altice's savvy playbook fuels rapid growth [FT]

Netflix and Google's plan to break out of Equinix's gilded cages [Data Center Knowledge]

Viewers don't add up to profit for YouTube [WSJ]

Is innovation more about people or process? [HBR]

What We're Reading ~ Analytical Links 2/25/15

An interview with The Outsiders author William Thorndike [Joe Magyer]

The extraordinary story of America's most successful industry [Morgan Housel]

Howard Marks: have an approach and hold it strongly [Reformed Broker]

Observations from a decade in the investment business [Wealth of Common Sense]

What is Yahoo worth after the Alibaba spinoff? [MicroFundy]

A look at CDK Global [Scuttlebutt Investor]

The problem with intuitive investing [Wealth of Common Sense]

Profile of SC Fundamental: old school investors [Barrons]

Calculating the odds of a Comcast / Time Warner Cable deal [NYTimes]

The high cost of falling prices [Economist]

Robert Shiller's CAPE ratio recently passed its 2007 high [Twitter]

Americans are borrowing more [WSJ]

Russia's Yandex takes on Google, Android [Barrons]

Millennials ditching their TV sets at a record rate [NYpost]

Capitalism's unlikely heroes: activist investors [Economist]

Profile of one of the most important people at Apple: Jonathan Ive [New Yorker]

Amazon bought this man's company, now he's coming for them [Bloomberg]

Netflix's long-term view [Netflix]

Jeff Smith Long Yahoo & MeadWestvaco at Capitalize For Kids Sohn Canada Conference

We're posting up notes from the Capitalize For Kids Sohn Canada conference that just took place.  Next up is Jeff Smith of Starboard Value who talked about various investments including Darden, Yahoo, and MeadWestvaco.


Jeff Smith's Sohn Canada Presentation

Spoke about being in the news with the recent Darden Restaurants (DRI) battle. Mentioned they did not want management to sell Red Lobster, and they did.

Next talked about about Yahoo (YHOO). Many shareholders called him, as they are frustrated with lots of clear unlocked value. With a ~$40 B market cap, Alibaba stake is worth $35B, Yahoo Japan stake worth $7.5B, cash on hand at $7.5B and finally the core business of $5.5B. Full value of $62B, much higher than the current value. Opportunity exists given that they will need to pay taxes to exit Alibaba stake. Management is working hard to find a tax structure that is efficient. Mentioned they are currently in a black-out period and will have more details once this period ends. Price target $63 within 12 months (50% upside).

Next, pitched LONG MeadWestvaco Corp (MWV). which is a consolidated packaging company. They are looking to spin off the Specialty Chemical business and the Real Estate piece, both non-core businesses. Plans to reduce overhead and explore alternatives to unlock value of pension assets

Be sure to check out the rest of the presentations from Capitalize For Kids Sohn Canada here.

What We're Reading ~ Analytical Links 9/24/14

The fulcrum security: what it is and why it matters [Third Avenue]

Jack Ma on Alibaba, entrepreneurs [Dealbook]

Stock buybacks: breaking the habit [Barrons]

The real reason Yahoo is so cheap [MicroFundy]

Beware the yield co [FT Alphaville]

Down but not out: iron ore miners still profitable in spite of lower prices [Economist]

The new population boom could easily be a dud [WSJ]

Why Amazon has no profits (and why it works) [Andreessen Horowitz]

US Treasury moves against tax-avoidance inversion deals [Reuters]

Mike Pearson's new prescription for the pharmaceuticals industry [Institutional Investor]

What 'big food' does with organic and natural [Fortune]

Warren Buffett's wrath: how Benjamin Moore almost broke his promise [Fortune]

29 charts that explain Americans' financial lives [Vox]

Only 49% of Americans have any money in stocks at all [CNN]

The end of consoles as we know it [alistdaily]

Institutional investor portfolio allocation, quantitative easing & the financial crisis [Bank of England]

What We're Reading ~ Analytical Links 5/14/14

Dream Big: on the Brazilian Trio behind 3G Capital [Amazon]

On investment process [Dasan]

Predicting the present with Google Trends [Berkeley]

A look at Yahoo: a puzzle, a mystery and an enigma [Aswath Damodaran]

The unlikely ascent of Jack Ma, Alibaba's founder [NYTimes]

Recession-baby millennials shun stocks after US slump [Bloomberg]

Families are dining out a lot less [RestFinance]

The future of monetising television [TheGuardian]

What happens when the cable TV money dries up? [Sports on Earth]

Africa growth outlook [WEForum]

Macau jackpot turns to bust for stock investors amid rout [Bloomberg]

Murdoch's $14 billion TV plan sets up showdown with Malone [Bloomberg]

AT&T's deal strategy raises questions [Dealbook]

How dumb are fund investors? [WSJ]

Post Office says it lost $1.9 billion in quarter [NYTimes]

What We're Reading ~ Hedge Fund Links 8/2/13

Soros said to have taken stake in Herbalife (HLF) [Bloomberg]

9 insights from George Soros [StockTwits50]

Tiger Global preps long-only launch [II Alpha]

Jim Chanos and the commodities supercycle [Institutional Investor]

Profile of Glenview's Larry Robbins [Barrons]

Pershing Square tax lien offers peek into strategy [Reuters]

The new hot hedge fund trade: Detroit bonds [Hartford Business]

A hedge fund aptitude test [HF]

Hating on hedge fund fees is bad for your retirement [HF Intelligence]

Why Loeb's Yahoo stock sale means nothing to shareholders [Forbes]

Pershing Square raises questions regarding Herbalife's earnings [PRNewswire]

Fidelity Contrafund sours on Apple, bolsters Tesla bet [Reuters]

George Clooney lashes out at Dan Loeb over Sony [Deadline]

CEO of Overstock.com took out a full page ad mocking Steve Cohen [BusinessInsider]

Third Point Reveals CF Industries Position: Q2 Letter

Dan Loeb's hedge fund firm Third Point is out with their Q2 letter to investors.  In it, they reveal a brand new position in CF Industries (CF):


Third Point's CF Industries Thesis

Third Point writes,

"CF Industries is North America’s largest nitrogen fertilizer manufacturer and one of the  lowest-cost producers globally. CF currently trades at an unwarranted discount to  fertilizer and commodity chemical peers. We believe its structural cash flow generation  strength is misunderstood and that management should deliver a much larger dividend to  its shareholders. Such a dividend would highlight the sustainability of its cash flow  generation and lead to a substantial re-rating."

They see CF's ability to tap lower-cost natural gas in North America as an advantage and the spread between CF's production cost and higher cost producers is a nice benefit:

"On today’s  equity value, that would mean CF is currently trading at an 11% free cash flow yield using  these onerous assumptions. Given the low-risk profile of this portion of CF’s cash flow, it  should receive a bond-like multiple (e.g. 7 - 8% yield), which alone implies significant  upside to the current share price."


Sells Gold Position

It's also worth highlighting that Third Point exited its gold position at the beginning of the 2nd quarter at around $1450.  They see it as an asset that will be hurt as real yields rise.

The letter also touches on Third Point's activist stakes in Sony (SNE) and Yahoo (YHOO).  The hedge fund recently sold a chunk of its YHOO stock to the company.

Embedded below is Third Point's Q2 letter to investors




For more recent hedge fund letters, we also posted up excerpts from Viking Global's Q2 letter.

Third Point Sells YHOO Shares to Yahoo

Dan Loeb's hedge fund firm Third Point filed a Form 4 with the SEC regarding trading activity in shares of Yahoo (YHOO). 

Per the filing, Third Point sold 1.4 million shares on July 19th at a weighted average price of $29.30.  Additionally, they entered into an agreement with Yahoo where the company would buy 40 million shares from Third Point at $29.11.  Additionally, Loeb would step down from the board.

After all is said and done, Third Point is left with a 20.6 million share position in Yahoo.  YHOO had previously been Third Point's top holding, but obviously it has now slid down their position sheet and they now have some new cash to put to work.

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

Third Point Shows Japan Tobacco Stake, International Paper Now Top 5 Holding

Dan Loeb's Third Point Offshore Fund finished April up 1.4% and is now up 10.5% for the year.  In their latest exposure report, we see a few holdings revealed, including positions in Japan Tobacco (a top winner last month) and Banco do Brasil SA (a top loser last month).  The former has been a large holding at Children's Investment Fund.

The other takeaway from April is that Third Point has listed International Paper (IP) as a top holding.  Loeb's firm outlined their thesis on IP in Third Point's Q1 letter and sized up the position in the first quarter.  But now we get some context as to how big of a position it is since it's now a top 5 holding.

The hedge fund originally started a position in this company in the fourth quarter of 2012 and at the end of December, this position was worth almost $60 million.  Since then, IP has run up from $38 to a high of $49 thus far this year so part of the position size could also be attributed to price appreciation.  We've also highlighted how fellow hedge fund Senator Investment Group added to their IP position as well.


Third Point's Top Positions

1. Yahoo! (YHOO)
2. Virgin Media (VMED)
3. American International Group (AIG)
4. International Paper (IP)
5. Ally Financial (multiple securities held)

Looking at their top holdings compared to last month, gold has fallen out of the list (most likely due to the fact that gold prices have fallen this year).

Third Point's net long equity exposure came in at 45.4% at the end of April.  This is largely unchanged compared to the month prior at 45.1% net long.

Dan Loeb was recently listed among the top 10 highest paid hedge fund managers of 2012.

Dan Loeb's Third Point Discloses Porsche & Volkswagen Stakes: March Exposure Report

Dan Loeb's Third Point Offshore Fund finished March up 2.9% and is now up 9% for 2013.  Managing $11.7 billion, the fund has current net long equity exposure of 45.1%, down around 2% from February.


Top Positions

1. Yahoo! (YHOO)
2. Virgin Media (VMED)
3. Gold
4. American International Group (AIG)
5. Ally Financial (multiple securities held)

Third Point's top holdings remain unchanged from the month prior.  Their position in Virgin Media was a new addition to the portfolio in 2013.


Newly Disclosed Positions

In their March "top winners" and "top losers" columns, Third Point discloses a few positions we haven't seen before.  In their "top losers" column from last month, they show holdings in Volkswagen AG, Porsche Automobil Holding SE, and Bond Street Holdings.  Porsche is notable because as of 2012 year-end, it was the top holding at Children's Investment Fund (see TCI's Porsche thesis from a conference late last year).

Additionally, Third Point shows positions in Cheniere Energy (LNG) and DE Master Blenders in their top winners category.  The latter was spun-off from Sara Lee, a position Third Point previously owned (and most likely where those shares came from).

Embedded below is Third Point's March exposure report:




For more on this hedge fund, head to Third Point's Q4 letter.

Dan Loeb's Third Point Reveals Positions in Virgin Media & EADS

Dan Loeb's hedge fund firm Third Point is out with its latest exposure report and they were up 1.2% for February and are up 6% year-to-date.

New Positions Revealed

The major news in their portfolio is newly revealed positions in Virgin Media (VMED) and EADS in Europe.  Virgin Media is set to be acquired by Liberty Global (LBTYA) so this is now a merger arbitrage play.

They did not own a stake at the end of 2012 so all buying has been done in 2013.  And they certainly did a lot of buying as VMED is now their second largest position.  We've also detailed how Philippe Laffont's Coatue Management has been a big owner of VMED (and they also own LBTYA as well).

Third Point's position in European Aeronautic Defence and Space Company (EADS) was listed as a 'top winner' for the month and this is the first time this position has appeared on their sheet.  The Dutch based company is listed in the French stock market and Third Point hasn't had to file with regulators there since it's a large cap and they haven't crossed the ownership thresholds. So, it's hard to say when they actually initiated the position. 

Thomson Reuters' data also lists Andreas Halvorsen's Viking Global as holding 1.44% of shares (although it appears as though they've been selling rather than buying recently.)


Third Point's Top Holdings

As of the end of February, here are Loeb's top positions:

1. Yahoo! (YHOO)
2. Virgin Media (VMED)
3. Gold
4. American International Group (AIG)
5. Ally Financial (Multiple securities held)


Exposure Levels

In terms of equity exposure, Third Point is now 47.3% net long.  This is an increase from the month prior as they were 37.8% net long in January.  One sector they are now net short is healthcare (-0.6%).

Their top winners last month included Morgan Stanley (MS) and Herbalife (HLF).  Their investment theses on both stocks were detailed in Third Point's Q4 letter.

Third Point is 27.1% net long credit, -9.4% and net short macro trades (largely government securities it looks like).

Contrafund's Will Danoff Bullish For 2013: What Stocks He Likes

Will Danoff is manager of Fidelity's Contrafund and he recently sat down with Fidelity Viewpoints to share his outlook for 2013.  He's bullish and so we wanted to highlight what stocks he's looking at.


On Why He's Bullish This Year

"I’m bullish. Stocks are relatively cheap, and U.S. companies have become much leaner. Management teams were worried about the environment, so they were conserving cash and allocating capital prudently. M&A activity was down about 20% in 2012. Boards were saying, 'We’re not going for the long ball. We’re going to focus on maintaining lean inventories, low capital spending, and tight expenses.' As a result, companies are nicely profitable and generating a lot of cash.

So looking forward, I’m hopeful that we’re going to have modest top-line growth that will lead to decent earnings-per-share growth, good free-cash-flow yields, and total returns that may be a lot better than what we will see from cash and bonds."

He also went on to say that,

"My guess is a year from now the economy’s going to improve and stocks are going to be a good place to be. I’m bullish. So, I think if you’re in cash, you have to really think hard about it and say, 'How much cash do I really need?'"

This is a concept that's been talked about by many managers, including Bridgewater's Ray Dalio who said cash will move into 'stuff' in 2013.  David Tepper of Appaloosa Management has also been quite bullish.


What Stocks He Likes

Danoff notes that the key to his strategy has been identifying the best companies in each industry.  There's a few themes/industries he likes this year, and they all seem hinged on an economic recovery: housing, manufacturing, and industrials.

In particular, the Contrafund manager says he's finding most opportunities that should benefit from more competitive US manufacturing (companies are moving plants back from overseas).

He also likes US companies with lots of international exposure, like Colgate-Palmolive (CL), Estee Lauder (EL), and Starbucks (SBUX).

In tech, he likes internet plays such as Google (GOOG), Facebook (FB), and Yahoo (YHOO).  He also is bullish on the software as a service trend, fancying the likes of Workday (WDAY), Salesforce.com (CRM), and Concur (CNQR).


On Tech Giants Google (GOOG) & Apple (AAPL)

These two tech giants are some of his fund's largest holdings.

Danoff's take on Google: "The stock has done basically nothing since 2007, but the earnings have roughly doubled, and the company is generating a huge amount of free cash flow—we estimate the stock is producing roughly a 9% free-cash-flow yield. And net of the cash, the stock has been trading around 13 times earnings while core revenues have been growing almost 20% annually. So I have believed that Google could continue to grow and had the potential for P/E (price-to-earning multiple) expansion."

We've also highlighted how Ricky Sandler's hedge fund Eminence Capital has been bullish on Google as well as it's their largest position at around a 9% position for them.

Danoff also notes that AAPL has been a good holding for his fund as the company's been generating a ton of free cash flow.  The problem is that most of it is overseas (and it's a massive amount of money too) and he also pointed out that competition has intensified in the smartphone and tablet markets.  You can read more of Danoff's outlook here.

Third Point Ramps Up Net Long Equity Exposure in December

Dan Loeb's Third Point Offshore Fund finished 2012 up 21.2%, managing just over $5 billion.  In the hedge fund's most recent December report, we see their exposure levels and latest top holdings:



Exposure Levels

The main takeaway from Third Point's latest exposure report is their sizable increase in net long equity exposure.  They went from being 27.7% net long at the end of November to 43.1% net long at the end of December.

They are slightly net short healthcare and their largest net long exposure comes in the TMT (tech, media & telecom) and industrial sectors.

In credit, Loeb's firm is net long 29.5% and their largest allocation there continues to be asset backed securities.


Third Point's Top Positions

1. Yahoo! (YHOO)
2. American International Group (AIG)
3. Gold
4. Ally Financial (multiple securities held)
5. Murphy Oil (MUR)

Compared to the month prior, there are two notable changes.  First, their position in Greek Government Bonds (GGB's) falls out of their top holdings.  We posted an article about them trimming this position in our weekly linkfest. The second change is that Ally Financial has climbed up the position sheet.

Top winners for Third Point in December included GGB's, AIG, Delphi (DLPH), and Nexen (NXY).  The government exited its stake in AIG, one of the many catalysts Third Point outlined in their thesis on AIG.

NXY has been a big arbitrage play among hedge funds as their merger deal was approved by Canadian authorities.  This stock was flagged as a consensus buy among hedge funds in our November Hedge Fund Wisdom issue.

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.

Notes From the Boston Investment Conference 2012

The first Boston Investment Conference took place earlier this month and today we're posting up some notes from it.  The event benefited the Boston Children's Hospital and featured an impressive list of speakers, moderators, and host committee chairs.

Out of respect for the event organizers, these notes are a little bit different than what we typically post in that the pitches won't be linked to a particular investor.  So unfortunately, you'll have to play a bit of a guessing game here, but we figured something is better than nothing given the quality of the speakers.

List of Speakers/Moderators

Seth Klarman, Baupost Group
Jon Jacobson, Highfields Capital
Richard Perry, Perry Corporation
Will Danoff, Fidelity Contrafund
David Abrams, Abrams Capital Management
Jeffrey Vinik, Vinik Asset Management
Max Stone, D.E. Shaw & Co
Edward Shapiro, PAR Capital Management
Jane Mendillo, Harvard Management Company
Nancy Zimmerman, Bracebridge Capital
Michael Trotsky, MA Pension Reserves Investment Management
David Zervos, Jefferies
Andrew Perold, HighVista Strategies
Lawrence Summers, Harvard University
Eric Doppstadt, The Ford Foundation
Jay Light, Harvard Business School
Andrew Bary, Barron's


Ideas Pitched (Listed in Random Order)

Yahoo! (YHOO)
JAL Japan Airlines (TYO:9201)
Google (GOOG)
Global Eagle Acquisition Corp (EAGL)
Fannie and Freddie preferreds
News Corp (NWSA)
Canadian Natural Resources (CNQ)
JZ Capital Partners (LON:JZCP)


Notes From the Boston Investment Conference

Some of the above stocks were discussed only with one or two comments, but we've posted up notes from some of the detailed pitches below.  Again, unfortunately we can't attribute the ideas to a particular speaker:


Japan Airlines (JAL)

- $8.5b IPO out of bankruptcy, Japanese government sold entire stake (IPO'd around 3,800 Yen and is now around 3,750 Yen)

- Revenues for JAL are about 1/2 of Delta (1/2 of JAL's revenues are from domestic market)

- Changes during bankruptcy: reduced headcount by 35%, decreased salaries by 50%, canceled all debt, eliminated some service on underperforming routes, reduced capacity by 40%, reduced non-fuel expenses by 1/3rd

- Valuation: lowest multiple of any global airline.  JAL around 3.1 EV/EBITDAR, P/E around 6.5

- Headwinds: Orders for 45 Dreamliners.  JAL has already started its non-stop Boston to Japan flight.  Overall market liberalization - competitors can now coordinate on prices and schedules (get the benefits of a merger without having to deal with the operational headaches or merging 2 airlines).  High barriers to entry in the Japanese market: JAL is 37% of market and ANA is 47%, little room for new players

- Largest risk: entry of a low cost carrier into Japanese market: currently low penetration of LCC in Japan.  Not seen as a huge threat because LCCs are typically used for short flights and Japanese tend to take trains for short trips.  Also, there are limited slots for new airlines at the airport closest to the city.  If a LCC flew into the airport farther outside the city, the cost of a taxi or train into the city would negate taking a low cost flight to Japan.


Yahoo! (YHOO)

- Cheap when looking at balance sheet.  Market value of 35% of Yahoo Japan = $7.7, market value of stake in Alibaba = $8.1, preferred shares = $0.8 (these three tax-adjusted equal $11.6b), cash = $9.4, shares out = 1.2 for a value of $17.5 (you are paying close to nothing for $4.3b in revenue or $700m in free cashflow).

- Investor thought Marissa Meyer will be a very good CEO   

- MarketFolly note: Our newly released issue of Hedge Fund Wisdom last week highlighted that David Einhorn's Greenlight Capital and Chase Coleman's Tiger Global both started new positions in YHOO during the third quarter.  Also, recall that Dan Loeb's Third Point has been an activist investor in the name.    


Google (GOOG)

- Cheap stock - trading around where it was in 2007 and EPS has increased from $15 then to $40 now 

- MarketFolly addendum: We previously posted Eminence Capital's thesis on GOOG as well. 


This concludes notes from the Boston Investment Conference.  We've covered a ton of events recently, so be sure to also check out:

- Notes from Sohn London Investment Conference (Hohn, Chanos & more)

- Notes from Invest For Kids Chicago (Mandel, Peltz & more) 

- Notes from Great Investors' Best Ideas (Einhorn, Bass & more)
 

Dan Loeb's Third Point: October Exposure Report & Top Holdings

Dan Loeb's Third Point Offshore Fund is out with its latest exposure report for October and in it we see that they were up 2.6% for the month and are up 13.8% for the year.


Net Exposure Levels

Their equity exposure continues to rise as they are now net long 44.1%, an increase of 2.4% in net long exposure from the month prior.  This looks to mainly be attributed to a reduction in their short exposure. 

Their largest net long equity exposure continues to come from the technology sector (largely due to their Yahoo position) at 18.8% net long, followed by financials at 8.7% net long (mainly due to their AIG stake).

In credit, they were 26.7% net long at the end of October, down from 30.4% the month prior.


Top Winners & Losers

Their stake in Dolphin Capital Investors was a top winner during the month.  We were the first to reveal that Third Point was set to buy a stake in the Greek property & land company.

Other winners for Third Point include their new stake in Greek Government Bonds as well as Yahoo, AIG, and Murphy Oil.  Murphy recently announced it would spin off its US downstream subsidiary.

Their top losers in the month were Apple, gold, and Overseas Shipholding Group, a new name we've not seen listed in their reports previously.


Third Point's Top Positions

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

You can read Loeb's thesis on AIG, GGB & Murphy in Third Point's Q3 letter.

Dan Loeb's Third Point Discloses Greek Government Bonds & Murphy Oil Stakes

Dan Loeb's Third Point Offshore Fund was up 3.4% in September and is now up 10.9% year-to-date for 2012.  The fund manages $4.7 billion and has seen 17.2% annualized returns.  Takeaways from their latest exposure report are below, including newly disclosed stakes in Greek Government Bonds and Murphy Oil (MUR):


Top Positions As of End of September

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

The last three positions are all noted by Third Point as "positions of approximately equal size."

The main takeaway in this month's exposure report is that Third Point has disclosed a position in Greek Government Bonds.  In the past, we had highlighted how Third Point owned Portuguese bonds.

The hedge fund also revealed a stake in Murphy Oil (MUR). While this is the first time it has been listed on the exposure report, Third Point also filed an amended 13F with the SEC yesterday disclosing that they actually owned MUR in the second quarter.  So this isn't a stake they just went out and bought new in September and that's worth drawing attention to given that MUR has spiked from a low of $44 at the end of Q2 up to almost $56 currently.

AIG is now their 2nd largest holding.  They originally bought AIG in the second quarter, ratcheted up their stake in August, and it appears to have increased (or appreciated over other holdings) in September.  The government has been selling down their stake and institutional buyers have been gobbling shares up.


Net Exposure Levels

In equities, Third Point is now 41.7% net long (73.6% long and -31.9% short), up from 35% net long the month prior.  The hedge fund has slowly and steadily increased net long exposure since the summer sell-off.

In credit, Loeb's firm is net long 30.4%, largely unchanged from months prior.

Geographically, Third Point is net long the Americas at 79% (up from 75%).  The most evident change is they've gone from net short -7% EMEA to net long EMEA 2% over the past two months.  They've also slightly reduced their net short exposure to Asia, going from -10% to -8%.

For more from this hedge fund, check out Third Point's Q2 letter.  Loeb is also featured in the new book from this year: The Alpha Masters, which we recommend reading.