Daniel Loeb

Daniel Loeb

Last Update: 02-13-2017

Number of Stocks: 38
Number of New Stocks: 12

Total Value: $10,188 Mil
Q/Q Turnover: 26%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Daniel Loeb Watch

  • Luxury: Top Picks

    According to Credit Suisse, global wealth grew by 5% year-over-year, compared with a global decline of 5% in the prior year. According to the same research report, the US saw the biggest improvement with wealth up by 13% thanks to the recovery in property prices and the on-going rally in equity markets. Moreover, the bank expects wealth to increase by 7% per year until 2018. With this in mind, here I want to take a look at my two top luxury equity ideas.

    Resilient growth and a potential M&A target

      


  • What the Gurus Did Over the Past Week

    The following information is a highlight of the real-time guru activity we saw this week. To view more information on these gurus, check out their guru portfolios. “Real Time Picks” reports the stock purchases and sells that Gurus have made within the prior two weeks. If a Guru makes a purchase or sell of a company in which they own a greater-than 5% stake, SEC regulations require them to report their transaction within two days. We saw notable real time activity from Steve Mandel, Richard Perry and Daniel Loeb.

    Steve Mandel
      


  • Activist Investor Dan Loeb (Third Point) Takes Aim at Sotheby's

    Dan Loeb of Third Point is at it again. This time the target of a nasty letter is Sotheby's (NYSE:BID).

    The full letter is below:  


  • Sony's Management Should Pay Attention to Dan Loeb

    As an investor, its tough not to agree with Daniel Loeb. For years, the activist investor has been creating value for the investors of his fund, Third Point LLC, and for all the shareholders of the companies where he held a long position. This was the case for Yahoo (NASDAQ:YHOO), a position he already closed at a huge profit: Third Point bough Yahoo shares at various prices between $11 and $15 and sold its position at around $29. Now, Loeb is proposing to unlock value from Sony (NYSE:SNE), the Japanese conglomerate. Even when Sony's shares have raised by more than 90% year-to-date, I think there is still huge upside potential for the company. Let's take a look!

    A Value-Enhancing Proposal  


  • Daniel Loeb's Third Point Underperforming So Far, Top Stock Picks Excel

    Daniel Loeb’s Third Point Offshore Fund is underperforming the market this year, having returned 15% versus the S&P 500’s 16.1% return through Aug. 31. For the month of August, the fund fell 0.7%, less than the S&P’s 2.9% decline. While other strategies may be lackluster at the moment, the hedge fund manager’s stock picking strength is seen in his top five positions, which are all well into positive territory this year. The other strategies remain unknown as Loeb ceased reporting his top five overall positions (including shorts, currency plays and others) back in May.

    As of June 30, his top long stock picks having a stellar year are Yahoo Inc. (NASDAQ:YHOO), American International Group (NYSE:AIG), Liberty Global PLC (NASDAQ:LBTYA) and Thermo Fisher Scientific Inc. (NYSE:TMO).  


  • Betting on Luxury

    I have always liked the luxury goods market. The reason is simple: The sector's growth is tied to wealth creation in emerging markets. Countries like Brazil and China are generating a huge amount of wealthy families every year. Consolidation is also helping investors in the luxury goods space. Huge conglomerates such as LVMH Moet Hennessy Louis Vuitton (OTH:LVMUY) are constantly buying highly appreciated smaller companies such as Loro Piana, the Milan-based cashmere company which was bought for 2.7 billion euros a few months ago. Here I will take a look at two independent luxury goods companies that I believe could constitute M&A targets going forward.

    Shinier Than Diamonds
      


  • Daniel Loeb Buys Sotheby’s Stake in Winning Streak

    Some of his high-profile hedge fund colleagues have experienced mixed results from their activist investments recently, but Daniel Loeb has been on a fairly good streak with his biggest bets such as Yahoo (NASDAQ:YHOO) and Herbalife (NYSE:HLF). This week he dove into his next project: art auction house Sotheby’s (NYSE:BID).

    Reported on Monday, Loeb purchased a 5.78% stake in the company, equaling 3,925,000 shares, according to GuruFocus Real Time Picks. The 13D filing states that he accumulated the shares in a series of purchases and sells taking place from June 26 through Aug. 23. His purchase prices ranged from $37.64 to $45.76.  


  • Daniel Loeb’s High Impact Selling - YHOO Shares 62M and Second Quarter Update

    Guru Daniel Seth Loeb is the founder and CEO of Third Point LLC, a hedge fund based in New York. His portfolio update lists 33 stocks with six new stocks. The total value is $4.41 billion, with a quarter-over-quarter turnover of 25%. His portfolio is currently weighted with top three sectors: consumer cyclical at 12%, financial services at 10.1% and communication services at 8.1%.

    On the sell side, Loeb just made a huge reduction on his Yahoo Inc. (NASDAQ:YHOO) holding in third quarter trading, as well as 22 sells or reductions in the second quarter of 2013. Here are recent selling highlights on trades that have made the highest impact on his portfolio.  


  • Daniel Loeb's Second Quarter Increases

    Daniel Loeb is a renowned hedge fund manager and the founder and chief executive of Third Point. During the second quarter, Daniel Loeb bought six new stocks bringing his total number of stocks to 33 valued at $4.414 billion.

      


  • Daniel Loeb Comments on Yahoo

    Equity Position: Yahoo (YHOO)

    Last week, we sold approximately two-thirds of our stake in Yahoo. In addition, the three Third Point nominees to the company's Board of Directors –Daniel Loeb, Harry Wilson, and Michael Wolf – submitted their resignations as required by the settlement agreement ending our proxy contest in 2012. We continue to hold approximately 20 million shares and the investment's IRR is just over 50%since inception.  


  • Daniel Loeb Comments on CF Industries

    Equity Position: CF Industries (CF)

    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.  


  • Daniel Loeb Comments on Sony Corporation

    Equity Position: Sony Corporation (SNE)

    Third Point acquired a significant stake in Sony Corporation ("Sony") earlier this year, and in May, we unveiled a proposal to increase value by partially listing Sony's Entertainment ("Entertainment") business in the U.S. Our investment thesis is that Sony – composed of Electronics, Finance, and Entertainment – is not well understood by investors and is therefore significantly undervalued. Sony's Entertainment division has leading franchises in movie and television production and distribution via Columbia Pictures and Sony Pictures Television, and is one of the top recorded music and publishing companies in the world. Sony also has coveted global cable network assets, including a strong position in the fast-growing Indian market. Electronics is best known for its struggling televisions and VAIO computers but its true value lies in its strong semiconductor and video game console divisions, and its resurgent smartphone business. At the time we made our initial investment, we believed that at our purchase price we were acquiring Entertainment at an attractive value while receiving Electronics nearly for free, giving us a substantial margin of safety.  


  • Daniel Loeb's Third Point Second Quarter 2013 Investor Letter

    Review and Outlook: Third Point's opportunistic approach and robust framework allow us to search globally for attractive event-driven equity and credit opportunities and occasional"macro" trades. Our broad mandate has made it increasingly essential to study economic trends and attempt to identify key areas to dedicate our resources. Over our eighteen years, this flexibility has given us the ability to avoid (or short) asset classes that become overvalued, such as tech stocks in the bubble of the late '90s or credit leading up to 2007, and to press bets in areas that become oversold. As a result, our portfolio is built not only by reacting to special situations that arise, but also from top down insights.

    At our Investor Presentation in February, we outlined four key developments we expected would lead to interesting investment ideas in 2013: a) increasing allocations to equities as a consequence of a more benign macro environment; b) a re-rating of stocks due to improving global economic growth; c) a resurgent Japan; and d) an increase in merger and acquisition activity reflecting rising corporate confidence. More than halfway through the year, all of these developments have played out as expected, and a majority of our profits have come from event-driven investments in American and Japanese equities.  


  • Guru Real Time Activity Update for the Week of July 22 to 26

    The following information is a highlight of the real-time guru activity we saw this week. To view more information on these gurus, check out their guru portfolios.

    The “Real Time Picks” reports the stock purchases and sells that Gurus have made within the prior two weeks. If a Guru makes a purchase or sell of a company in which they owns a greater-than 5% stake, SEC regulations require them to report their transaction within two days. Mario Gabelli, George Soros and Daniel Loeb all reported real time stock picks over the past week.  


  • Daniel Loeb Sells 40 Million Shares of Yahoo

    On July 22 Daniel Loeb decreased his position in Yahoo! (YHOO) by 66.77%. The guru sold a total of 41,400,000 shares at an average price of $29.11 per share. This sell comes as Yahoo! announced that they would be repurchasing 40 million shares held by Loeb’s fund, Third Point. The purchase price equaled the closing price of Yahoo! common stock on July 19.

    Since this sell, the price per share has dropped approximately 3%. As of the first quarter Loeb held 5.63% of the company’s shares outstanding, but as of his most recent sell he holds 1.87% of Yahoo’s shares. Daniel Loeb now owns 20,600,000 shares of Yahoo!, keeping him as the top guru shareholder.  


  • Daniel Loeb’s Third Point Trails S&P in First Half, But Top Stocks Doing Great

    Daniel Loeb does not have to worry much about his Third Point Offshore Fund trailing the S&P for a few quarters: His 10-year cumulative return is 352.2% compared to 99.7% for the index. For the first half of the year he has slightly underperformed the S&P 12.6% to 13.8%, after reporting a 1.8% loss for June compared to the S&P’s 1.3% loss.

    The reason for the margin is not readily clear, as Loeb ceased disclosing his fund’s top positions in his monthly reports in May. Holdings such as gold (down 26% year to date), short positions, macro positions or government bonds, which are not listed in SEC filings, may be weighing on overall returns. In May, the last time he openly reported his “top losers,” gold and two shorts appeared in the list.  


  • Dan Loeb (Third Point) June 2013 Investor Report



  • Third Point's Dan Loeb Increases His Bet on Sony and Writes a Second Letter to Management

    Below is Dan Loeb's second letter to Sony Management (NYSE:SNE) where he discloses that he has upped Third Point's position in Sony to $1.4 billion and reiterates his opinion on the direction the company should take.

    Mr. Kazuo Hirai  


  • 3 Stocks Dan Loeb Has Been Buying

    Move over Mr. Ackman.

    Dan Loeb of Third Point is the new man in town taking the activist crown.  


  • Third Point's (Dan Loeb) Letter to Sony Management



  • Daniel Loeb's Top Three Increases of the First Quarter

    Billionaire Daniel Loeb of Third Point LLC has a portfolio consisting of 40 stocks, 12 of those being new buys, valued at $5.3 billion. Loeb is well known in the financial world for writing public letters in which he expresses disapproval of the performance and conduct of other financial executives. In 2012 the guru reported a return of 21.2%, an excess gain of 5.8% over the S&P 500’s return.

      


  • Daniel Loeb Adds 3 New Buys to Top 10

    Daniel Loeb is an activist investor who has recently suggested a few ideas to top holding Sony (NYSE:SNE), via a less strongly worded letter to top management than usual. He could be out to replicate his success with Yahoo (NASDAQ:YHOO), a sleepy company he shook up and then watched rise 75% in stock price the past 12 months. Loeb’s 10.5% return through April lagged the S&P 500 index’s 12.7%, though his annualized return since the inception of Third Point, his event-driven hedge fund, is 17.9%, compared to 6.6% for the S&P 500.

    In his first quarter letter, Loeb said, “Consistent with our approach over the past few quarters, we have approximately half the equity exposure of the market and vary our net and gross dynamically. We are continuing to find interesting event‐driven opportunities in equities, credit and currencies.”  


  • Third Point Update and Top Three

    Highest-earning hedge fund managers are in the spotlight this week as many of the investor Gurus have found a place on the new “Rich List” released by Institutional Investor’s Alpha. Third Point’s letter-writing shareholder activist founder Daniel Loeb is No. 10 on the Rich List, and is reported to have earned $380 million in 2012.

    In first quarter Loeb’s fund Third Point made around $50 million on his $200 million Herbalife bet, according to WSJ, listing Herbalife Ltd. (NYSE:HLF), Yahoo (NASDAQ:YHOO) and Virgin Media (VMED) as the fund’s top performers. Virgin Media (VMED) is up 127% over 12 months, while Herbalife (NYSE:HLF) is down 4% over 12 months. Here’s a current look at Daniel Loeb’s other top holdings.  


  • Large Insider Sells Reported in the Entertainment Industry

    This week we saw an increase in insider sells coming from the entertainment industry. The following three companies represent the largest sells coming from two or more of their corporate executives.

    1. Virgin Media (VMED)  


  • WellPoint (WLP) - A Comprehensive Value Analysis

    Putting Politics Aside to Make Money


    As value investors, we look for consistent growth in a wonderful business that is currently selling at a discount. I believe that the market is offering WellPoint Inc. (WLP), an established health insurance provider, at a discount to its value.

      


  • 'Macro Tourist' Trade

    What do Daniel Loeb and Bill Ackman have in common? Both are well known for their hedge fund activist investing. Loeb in the ensuing years has transitioned from activist to macro hedge fund manager; evident from his stellar return in Greek government bonds and most recently, from the Japan trade (initial currency/index trade). Ackman, despite his recent hiccup in few investments such as J.C. Penney (NYSE:JCP) and Herbalife (NYSE:HLF), had also dabbled in macro investing such as in Hong Kong dollar back in 2011. As Ackman put it recently, “The current printing of money is a 'non-sustainable' situation." Hong Kong should adjust is currency peg, he said, and he has a small position essentially shorting it.

    There is no such thing as an unblemished track record, unless you run a Madoff scheme. Interestingly, while Loeb is short JPY and long JPY index/selected stocks, Kyle Bass has dubbed anyone who is long JPY stock is a “macro tourist.” Bass has taken a short position in Japanese Government Bonds (JGB) since 2010. It remains to be seen if the widow-maker trade will eventually pan out. Nonetheless, as George Soros succinctly puts it, "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."  


  • Rolling Stone - Dan Loeb Simultaneously Solicits and Betrays Pension Funds

    There's confidence. There's chutzpah. And then there's Dan Loeb, hedge fund king extraordinaire and head of Third Point Capital, who's getting set to claim the World Heavyweight Championship of Balls.

    On April 18, Loeb will speak before the Council of Institutional Investors, a nonprofit association of pension funds, endowments, employee benefit funds, and foundations with collective assets of over $3 trillion. The CII is an umbrella group that represents the institutions who manage the retirement and benefit funds of public and corporate employees all over America – from bricklayers to Teamsters to teachers to employees of Colgate, the Gap and Johnson and Johnson.  


  • Daniel Loeb Comments on Liberty Global

    During the First Quarter, we increased our exposure to Liberty Global (LBTYA), Europe's largest cable operator, following the announcement of its acquisition of Virgin Media (VMED). The acquisition triggered a wave of investments by arbitrageurs, who created an attractive entry point for us by putting pressure on Liberty Global's shares. Initiating a position in Virgin Media allowed us to purchase additional Liberty Global at a material discount to its pre‐announcement and pro forma trading levels.

    Our initial interest in Liberty Global was spurred by multiple catalysts and favorable geographic tailwinds. Relative to the United States cable market, Europe offers materially higher volume growth, lower churn, and meaningful penetration opportunity. Before yearend, we expect catalysts in the stock to include the closing of the VMED deal, the initiation of a substantial buyback plan, and the unveiling of accretive wireless and B2B initiatives. The wireless market in Liberty's key Western European markets generates over $73 billion of annual revenue, presenting Liberty with the opportunity to redefine the MVNO market, leveraging a unique WiFi footprint, full back office and system control, and attractive quad play bundles. Liberty also appears poised to ramp up its B2B efforts, particularly in Germany.  


  • Daniel Loeb's Q1 Letter - Comments on Liberty Global, Japan, International Paper, Mortgages

    Important Note to Our Investors and Unintended Recipients: Third Point's Quarterly Letters are designed to inform our investors about recent portfolio developments and provide our views of the market environment. Our letters are not investment recommendations for the general public. The legal disclaimer makes clear that we may trade in and out of positions discussed at any time and undertake no duty to update anyone, except to the extent we are required to make filings with the SEC. Investors who choose to take action based on our investment ideas do so at their own risk.

    Review and Outlook  


  • Daniel Loeb Comments on Tesoro Corporation

    Tesoro Corporation (NYSE:TSO) is a $5.7 billion refining and marketing company with assets in the West Coast and Rocky Mountain regions of the US. Tesoro has several characteristics we like in an investment: 1) significant hidden value in high-multiple assets like retail, pipelines, and General Partner interests; 2) impending transactions/projects that are underappreciated by the market; and 3) a shareholder-friendly management team focused on creating value. While it is perhaps unusual to invest in a company following a quarter(Q3 2012) in which the stock appreciated by ~68%, we believe Tesoro remains misunderstood by the market; as evidence, current sell-side analyst price targets range from $35 to $84!  


  • Daniel Comments on Morgan Stanley

    During the Fourth Quarter, we initiated a position in Morgan Stanley (NYSE:MS), which we believe is in the early innings of a turnaround. The bank’s investment banking advisory and equity sales and trading businesses – which we know well from our perspectives as both investors and long-time satisfied clients – have consistently won top three market shares and are impressively positioned. Although MS has historically failed to capitalize on its strengths, its leadership currently is focused on growing its good businesses while consolidating and successfully fixing its previously troubled Wealth Management business.In 2013, we expect Morgan Stanley to tackle its other weak business, Fixed Income, Currency, and Commodities (FICC) sales and trading. Morgan Stanley’s stock currently trades at a 20% discount to tangible book (down from a 35% discount when we acquired our stake at an average cost of $16.77 per share), and we view MS at these prices as a chance to buy a free call option on a promising restructuring.  


  • Daniel Loeb Comments on Herbalife

    Herbalife (NYSE:HLF) is a leading provider of weight management and nutritional supplements operating in more than 80 countries through a network of independent distributors. The stock declined by nearly half last month following controversial assertions made by a short seller about Herbalife’s business model and practices. Third Point has a different view and holds about 8% of Herbalife outstanding common stock, which we acquired mostly during the panicked selling that followed the short seller’s dramatic claims.

    Based on its strong financial performance, Herbalife is a classic “compounder” – a well-managed company that sustains consistent top-line growth, has a leading market position,and steadily increases margins, earnings per share and free cash flow while demonstratingshareholder-friendly behavior. Since going public in 2004, Herbalife has increased revenueat a double digit rate for seven of the past eight years, expanded gross and operating margins, leveraged operating expenses, and introduced more premium products. Earnings per share have increased by approximately 20-50% each year since 2004, with the exception of 2009. Led by CEO Michael Johnson, management has also used the company’s ample free cash flow to de-lever its balance sheet and shrink the share count by nearly 25%. This type of steady non-cyclical growth is hard to find and puts Herbalife at the head of the compounders’ class.  


  • Daniel Loeb Comments on Murphy Oil

    As we explained in our Third Quarter Letter, Third Point initiated a significant stake in Murphy (NYSE:MUR) following a 3-year period in which Murphy's share price declined by ~15% while the SPDR S&P Oil and Gas E&P Index appreciated by ~49%. Our thesis was that the company had many routes to unlock latent, meaningful value, among them – and most significantly – a highly accretive spin-off of its retail business.

    Two weeks after our letter, Murphy's management announced a series of shareholder-friendly initiatives that have been met with market enthusiasm. In addition to announcing a separation of the retail business via a tax-free spin, management unveiled a $1 billion share repurchase program and a $2.50 per share special dividend. While we applaud these first steps, we expect the company to announce further moves to address its still-depressed valuation, including sales of its Montney asset and 5% stake in Syncrude. Natural gas acquisition activity in Western Canada has continued vigorously since we called for the sale of the Tupper asset, and recent deals in the space have confirmed our valuation expectations.  


  • Daniel Loeb Beats the Market with Yahoo, Japan and Cheniere Energy

    In a difficult quarter for hedge funds, and rather pleasant one for the S&P 500, Daniel Loeb bested the market with a 13.3% in his Ultra Fund in the first three months of the year, according to CNBC. By comparison, the S&P returned 10%, and the average hedge fund eked out just 3.13%. Loeb, the leader of hedge fund Third Point well known for his stormy business shakeups in his activist investment targets and event-driven investment strategy, saw several points of his strategy blossom this year.

    Yahoo! Inc. (NASDAQ:YHOO)  


  • Third Point (Dan Loeb) Q4 2012 Letter



  • Daniel Loeb Reports New Top Position – Virgin Media

    Aside from arguing with Bill Ackman about Herbalife (NYSE:HLF), the founder of $11.6 billion hedge fund Daniel Loeb in February acquired a new second-largest position, Virgin Media (VMED), according to his fund’s monthly update. The position sits underneath Yahoo (NASDAQ:YHOO), meaning it must have less than a 26.6% weighting in his portfolio, and above physical gold.

    Virgin Media’s market price has increased almost 30% year to date, trading at $47.63 per share on Monday, placing it at Third Point’s second “top winner” of the month, in which his Offshore Fund returned 1.2%, compared to 1.2% for the S&P. Third Point was up 6% for the year through the end of February, also trailing the S&P’s 6.6%.  


  • Market Cycle Analysis & Five-Year Rolling Analysis of Guru Performance

    Market Cycle Analysis In our research of John Hussman’s performance, we observed that he underperformed the market if we look at the latest 3-year annualized return, 5-year annualized return and even 10-year annualized return. Yet this might not be the case if we look at his performance over a complete economic cycle.

    We believe that the performance over fixed time periods, like the latest 3-year, 5-year and 10-year, might be misleading since a single bad year performance would ruin all. Therefore, we believe the best way to measure funds’ performance is to check the performance number over complete market cycles.  


  • Vanity Fair's Story on Bill Ackman, Featuring Bike-Ride Meltdown

    Editor’s Note: There is as much ego as money behind Dan Loeb and Bill Ackman’s battle over the nutritional company Herbalife (NYSE:HLF). The story of their cycling trip from Bridgehampton to Montauk, which has practically achieved urban-legend status in the hedge-fund eco-system, provides a vivid example of what is at stake for the two former friends. Vanity Fair contributing editor William D. Cohan gets Ackman's response on the ride in a story on the rivals that will appear in the April issue. Read an excerpt here—the full story will be released next week.

    The supremely confident billionaire hedge-fund manager Bill Ackman has never been afraid to bet the farm that he’s right.  


  • Dan Loeb Reduces Largest Holding, Yahoo!

    Daniel Loeb reduced his position in largest holding Yahoo Inc. (NASDAQ:YHOO) by 15.07% on Feb. 1, 2012, according to GuruFocus Real Time Picks. After the sale, he owns 62,000,000 shares. The founder of hedge fund Third Point LLC began building his 6.17% Yahoo stake in the third quarter of 2011 when the price averaged about $14 per share. Loeb chose to trim the position after a strong rally in the stock, implying he may believe its current three-year high share price is near its intrinsic value.

    Yahoo shares began to move in October 2012, and have gained 21% in the last six months to date. On Monday, the price fell 2.13% to close at $19.34 a share, giving Loeb a substantial gain.  


  • Apple – The Guru Winners, Losers and Buyers on Stock Pullback

    Apple (NASDAQ:AAPL)’s stock has gone from bad to worse this year, plunging 12% already this afternoon to $453 a share, significantly off of its 52-week high of $705 reached in September. Only recently talk abounded that Apple would hit $1,000 per share, and perhaps achieve first company with a trillion-dollar market cap status. Some GuruFocus Gurus escaped just in time, others lost, and still others are greeting this as a temporary market dip before Apple continues on to greatness.  


  • Loeb Rumored to Short Nu Skin, Herbalife Rival

    After taking an 8 percent stake in Herbalife (NYSE:HLF) earlier this month, a company that’s on several hedge fund managers’ shorting lists, including Pershing Square’s Bill Ackman, activist investor Daniel Loeb of Third Point has allegedly made a baffling decision to short Herbalife rival, Nu Skin Enterprises (NYSE:NUS).

    Nu Skin is a company that produces and sells anti-aging and nutrition products. And just like Herbalife, it operates through a multi-level marketing business model.  


  • An Overview of the Herbalife Events Between Ackman and Loeb

    The first great financial war of 2013 has started, and it has nothing to do with Greek bonds or the debt ceiling or the Grand Bargain. Instead, it’s a hedge-fund-on-hedge-fund brawl about multilevel marketing of weight-loss supplements.  


  • Can Yahoo be a Tech Leader Again?

    During the third quarter of 2012, David Einhorn, Daniel Loeb, Joel Greenblatt and Ray Dalio bought into Yahoo (NASDAQ:YHOO), one of the leading providers of Internet information. The company was once the leading information website before competitors came along and found a way to deliver better results. Then an outdated platform eventually did Yahoo in. Consumers quickly gravitated towards newer and more reliable websites that offered a better search engine. Yahoo, furthermore, became irrelevant as most people who worked for the company were incompetent or appeared uninterested in reviving its business. Yahoo became nothing more than a stagnant business that offered nothing but inferior qualities and little to no advantages over its closest competitors.

    But this has all started changing recently with a revamped management team more serious and focused on reviving Yahoo, a renewed willingness to invest and grow company resources, and a surplus of cash that increases the company’s flexibility. Yahoo could be gaining steam for the following reasons:  


  • Talks of Carl Icahn Getting a Piece of Herbalife, Joining Loeb in Long Position

    After fellow activist investor, Daniel Loeb set off the media earlier this week with his declaration to obtain a long position in Herbalife (NYSE:HLF), a company that Pershing Square’s Bill Ackman just shorted weeks ago, corporate raiding Guru Carl Icahn has been reported yesterday afternoon of joining Loeb in taking a piece of the action.

    Herbalife, a nutritional supplement company that uses a multi-level marketing approach, was labeled a pyramid scheme by Ackman days before Christmas, dropping the stock down more than 15 percent. A few weeks have gone by, along with Loeb’s initiation, and the stock is seen slowly recovering. The stock is down only 0.64 percent Friday morning.  


  • Herbalife's President Appears on CNBC to Refute Ackman's Claims

    What a start to 2013! Ackman goes public in grand fashion with a 9 million-page short presentation on Herbalife (NYSE:HLF) promising to dedicate his profits to charity.

    Then to make things even more interesting, both Daniel Loeb and now Carl Icahn have taken the long side of Herbalife. Icahn and Ackman have long had a real hate for each other, so this story is going to be one for the ages.  


  • Bill Ackman Comments on Dan Loeb's 8 Percent Herbalife Stake



  • Daniel Loeb Comments on Murphy Oil

    Murphy Oil (NYSE:MUR)
    As we explained in our Third Quarter Letter, Third Point initiated a significant stake in Murphy following a 3-year period in which Murphy’s share price declined by ~15% while the SPDR S&P Oil and Gas E&P Index appreciated by ~49%. Our thesis was that the company had many routes to unlock latent, meaningful value, among them – and most significantly – a highly accretive spin-off of its retail business.  


  • Daniel Loeb Comments on Tesoro Corporation

    New Equity Position: Tesoro Corporation
    Tesoro Corporation (NYSE:TSO) is a $5.7 billion refining and marketing company with assets in the West Coast and Rocky Mountain regions of the US. Tesoro has several characteristics we like in an investment: 1) significant hidden value in high-multiple assets like retail, pipelines, and General Partner interests; 2) impending transactions/projects that are underappreciated by the market; and 3) a shareholder-friendly management team focused on creating value. While it is perhaps unusual to invest in a company following a quarter (Q3 2012) in which the stock appreciated by ~68%, we believe Tesoro remains misunderstood by the market; as evidence, current sell-side analyst price targets range from $35 to $84!  


  • Daniel Loeb Comments on Morgan Stanley

    New Equity Position: Morgan Stanley
    During the Fourth Quarter, we initiated a position in Morgan Stanley (NYSE:MS), which we believe is in the early innings of a turnaround. The bank’s investment banking advisory and equity sales and trading businesses – which we know well from our perspectives as both investors and long-time satisfied clients – have consistently won top three market shares and are impressively positioned. Although MS has historically failed to capitalize on its strengths, its leadership currently is focused on growing its good businesses while consolidating and successfully fixing its previously troubled Wealth Management business. In 2013, we expect Morgan Stanley to tackle its other weak business, Fixed Income,Currency, and Commodities (FICC) sales and trading. Morgan Stanley’s stock currently trades at a 20% discount to tangible book (down from a 35% discount when we acquired our stake at an average cost of $16.77 per share), and we view MS at these prices as a chance to buy a free call option on a promising restructuring.  


  • Daniel Loeb Comments on Herbalife

    New Equity Position: Herbalife (NYSE:HLF): Herbalife is a leading provider of weight management and nutritional supplements operating in more than 80 countries through a network of independent distributors. The stock declined by nearly half last month following controversial assertions made by a short seller about Herbalife’s business model and practices. Third Point has a different view and holds about 8% of Herbalife outstanding common stock, which we acquired mostly during the panicked selling that followed the short seller’s dramatic claims.

    Based on its strong financial performance, Herbalife is a classic “compounder” – a well-managed company that sustains consistent top-line growth, has a leading market position, and steadily increases margins, earnings per share and free cash flow while demonstrating shareholder-friendly behavior. Since going public in 2004, Herbalife has increased revenue at a double digit rate for seven of the past eight years, expanded gross and operating margins, leveraged operating expenses, and introduced more premium products. Earnings per share have increased by approximately 20-50% each year since 2004, with the exception of 2009. Led by CEO Michael Johnson, management has also used the company’s ample free cash flow to de-lever its balance sheet and shrink the share count by nearly 25%. This type of steady non-cyclical growth is hard to find and puts Herbalife at the head of the compounders’ class.  


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