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Daniel Loeb's Third Point Enters CSX Position, Exits Alphabet and Upstart

Activist investor's firm releases 1st-quarter portfolio

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May 19, 2022
Summary
  • Firm takes new position in CSX and Alcoa.
  • Firm slashes Amazon stake and exits positions in Alphabet, Upstart and Accenture.
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Daniel Loeb (Trades, Portfolio), manager of Third Point Offshore, disclosed in a regulatory filing that his firm’s top trades during the first quarter included new holdings in CSX Corp. (CSX, Financial) and Alcoa Corp. (AA, Financial), a 90% reduction to its stake in Amazon.com Inc. (AMZN, Financial) and the closure of its positions in Alphabet Inc. (GOOGL, Financial), Upstart Holdings Inc. (UPST, Financial) and Accenture PLC (ACN, Financial).

The New York-based firm follows an event-driven, value-oriented investing style. Third Point identifies situations in which a catalyst can unlock shareholder value and pushes for changes to achieve said value.

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As of March, the firm’s $7.68 billion 13F equity portfolio contains 75 stocks, with 10 new positions and a quarterly turnover ratio of 15%. The top four sectors in terms of weight are technology, health care, utilities and basic materials, representing 24.95%, 20.73%, 13.11% and 11.78% of the equity portfolio.

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Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.

CSX

Third Point invested in 7,386,378 shares of CSX Corp. (

CSX, Financial), giving the stake 3.60% weight in its equity portfolio. Shares averaged $35.38 during the first quarter; the stock is modestly undervalued based on Wednesday’s price-to-GF Value ratio of 0.86.

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The Jacksonville, Florida-based transportation company has a GF Score of 90 out of 100 based on a momentum rank of 10 out of 10, a profitability rank of 9 out of 10, a growth rank of 8 out of 10, a GF Value rank of 7 out of 10 and a financial strength rank of 5 out of 10.

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Other gurus with holdings in CSX include

Ken Fisher (Trades, Portfolio)’s Fisher Investments and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.

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Alcoa

The firm purchased 2.375 million shares of Alcoa (

AA, Financial), giving the position 2.78% of equity portfolio space.

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Shares of Alcoa averaged $72.54 during the first quarter; the stock is significantly overvalued based on Thursday’s price-to-GF Value ratio of 2.62.

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The Pittsburgh-based aluminum mining company has a GF Score of 66 out of 100, driven by a financial strength rank of 7 out of 10 and a rank of 6 out of 10 for profitability and momentum despite growth ranking just 4 out of 10 and GF Value ranking just 1 out of 10.

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Amazon.com

The firm sold 217,500 shares of Amazon.com (

AMZN, Financial), slicing 92.55% of the position and 5.06% of its equity portfolio.

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Although shares of Amazon.com (

AMZN, Financial) averaged $3,092.09 during the first quarter; the stock traded around $2,187.46 on Thursday. The stock is significantly undervalued based on Thursday’s price-to-GF Value ratio of 0.58.

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The Seattle-based e-commerce giant has a GF Score of 95 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a GF Value rank of 8 out of 10, a momentum rank of 7 out of 10 and a financial strength rank of 6 out of 10.

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Gurus with holdings in Amazon include

Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A)(BRK.B) and Baillie Gifford (Trades, Portfolio).

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Alphabet

The firm sold all 212,000 Class A shares of Alphabet (

GOOGL, Financial), trimming 4.29% of its equity portfolio.

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While shares averaged $2,175.99 during the first quarter, Class A shares of Alphabet traded around $2,228.17 on Thursday. The stock is modestly undervalued based on Thursday’s price-to-GF Value ratio of 0.82.

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The Mountain View, California-based online search giant has a GF Score of 100 out of 100, driven by a rank of 10 out of 10 for profitability, growth and momentum and a rank of 9 out of 10 for financial strength and GF Value.

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Loeb said in his first-quarter shareholder letter that his firm shifted into a more defensive posture during the past four months, reflecting Third Point’s concerns about interest rates, geopolitical uncertainty and “emerging weakness in important global economies.”

Upstart

The firm sold all 4 million shares of Upstart (

UPST, Financial), curbing 4.23% of its equity portfolio. Shares of Upstart averaged $115.38 during the first quarter.

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The San Mateo, California-based credit service company has a GF Score of 18 out of 100 based on a profitability rank of 1 out of 10 and a financial strength rank of 4 out of 10. Despite this, the stock does not have enough data to compute a rank for growth, GF Value or momentum and thus, the GF Score may give an incomplete picture of the company’s potential.

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Accenture

The firm sold all 1.25 million shares of Accenture (

ACN, Financial), reducing its equity portfolio by 3.62%. Shares averaged $337.27 during the first quarter; the stock is modestly undervalued based on Thursday’s price-to-GF Value ratio of 0.87.

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The Dublin, Ireland-based information technology service company has a GF Score of 99 out of 100, driven by a rank of 10 out of 10 for profitability, growth and momentum even though financial strength and GF Value rank just between 7 and 8 out of 10.

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I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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