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Daniel Loeb Buys Big Stakes in Delphi, Apple, Google
Posted by: guruhl (IP Logged)
Date: May 18, 2012 03:00PM
Daniel Loeb, founder of $8.9 billion hedge fund Third Point LLC, bought 26 new stocks for his 43-stock portfolio in the first quarter of 2012, with some major changes — seven of his top-ten holdings are new buys. For his top new buy, he devoted 10.3% of his portfolio to Delphi Auto Plc (DLPH), followed by positions in Apple Inc. (APPL), UTD Techs Corp. (UTX), Google Inc. (GOOG), and Medco Health Solutions (MHS).
Loeb also added 25.89% to his largest position, Yahoo (YHOO). More than 44% of his quarter-end portfolio was invested in the technology sector. The positioning earned him a 12.4% return in the first quarter, roughly in line with the markets. In the last 10 years, Loeb returned 261.7% cumulatively, compared to 34.9% for the S&P 500.
Loeb bought 13,339,711 shares of Delphi Auto at an average price of $29. Delphi is one of the largest global vehicle components manufacturers, which emerged from bankruptcy in 2011 and held its IPO in November 2011. Since then, its stock has advanced almost 28%.
In the second quarter of 2011, Loeb eliminated a position of 200,000 shares in Apple at an average price of $338. Then, in the first quarter 2012, he bought 362,000 more shares at an average price of $445.
Apple, along with Delphi, were two stocks Loeb named in his “top five winners” for the portfolio in his first-quarter letter. He also offered an analysis of Apple:
“Following Apple's December quarter earnings, we re‐established a position in the stock at $445 per share, a level 10% up from the pre‐earnings price. While the market reacted positively to the strong results, we believed it was still not discounting adequately the strong likelihood that Apple would return capital in 2012. The prospect of capital return stood to broaden the investor base enabling the market capitalization to re‐base around an attractive dividend profile, particularly relative to the Company's growth rate. Beyond the capital return catalyst, we were focused on Apple's entry into the 4G device space in 2012, led by the latest iPad and the pending iPhone 5,” he wrote. (Read more here.)
For his third-largest new buy, Loeb bought 2.2 million shares of UTD Techs Corp. (UTX), a high technology products and services provider to the building systems and aerospace industries.
His fifth largest was a 280,000-share stake in Google, at an average of $616 per share.
See more of Daniel Loeb’s newly updated portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Daniel Loeb.
Guru Discussed: Daniel Loeb: Current Portfolio, Stock Picks
Stocks Discussed: AAPL, UTX, GOOG, MHS, DLPH,