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John Paulson Takes Giant Stakes in 3 Companies

February 18, 2014 | About:
Holly LaFon

Holly LaFon

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After several years of middling returns, the Paulson Recovery fund recovered. It was the third top-returning large hedge fund in 2013, returning 45%, compared to 4.9% last year, according to Bloomberg.

John Paulson (Trades, Portfolio) in the fourth quarter also bought 16 new stocks, and holds 87 in total, in a portfolio valued at $20.3 billion. The new buys include massive stakes in three companies.

Extended Stay America Inc. (STAY)

Paulson revealed owning a stake of 55,711,591 Extended Stay America Inc. shares, sized at 27.2% of the company’s shares outstanding and 7.2% of Paulson’s portfolio.

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Extended Stay America held its initial public offering of 28,250,000 paired shares on Nov. 13, 2013. The company expected to raise $531.1 million from the offering which it would use to pay down debt. Its share price has appreciated 11% since the offering, trading around $26.49 on Tuesday.

Extended Stay America Inc. has a market cap of $5.42 billion; its shares were traded at around $26.49 with a P/E ratio of 98.10 and P/S ratio of 4.10. Extended Stay America Inc. had an annual average earnings growth of 15.10% over the past five years.

Houghton Mifflin Harcourt Company (HMHC)

Paulson reported a stake of 30,912,558 shares of Houghton Mifflin Harcourt Company, sized at 2.6% of his portfolio, and 22.09% of the company.

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Houghton Mifflin also held an IPO on Nov. 14, 2013, selling 18.25 million shares of the company, priced at $12 a share. Its share price has since gained 22.76% to trade around $19.47 on Tuesday.

Houghton Mifflin Harcourt Company has a market cap of $2.73 billion; its shares were traded with and P/S ratio of 2.0.

American Airlines Group Inc. (AAL)

Finally, Paulson reported owning 8.5 million shares of American Airlines Group, worth 1.1% of his portfolio.

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American Airlines changed its ticker symbol on Dec. 9, 2013, when it merged with US Airways. Its shares have gained almost 40% since the merger, to trade around $34.31 on Tuesday.

The company has a market cap of $11.51 billion, with a P/E of 10.3 and P/S of 0.2.

For more John Paulson (Trades, Portfolio) stocks, visit his portfolio here. Not a Premium Member of GuruFocus? Try it free for 7 days here!


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