Activist investor Daniel Loeb (Trades, Portfolio) founded hedge fund Third Point LLC in 1995, which today manages about $17 billion in assets. The firm’s strategy involves identifying situations with a catalyst that will unlock value.
Loeb is well-known for penning scathing public letters to CEOs and companies he disapproves of, prompting Vanity Fair to publish excerpts of his top 10 letters in a 2013 feature.
During the second quarter, Loeb disclosed 14 new stakes in his portfolio; the largest three stakes are as follows.
Loeb initiated a new position in wireless carrier T-Mobile, purchasing 1 million shares at an average price of $35.83 per share. The stock has risen 46% over the past year, closing at $41.23 on Aug. 14 with a P/E ratio of 123.8.
In the second quarter, T-Mobile reported earnings per share of $0.42, up from loss per share of $0.02 in the year-ago quarter. After reporting large losses in 2012, net income in 2014 was $247 million, the second-highest recorded profit over the past 15 years.
According to a J.D. Power study from July to December 2013, T-Mobile made the largest stride to improve customer satisfaction among wireless carriers. Jim Simons (Trades, Portfolio) also added a position in the company during the second quarter, while Andreas Halvorsen (Trades, Portfolio) and Manning & Napier sold their stakes.
Sealed Air Corp (SEE, Financial)
Loeb also purchased 4,850,000 shares of Sealed Air Corp at an average price of $48.06 per share. Sealed Air provides products for food safety and security, facility hygiene and product protection. It serves end markets such as food and beverage processing, retail, healthcare and industrial.
The stock rose 55% over the past year and closed at $55.03 on Aug. 14, with a current P/E ratio of 46.3. EPS during the second quarter was $0.13, down from $0.28 in the year-ago quarter.
Another cause for concern is the company had negative free cash flow for the first time in 2014, with cash flow of $-356 million.
Devon Energy Corp (DVN, Financial)
He bought 3,750,000 shares of Devon Energy, which explores for oil and natural gas in the U.S. and Canada, at an average price of $64.64 per share.
Over the past year, the stock price has dropped 37%, closing at $46.06 on Aug. 14 with a forward P/E of 30.77. Devon Energy reported loss per share of $6.94 during the second quarter, down from earnings of $1.64 per share during Q2 2014.
The company pays a dividend yield of 2.08%, which is close to the 10-year high, while the payout ratio is 24%.
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