John Paulson is the founder and president of Paulson & Co., a $36 billion hedge fund. In 2008, the year of the credit crisis, he beat the S&P by 61.1%. His funds had gross gains of $8.4 billion in 2010. Though he specializes in risk and merger arbitrage, he invests in other stocks as well. Paulson has stated that his most important investment principle is to avoid losing money and minimize risk. In July of 2010, he said he was going to scale back the risk across all of its funds. In his investor letter for the end of 2010, Paulson noted that he believes the economy is trending toward stabilization, and said he did not want to be under-invested during this phase.
The highest growth stocks in Paulson’s portfolio are: Teva Pharmaceutical Industries Ltd. (TEVA, Financial), Quest Software Inc. (QSFT, Financial), Mylan Inc. (MYL, Financial), BlackRock Inc. (BLK, Financial), Apollo Group Inc. (APOL, Financial) and Comcast Corp. (CMCSA, Financial)
Teva Pharmaceutical Industries Ltd. (TEVA)
Teva Pharmaceuticals Industries Ltd., develops, manufactures and markets generic pharmaceuticals. It has a market cap of $42.2 billion; its shares were traded at around $45.01 with a P/E ratio of 9.9 and P/S ratio of 2.6. The dividend yield of Teva Pharmaceutical Industries Ltd. stocks is 1.9%. GuruFocus rated Teva Pharmaceutical Industries Ltd. the business predictability rank of 2.5-star.
John Paulson first acquired Teva stock in the fourth quarter of 2008 at $42.15 per share, but sold out in the first quarter of 2009 at $43.57 per share. Then, in the fourth quarter of 2010, he acquired 4,450,000 shares at $51.77 per share. Over the last year, the stock has declined 27.9%. Year to date, the stock has declined 13.66% to $45.01.
The stock also plummeted from approximately $49 to approximately $45 from April 20-21. That same day, the company’s largest competitor, Biogen (BIIB), reported that its oral multiple sclerosis drug cut Multiple Sclerosis relapses by 49% after two years compared to placebo. A Teva study for its own MS drug found that it only cut relapses by 23%.
While the news does not bode well for Teva, the company has had amazing growth in recent years. In 2001, it had net income of $278 million, and in 2010, that number had grown to $3.33 billion. Teva had an annual average earnings growth of 37.1% over the past 10 years and annual average revenue growth of 32%. Over the last 12 months, it had earnings growth of 36% and revenue growth of 11.9%.
Teva Pharmaceutical Industries Ltd. is also in the portfolios of Lee Ainslie, Tom Gayner, James Barrow, Mario Gabelli, George Soros and John Griffin.
Quest Software Inc. (QSFT)
Quest Software Inc. provides application and information availability software solutions that enhance the performance and reliability of an organization's e-business, enterprise and custom applications and enable the delivery of information across the entire enterprise. Quest Software Inc. has a market cap of $2.31 billion; its shares were traded at around $24.85 with a P/E ratio of 21.1 and P/S ratio of 3. GuruFocus rated Quest Software Inc. the business predictability rank of 3-star.
Paulson first acquired this stock in the third quarter of 2010, buying 1,200,000 shares at $20.89 per share. In the fourth quarter of 2010, he bought 200,000 shares at $26.2 per share. The stock has risen 35.94% since the last year, but fallen 10.42% year to date.
Quest Software Inc. had an annual average earnings growth of 27.1% over the past 10 years, and annual average revenue growth of 14.5%. Over the last 12 months, it had earnings growth of 43.3% and revenue growth of 12.9%.
Quest Software’s net income grew every quarter in 2010 – from $15.61 million in the first to $30.27 million in the fourth. Fourth quarter net income was down from $37.02 million in the same quarter a year prior.
Quest Software Inc. is also in the portfolios of Mario Gabelli and George Soros.
Mylan Inc. (MYL)
Mylan Inc. is one of the world's quality generic and specialty pharmaceutical companies. Mylan Inc. has a market cap of $10.78 billion; its shares were traded at around $24.66 with a P/E ratio of 15.3 and P/S ratio of 2.
Paul purchased 11,370,100 shares of Mylan Inc. stock in the first quarter of 2010 at an average price of $19.78. In the second quarter of 2010, he increased his position 163.85%, purchasing 18,628,900 more shares at $20.23. He now owns 30,000,000 shares that account for 2.17% of his portfolio.
In the last 12 months, it had a revenue decline of 2.2%, and earnings growth of 31.4%.
Its fourth-quarter net income declined to $19.85 million from $143 million the previous quarter, and from $38.9 million the same quarter the year prior.
Mylan stock has had an outstanding year; it rose 16.7% year to date. Over the last 12 months, it has risen 13.38%. The company has produced numerous innovations. In April alone, it launched a generic version of Famvir tablets, a generic version of Sandostatin, and received approval for a generic version of Xalatan ophthalmic solution.
Mylan Inc. is also in the portfolio of Mario Gabelli; George Soros and David Dreman sold out last year.
BlackRock Inc. (BLK)
BlackRock Inc. is one of the largest investment management firms in the United States. Blackrock Inc. has a market cap of $38.02 billion; its shares were traded at around $198.88 with a P/E ratio of 18.2 and P/S ratio of 4.3. The dividend yield of Blackrock Inc. stocks is 2.8%. GuruFocus rated Blackrock Inc. the business predictability rank of 4-star.
John Paulson first purchased this stock in the fourth quarter of 2010. He bought 2,000,000 shares at $174.53 per share. BlackRock now accounts for 1.3% of his portfolio.
The company’s stock price today is near to where it was 12 months ago.
BlackRock Inc. had an annual average earnings growth of 25.1% over the past 10 years and average revenue growth of 24.6% over the past 10 years. It had earnings growth of 72.2% over the last 12 months, and revenue growth of 48.8% over the last 12 months.
In the first quarter of 2011, the company posted net income of $568 million, or $2.89 per share, compared with $423 million, or $2.17 per share, in the same quarter a year ago. BlackRock manages $3.65 trillion in assets as of March 31, an 8% increase from last year. The company attributes the rise to a $231 million increase in investment advisory, administration fees and securities lending. The company also had a $100 billion improvement in market and investment performance, and gained new assets by obtaining $34.7 billion in new business through long-term products such as stocks, bonds and alternative investments.
BlackRock Inc. stock is also in the portfolios of George Soros, Lee Ainslie, Andreas Halvorsen, Robert Olstein, John Griffin and Mario Gabelli.
Apollo Group Inc. (APOL)
Apollo Group, Inc. has been providing higher education to working adults for over 25 years. Apollo Group Inc. has a market cap of $5.68 billion; its shares were traded at around $39.8 with a P/E ratio of 7.3 and P/S ratio of 1.2. GuruFocus rated Apollo Group Inc. the business predictability rank of 4-star.
John Paulson purchased 829,000 shares of Apollo Group at an average purchase price per share of $61.96 in the fourth quarter of 2009. He acquired 771,000 more shares at an average of $61.26 per share in the first quarter of 2010, and sold 250,200 shares at an average price of $38.89 per share in the fourth quarter of 2010. Over the last 12 months, the stock has fallen 38.4%, and has barely changed year to date.
Apollo Group had annual average earnings growth of 23.8% over the past 10 years, annual average revenue growth of 23.6% over the past 10 years. Over the past 12 months, it had revenue growth of 17.5% and earnings growth of 27%.
In the quarter ended Feb. 28, 2011, the company lost $64.04 million, compared to a gain of $92.61 million the year prior, and a gain of $235 million the quarter ended Nov. 31, 2010. The company announced that its degreed student enrollment decreased 11.6% in the second quarter compared to the year-ago quarter, primarily due to a new degreed student enrollment decrease of 44.9% from the prior year period.
Apollo stated that it believes the decline in enrollment is “primarily the result of the operational changes and initiatives it has implemented to more effectively support students and improve educational outcomes, including changes in the manner in which admissions and other employees are evaluated and compensated, the full implementation of University Orientation, and the continued refinement of the Company’s marketing approaches to more effectively identify students who have a greater likelihood to succeed in University of Phoenix’s educational programs. Also contributing to the decrease in consolidated net revenue was a $6.4 million decrease in net revenue at Apollo Global in the second quarter compared to the prior year period, due to lower student enrollment at BPP and UNIACC.”
Apollo Group is also in the portfolios of Andreas Halvorsen, Joel Greenblatt, Ronald Muhlenkamp, Richard Pzena, Donald Yacktman, Ruane Cunniff, George Soros, Lee Ainslie, Mark Hillman, John Rogers, Wallace Weitz and David Dreman.
Comcast Corp. (CMCSA)
Comcast Corp. is among the world's largest communication companies. It provides basic cable, digital cable and high-speed Internet services. Comcast Corp. has a market cap of $70.36 billion; its shares were traded at around $25.34 with a P/E ratio of 19.5 and P/S ratio of 1.8. The dividend yield of Comcast Corp. stocks is 1.9%. GuruFocus rated Comcast Corp. the business predictability rank of 2-star.
Paulson first acquired Comcast stock in the fourth quarter of 2009, buying 44,000,000 shares at an average price of $25.78. In the third quarter of 2010, he sold 4,000,000 shares for $18.25 per share. He has since been holding 40,000,000 shares. Over past 12 months, the stock is up 34.79%, and year to date, is up 15.34%. On April 6, 2011, the company announced it would accelerate the rate at which is repurchases $2.1 billion of shares and increase its annual dividend 19% to $0.45 per share.
Comcast Corp. had an annual average earnings growth of 21.4% over the past 10 years, and annual average revenue growth of 17.5%. In the last 12 months, it had earnings growth of 8% and revenue growth of 8%.
In the fourth quarter of 2010, the company’s net income rose to $1 billion from $867 million in the previous quarter and $955 million in the same quarter a year ago.
Comcast Inc. stock is also in the portfolios of Dodge & Cox, Daniel Loeb, Lee Ainslie, George Soros and Mario Gabelli.
The highest growth stocks in Paulson’s portfolio are: Teva Pharmaceutical Industries Ltd. (TEVA, Financial), Quest Software Inc. (QSFT, Financial), Mylan Inc. (MYL, Financial), BlackRock Inc. (BLK, Financial), Apollo Group Inc. (APOL, Financial) and Comcast Corp. (CMCSA, Financial)
Teva Pharmaceutical Industries Ltd. (TEVA)
Teva Pharmaceuticals Industries Ltd., develops, manufactures and markets generic pharmaceuticals. It has a market cap of $42.2 billion; its shares were traded at around $45.01 with a P/E ratio of 9.9 and P/S ratio of 2.6. The dividend yield of Teva Pharmaceutical Industries Ltd. stocks is 1.9%. GuruFocus rated Teva Pharmaceutical Industries Ltd. the business predictability rank of 2.5-star.
John Paulson first acquired Teva stock in the fourth quarter of 2008 at $42.15 per share, but sold out in the first quarter of 2009 at $43.57 per share. Then, in the fourth quarter of 2010, he acquired 4,450,000 shares at $51.77 per share. Over the last year, the stock has declined 27.9%. Year to date, the stock has declined 13.66% to $45.01.
The stock also plummeted from approximately $49 to approximately $45 from April 20-21. That same day, the company’s largest competitor, Biogen (BIIB), reported that its oral multiple sclerosis drug cut Multiple Sclerosis relapses by 49% after two years compared to placebo. A Teva study for its own MS drug found that it only cut relapses by 23%.
While the news does not bode well for Teva, the company has had amazing growth in recent years. In 2001, it had net income of $278 million, and in 2010, that number had grown to $3.33 billion. Teva had an annual average earnings growth of 37.1% over the past 10 years and annual average revenue growth of 32%. Over the last 12 months, it had earnings growth of 36% and revenue growth of 11.9%.
Teva Pharmaceutical Industries Ltd. is also in the portfolios of Lee Ainslie, Tom Gayner, James Barrow, Mario Gabelli, George Soros and John Griffin.
Quest Software Inc. (QSFT)
Quest Software Inc. provides application and information availability software solutions that enhance the performance and reliability of an organization's e-business, enterprise and custom applications and enable the delivery of information across the entire enterprise. Quest Software Inc. has a market cap of $2.31 billion; its shares were traded at around $24.85 with a P/E ratio of 21.1 and P/S ratio of 3. GuruFocus rated Quest Software Inc. the business predictability rank of 3-star.
Paulson first acquired this stock in the third quarter of 2010, buying 1,200,000 shares at $20.89 per share. In the fourth quarter of 2010, he bought 200,000 shares at $26.2 per share. The stock has risen 35.94% since the last year, but fallen 10.42% year to date.
Quest Software Inc. had an annual average earnings growth of 27.1% over the past 10 years, and annual average revenue growth of 14.5%. Over the last 12 months, it had earnings growth of 43.3% and revenue growth of 12.9%.
Quest Software’s net income grew every quarter in 2010 – from $15.61 million in the first to $30.27 million in the fourth. Fourth quarter net income was down from $37.02 million in the same quarter a year prior.
Quest Software Inc. is also in the portfolios of Mario Gabelli and George Soros.
Mylan Inc. (MYL)
Mylan Inc. is one of the world's quality generic and specialty pharmaceutical companies. Mylan Inc. has a market cap of $10.78 billion; its shares were traded at around $24.66 with a P/E ratio of 15.3 and P/S ratio of 2.
Paul purchased 11,370,100 shares of Mylan Inc. stock in the first quarter of 2010 at an average price of $19.78. In the second quarter of 2010, he increased his position 163.85%, purchasing 18,628,900 more shares at $20.23. He now owns 30,000,000 shares that account for 2.17% of his portfolio.
In the last 12 months, it had a revenue decline of 2.2%, and earnings growth of 31.4%.
Its fourth-quarter net income declined to $19.85 million from $143 million the previous quarter, and from $38.9 million the same quarter the year prior.
Mylan stock has had an outstanding year; it rose 16.7% year to date. Over the last 12 months, it has risen 13.38%. The company has produced numerous innovations. In April alone, it launched a generic version of Famvir tablets, a generic version of Sandostatin, and received approval for a generic version of Xalatan ophthalmic solution.
Mylan Inc. is also in the portfolio of Mario Gabelli; George Soros and David Dreman sold out last year.
BlackRock Inc. (BLK)
BlackRock Inc. is one of the largest investment management firms in the United States. Blackrock Inc. has a market cap of $38.02 billion; its shares were traded at around $198.88 with a P/E ratio of 18.2 and P/S ratio of 4.3. The dividend yield of Blackrock Inc. stocks is 2.8%. GuruFocus rated Blackrock Inc. the business predictability rank of 4-star.
John Paulson first purchased this stock in the fourth quarter of 2010. He bought 2,000,000 shares at $174.53 per share. BlackRock now accounts for 1.3% of his portfolio.
The company’s stock price today is near to where it was 12 months ago.
BlackRock Inc. had an annual average earnings growth of 25.1% over the past 10 years and average revenue growth of 24.6% over the past 10 years. It had earnings growth of 72.2% over the last 12 months, and revenue growth of 48.8% over the last 12 months.
In the first quarter of 2011, the company posted net income of $568 million, or $2.89 per share, compared with $423 million, or $2.17 per share, in the same quarter a year ago. BlackRock manages $3.65 trillion in assets as of March 31, an 8% increase from last year. The company attributes the rise to a $231 million increase in investment advisory, administration fees and securities lending. The company also had a $100 billion improvement in market and investment performance, and gained new assets by obtaining $34.7 billion in new business through long-term products such as stocks, bonds and alternative investments.
BlackRock Inc. stock is also in the portfolios of George Soros, Lee Ainslie, Andreas Halvorsen, Robert Olstein, John Griffin and Mario Gabelli.
Apollo Group Inc. (APOL)
Apollo Group, Inc. has been providing higher education to working adults for over 25 years. Apollo Group Inc. has a market cap of $5.68 billion; its shares were traded at around $39.8 with a P/E ratio of 7.3 and P/S ratio of 1.2. GuruFocus rated Apollo Group Inc. the business predictability rank of 4-star.
John Paulson purchased 829,000 shares of Apollo Group at an average purchase price per share of $61.96 in the fourth quarter of 2009. He acquired 771,000 more shares at an average of $61.26 per share in the first quarter of 2010, and sold 250,200 shares at an average price of $38.89 per share in the fourth quarter of 2010. Over the last 12 months, the stock has fallen 38.4%, and has barely changed year to date.
Apollo Group had annual average earnings growth of 23.8% over the past 10 years, annual average revenue growth of 23.6% over the past 10 years. Over the past 12 months, it had revenue growth of 17.5% and earnings growth of 27%.
In the quarter ended Feb. 28, 2011, the company lost $64.04 million, compared to a gain of $92.61 million the year prior, and a gain of $235 million the quarter ended Nov. 31, 2010. The company announced that its degreed student enrollment decreased 11.6% in the second quarter compared to the year-ago quarter, primarily due to a new degreed student enrollment decrease of 44.9% from the prior year period.
Apollo stated that it believes the decline in enrollment is “primarily the result of the operational changes and initiatives it has implemented to more effectively support students and improve educational outcomes, including changes in the manner in which admissions and other employees are evaluated and compensated, the full implementation of University Orientation, and the continued refinement of the Company’s marketing approaches to more effectively identify students who have a greater likelihood to succeed in University of Phoenix’s educational programs. Also contributing to the decrease in consolidated net revenue was a $6.4 million decrease in net revenue at Apollo Global in the second quarter compared to the prior year period, due to lower student enrollment at BPP and UNIACC.”
Apollo Group is also in the portfolios of Andreas Halvorsen, Joel Greenblatt, Ronald Muhlenkamp, Richard Pzena, Donald Yacktman, Ruane Cunniff, George Soros, Lee Ainslie, Mark Hillman, John Rogers, Wallace Weitz and David Dreman.
Comcast Corp. (CMCSA)
Comcast Corp. is among the world's largest communication companies. It provides basic cable, digital cable and high-speed Internet services. Comcast Corp. has a market cap of $70.36 billion; its shares were traded at around $25.34 with a P/E ratio of 19.5 and P/S ratio of 1.8. The dividend yield of Comcast Corp. stocks is 1.9%. GuruFocus rated Comcast Corp. the business predictability rank of 2-star.
Paulson first acquired Comcast stock in the fourth quarter of 2009, buying 44,000,000 shares at an average price of $25.78. In the third quarter of 2010, he sold 4,000,000 shares for $18.25 per share. He has since been holding 40,000,000 shares. Over past 12 months, the stock is up 34.79%, and year to date, is up 15.34%. On April 6, 2011, the company announced it would accelerate the rate at which is repurchases $2.1 billion of shares and increase its annual dividend 19% to $0.45 per share.
Comcast Corp. had an annual average earnings growth of 21.4% over the past 10 years, and annual average revenue growth of 17.5%. In the last 12 months, it had earnings growth of 8% and revenue growth of 8%.
In the fourth quarter of 2010, the company’s net income rose to $1 billion from $867 million in the previous quarter and $955 million in the same quarter a year ago.
Comcast Inc. stock is also in the portfolios of Dodge & Cox, Daniel Loeb, Lee Ainslie, George Soros and Mario Gabelli.
