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Daniel Loeb's Fourth Quarter Top Five Highlighted by AIG and FedEx

February 17, 2014 | About:
Monica Wolfe

Monica Wolfe

127 followers
Daniel Loeb, the founder of the hedge fund Third Point LLC, is oftentimes known for his activist investing. The guru likes to buy such a sizeable portion of a company in order for him to make changes to the company’s structure. The guru has an excellent track record for this style of investing and is fairly well-known in the finance world for writing public letters to the boards of companies in which he expresses disapproval of the performance and workings of a company.

During the third quarter, Loeb purchased shares in 16 new companies bringing his total portfolio to 45 stocks. The value of his third quarter is at $5.8 billion. The following five companies are the guru's largest holdings as of the third quarter.

American International Group (AIG)

Loeb’s largest position is in American International Group where the guru holds on to 7,500,000 shares of the company’s stock. Loeb’s holdings make up for 6.6% of his total portfolio as well as 0.51% of AIG’s shares outstanding.

Daniel Loeb (Trades, Portfolio) cut his holdings -25% by selling 2,500,000 shares of the company’s stock. His sold these shares near the estimated average quarterly price of $49.85 per share. Since then the price per share has dropped approximately -1.7%.

Loeb’s historical holding history:

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American International Group is a holding company which, through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad.

AIG’s historical revenue and net income:

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The analysis on AIG reports that the company’s dividend yield is near a 10-year low, its revenue has been in decline over the past five years and its P/S ratio is nearing a 5-year high.

The Peter Lynch Chart suggests that the company is currently overvalued:

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American International Group has a market cap of $72.6 billion. Its shares are currently trading at around $49.31 with a P/E ratio of 23.40, a P/S ratio of 1.10 and a P/B ratio of 0.70.

FedEx Corporation (FDX)

The guru’s second largest position is in FedEx Corporation where he maintains 2,500,000 shares of the company’s stock. His holdings make up for 6.2% of his total portfolio and 0.79% of the company’s shares outstanding.

Loeb made his initial buy in to FedEx over the course of the third quarter. The guru increased his position 25% over the past quarter by purchasing 500,000 shares. He added those shares near the estimated average quarterly price of $132.42 per share. Since then the price per share has increased approximately 1.1%.

Loeb’s historical holding history:

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FedEx Corporation provides a portfolio of transportation, e-commerce and business services. It operates in four business segments: FedEx Express, FedEx Ground, FedEx Freight and FedEx Services.

FedEx’s historical revenue and net income:

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The Peter Lynch Chart suggests that the company is currently overvalued:

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FedEx has a market cap of $43.39 billion. Its shares are currently trading at around $137.04 with a P/E ratio of 27.40, a P/S ratio of 1.00 and a P/B ratio of 2.50. The company had an annual average earnings growth of 2.90% over the past 10 years.

GuruFocus rated FedEx the business predictability rank of 2.5-star.

Dow Chemical (DOW)

The guru’s third largest holding goes to Dow Chemical, a new buy for the company. He purchased a total of 7,725,000 shares over the fourth quarter. His new holding makes up for 5.9% of his total holdings as well as 0.64% of the company’s shares outstanding. The guru purchased these new shares near the estimated average quarterly price of $40.47 per share.

Loeb’s historical holding history:

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is engaged in the manufacture and sale of chemicals, plastic materials, agricultural products and services, advanced materials and other specialized products and services. It is also engaged in the property and casualty insurance and reinsurance business mainly through its Liana Limited subsidiaries.

Dow Chemical’s historical revenue and net income:

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The analysis on the company reports that the company’s revenue has been in decline over the past five years, its price is near a 5-year high and its operating margin is expanding.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Dow Chemical has a market cap of $56.65 billion. Its shares are currently trading at around $46.71 with a P/E ratio of 21.10 and a P/S ratio of 1.00.

Sothebys (BID)

Daniel Loeb’s fourth largest holding is in Sothebys where the guru maintains 6,350,000 shares of the company’s stock. His position makes up for 5.8% of his total portfolio and 9.29% of the company’s shares outstanding.

During the third quarter Loeb upped his stake 3.25% by purchasing 200,000 of the company’s stock. He bought these shares near the estimated average quarterly price of $51.49 per share, and since then the price per share has dropped -9.5%.

Loeb’s holding history as of the most recent quarter:

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Sothebys is an auctioneer of authenticated fine art, antiques and decorative art, jewelry and collectibles. The company's operations are organized into three business segments: Auction, Finance and Dealer.

The historical revenue and net income of Sothebys:

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The analysis on Sothebys reports that the company’s operating margin is expanding, its revenue has slowed down over the past year, its price is nearing a 5-year high and its P/S ratio is nearing a 10-year high.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Sothebys has a market cap of $3.56 billion. Its shares are currently trading at around $51.82 with a P/E ratio of 34.00, a P/S ratio of 4.40 and a P/B ratio of 3.40. The company had an average earnings growth of 12.70% over the past ten years.

Yahoo! Inc (YHOO)

Daniel Loeb’s largest holding is in Yahoo! where he holds on to 8,000,000 shares of the company’s stock. The guru’s holdings make up for 5.6% of his total portfolio and 0.78% of the company’s shares outstanding.

During the fourth quarter Loeb made a notable slice of his stake in Yahoo. The guru reduced his holdings -50% by selling 8 million shares of the company’s stock. He sold these shares near the estimated average quarterly price of $35.87. Since then the price per share has increased approximately 6.6%.

Loeb’s historical holding history of Yahoo:

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Loeb began cutting his position in Yahoo on July 22, as the company announced that they would be repurchasing over 40 million shares from the guru’s fund, Third Point. The purchase price equaled the closing price of Yahoo! common stock on July 19 which was roughly $29.11 per share.

Yahoo! is a digital media company. Through its proprietary technology and insights, it delivers personalized digital content and experiences, across devices and around the globe, to various audiences.

Yahoo’s historical revenue and net income:

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The analysis on Yahoo! reports that the company’s price is currently trading at around a 5-year high, its revenue has been in decline over the past five years and its operating margin has been expanding.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Yahoo! has a market cap of $36.94 billion. Its shares are currently trading at around $36.41 with a P/E ratio of 31.30, a P/S ratio of 8.40 and a P/B ratio of 3.00. The company had an annual average earnings growth of 51.30% over the past five years.

Check out Daniel Loeb’s complete fourth quarter portfolio here.

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