Daniel Loeb´s Third Point disclosed an equity portfolio valued at some $9.86 billion at the end of the fourth quarter of 2015. The equity portfolio is mainly invested in Health Care (53%), Materials (17%) and Consumer Discretionary (11%) stocks.
Among the 10 largest holdings from Loeb’s equity portfolio (which compose 82.43% of the total portfolio value) at the end of the fourth quarter, the three top positions are Baxter International Inc. (BAX, Financial), Allergan PLC (AGN, Financial) and Amgen Inc. (AMGN, Financial).
Despite having reduced its weight by 9%, Third Point still held 14.9% of its portfolio in Amgen with 9.04 million shares. The value of the stake amounts to $1.47 million. Another prominent investor long in the stock is D.E. Shaw with 2.53 million shares, valued at $410,247 held as of the end of the fourth quarter.
With a market cap of $112.42 billion, the stock is down by 8% on a year-to-date basis. The company has made significant efforts investing in efficient manufacturing. Also, it has implemented a cost-cutting program with the aim of enlarging margins. Moreover, the acquisition of Decode should enhance the firm’s detections of new drug targets.
Allergan represents the second-most valuable investment in the fund’s portfolio. After a 48% increase in the company’s stake during the last quarter, the fund amounted to about 5.4 million shares valued at $1.69 billion. The company (which was Actavis previously) has made several acquisitions to become a pharmaceutical contender. The merger with Pfizer (PFE, Financial) should boost operations despite some government actions to cancel the deal. The stock has dropped by 10% in the past 12 months. Further, the stock’s total return is at a negative 12% on a year-to-date basis, compared to roughly 15% for Novartis AG (NVS, Financial) or 17% for Teva Pharmaceutical (TEVA, Financial).
At the end of the quarter, several investors such as Eric Mindich (Trades, Portfolio), David Tepper (Trades, Portfolio), Steven Cohen (Trades, Portfolio), John Hussman (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio), Ron Baron (Trades, Portfolio), David Einhorn (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) have initiated new positions in the stock.
In the first spot, we’ve got Baxter International, in which the fund held about 53.9 million shares valued at $2.05 billion at the end of December. Unlike the previous ones, Baxter’s stock is gaining ground this year, about 8%.
After the spinoff of Baxalta (BXLT, Financial), the company is facing an active challenge to increase profitability. Some competitive advantages, such as the dialysis and hospital markets, will mitigate that risk, and the firm could gain margin expansion in the future. Due to its leader position, because it usually occupies the first or second spot in the markets in which it competes, as well as new product launches, Baxter's profitability should be enhanced. Moreover, growing markets such as emerging markets, are critical for long-term expansion. More than half of Baxter's sales are in international markets, and emerging markets are growing in nearly half of them.
Ken Griffin’s Citadel Investment Group was the third-largest shareholder with a stake of 7.55 million shares of Baxter valued at $287.97 million, having upped his stake by 418% during the October-December period.
Disclosure: As of this writing, Omar Venerio did not hold a position in any of the aforementioned stocks.
