Daniel Loeb Likes These Low-P/E, Undervalued Companies: HFC, CVR, CE, CXS, XRM
The firm’s hedge funds include Third Point Partners, Third Point Opportunities Master Fund, Third Point Ultra Master Fund and Third Point Resources. He also holds a capital venture, Third Point Ventures.
Third Point’s Master Fund has had a cumulative gain of 64% for the last five years. For the past 10 years, it gained 315%. Its performance is outstanding.
The fund holds 65 positions represented as follows: 40% in large caps, 35% in mid-caps and the remaining 25% in small-cap equities. Third Point Portfolio is present in several sectors where it has increased and reduced its positions, making good deals.
In the technology sector, Loeb's position has remained stable, $260 million through some restructuring and reshuffling. In the consumer cyclical sector, Third Point added $83 million to its $25 million position.
I found very compelling to study which Dan Loeb's stocks have a very low P/E value multiple:
HollyFrontier Corp (HFC): Daniel Loeb kept his position UNCHANGED
HFC is an independent petroleum refiner that owns and operates five refineries that serve the Rockies, Mid-Continent and Southwest with a total crude oil throughput capacity of 443,000 barrels per day. In addition it has a 34% ownership stake in Holly Energy Partners, which owns and operates petroleum product pipelines and terminals principally in the Southwestern United States.
The company is expected to finish 2011 with a debt/capital ratio of about 25%, the lowest in the industry. Its P/E ratio is 3.83.
CVR Energy Inc. (CVI): Daneil Loeb REDUCED his position in the last quarter
CVR ENERGY, INC. is an independent refiner and marketer of high value transportation fuels and, through a limited partnership, a producer of ammonia and urea ammonia nitrate fertilizers. CVR Energy's petroleum business includes full-coking sour crude refinery in Coffeyville, Kan.
In addition, CVR Energy's supporting businesses include a crude oil gathering system serving central Kansas, northern Oklahoma and southwest Nebraska; storage and terminal facilities for asphalt and refined fuels in Phillipsburg and a rack marketing division supplying product to customers through tanker trucks and at throughput terminals.
In terms of its balance sheet, its net income was 109.3 million; in other words, $1.25 per diluted share versus. Adjusted earnings per share were $1.57 and the company has a P/E ratio of 5.66.
CreXus Investment Corp (CXS): Daniel Loeb REDUCED his position in the last quarter
CreXus Investment Corp aquires, manages, and finances, directly or through its subsidiaries, commercial mortgage loans & other commercial real estate debt, commercial mortgage-backed securities & other commercial real estate-related assets.
The company is externally managed by FIDAC which is a wholly owned subsidiary of Annaly Capital Management, Inc. Its mandate is “to provide attractive risk-adjusted returns over the long-term, primarily through dividends and secondarily through capital appreciation.”
Crexus Investment Corp´s stock has become a favorite among investors thanks to the payment of a 9.5% dividend. Furthermore, its P/E ratio is 6.59.
Celanese Corp. (CE) : Daniel Loeb INITIATED A NEW POSITION in this stock
CE is an integrated global producer of value-added industrial chemicals. They are the world's largest producer of acetyl products, including acetic acid, vinyl acetate monomer and polyacetals and a leading global producer of high-performance engineered polymers used in consumer and industrial products and designed to meet highly technical customer requirements.
The company operates in North America, Europe and Asia, including substantial joint ventures in China.
In terms of quarter results, the company has reported adjusted earnings of $1.27 per share. Diluted earnings per share in the quarter were $1.05 per share. Quarterly revenues grew 20% y/y to $1.81 billion, primarily driven by higher pricing across all operating segments and favorable currency impacts. Least but not last, its P/E ratio is 12.95.
Xerium Technologies Inc. (XRM): Daniel Loeb INCREASED his position last quarter
XRM is a leading global manufacturer and supplier of two products used primarily in the production of paper: clothing and roll covers. The company operates around the world under a variety of brand names and owns a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production.
Q3 2011 sales increased 9.1% over Q3 2010 primarily due to increased sales volume and favorable currency. Its P/E ratio is 17.15.
It is expected for both trading liquidity and the Company's market profile to improve, and the unsustainably low valuation to appreciate.