Increasingly, legendary activist investor Daniel Loeb, founder of New York-based hedge fund Third Point LLC, has long locked-in his reputation in the investing world largely by stirring media controversy through his very public shareholder letters that boldly highlight his aggressive attempts to push for change and replenish company board seats.
Case in point, Loeb’s successful proxy contest with Yahoo (YHOO) last year, penning letters mocking, in his words, Yahoo’s “crappy interface” and “stupid logo,” as well as expressing that Yahoo “had one of the most horrendous management teams” he’d ever seen.
Recently, Loeb has also grabbed a position in Herbalife (HLF). While Loeb has not released any public statements as of yet, the purchase came in flawless timing with Pershing Square’s Bill Ackman’s famous short sale of the company, itself creating an outflow of headlines that imply a war between the hedge funds.
Loeb’s bold investment moves make it hard for public interest to turn away from the Guru’s next action.
Loeb’s Third Point Offshore Fund delivered 21.2 percent in returns for 2012. His portfolio contains 40 stocks, with a quarter-over-quarter turnover rate of 45 percent, and a total value of more than $5 billion.
Below are three stocks in Loeb’s portfolio with the highest 10-Year EBITDA growth rates.
UnitedHealth Group Inc. (UNH, Financial)
UnitedHealth Group (UNH) was one of Loeb’s big bet on insurance companies in last year’s second quarter, along with Humana (HUM), Aetna (AET) and Cigna (CI). It is a diversified health care coverage and benefits provider.
In three years, the company has gone up 57.19 percent in market value. Its operating margin has declined by 3.8 percent for five years straight, and it sits at dividend yield of 1.6 percent.
UnitedHealth has a 10-Year EBITDA growth of 19.7 percent, and has Business Predictability rank of 3 Stars. Loeb currently has 2 million shares of UnitedHealth. Purchased at an average price of $57.30 last year, the company’s stock price has gone down about $5. Today it trades at $52.41, up 1.93 percent this afternoon.
Murphy Oil Corp. (MUR, Financial)
Murphy Oil has a 10-Year EBITDA growth rate of 17.4 percent.
The Arkansas-based energy company makes up 5.1 percent of Loeb’s portfolio. In his third quarter letter, Loeb revealed that Third Point initiated its investment following a three-year period which Murphy’s share price declined by 15 percent. The fund suggested Murphy management's four steps towards recovering its share value. These four include spinning off its retail segment, selling its Canadian natural gas assets, selling its 5 percent stake in Syncrude Oil Sands Project and completing the company’s UK Refining Business exit.
Third Point stated in the letter:
“These four transactions could generate pre-tax proceeds of $8.4 - $8.9 billion…Third Point estimates that the associated EBITDA with the assets sales is $750 million or ~20% of our 2013 EBITDA forecast for Murphy. Based on a current enterprise valuation of $10.4 billion, our analysis suggests investors are paying only $2.6 - 3.1 billion for the balance of Murphy’s assets, which we estimate could generate $2.9 billion in EBITDA in 2013. This “new”, slimmed-down Murphy has tremendous upside.”
Loeb paid an average price of $52.94 for the 4.8 million Murphy stocks he purchased in the third quarter or last year. Today the stock trades at $60, down 0.17 percent.
WellPoint Inc. (WLP, Financial)
Loeb bought shares of WellPoint in the third quarter of 2009, and sold out by the beginning of 2010 when the stock’s average price rose from $52 to $62. Loeb picked up the stock again in the second quarter of last year, pursuing 850,000 shares and adding 400,000 more by the following quarter.
Healthcare plan provider WellPoint has a 10-Year EBITDA growth rate of 12.1 percent.
At the end of December, the company wrapped up its acquisition of Amerigroup Corp., another managed care company, enhancing WellPoint’s competitive position in the Dual Eligible and Medicaid markets, anchoring state governments and its program beneficiaries.
WellPoint stock is up 2.98 percent today, trading at $61.85. It remains 1.4 percent of Loeb’s portfolio.
To view Daniel Loeb’s latest trades, visit Stock Picks.
Hurry and Get the GuruFocus 15% Off Premium Membership Deal!
GuruFocus’ long list of Premium Membership perks provides many opportunities to follow your favorite Gurus and stocks more closely. If you are not a Premium Member yet, we invite you to take advantage of our limited-time offer of 15% off our normal Premium Membership rate. Click on GuruFocus Member Discount now!
Case in point, Loeb’s successful proxy contest with Yahoo (YHOO) last year, penning letters mocking, in his words, Yahoo’s “crappy interface” and “stupid logo,” as well as expressing that Yahoo “had one of the most horrendous management teams” he’d ever seen.
Recently, Loeb has also grabbed a position in Herbalife (HLF). While Loeb has not released any public statements as of yet, the purchase came in flawless timing with Pershing Square’s Bill Ackman’s famous short sale of the company, itself creating an outflow of headlines that imply a war between the hedge funds.
Loeb’s bold investment moves make it hard for public interest to turn away from the Guru’s next action.
Loeb’s Third Point Offshore Fund delivered 21.2 percent in returns for 2012. His portfolio contains 40 stocks, with a quarter-over-quarter turnover rate of 45 percent, and a total value of more than $5 billion.
Below are three stocks in Loeb’s portfolio with the highest 10-Year EBITDA growth rates.
UnitedHealth Group Inc. (UNH, Financial)
UnitedHealth Group (UNH) was one of Loeb’s big bet on insurance companies in last year’s second quarter, along with Humana (HUM), Aetna (AET) and Cigna (CI). It is a diversified health care coverage and benefits provider.
In three years, the company has gone up 57.19 percent in market value. Its operating margin has declined by 3.8 percent for five years straight, and it sits at dividend yield of 1.6 percent.
UnitedHealth has a 10-Year EBITDA growth of 19.7 percent, and has Business Predictability rank of 3 Stars. Loeb currently has 2 million shares of UnitedHealth. Purchased at an average price of $57.30 last year, the company’s stock price has gone down about $5. Today it trades at $52.41, up 1.93 percent this afternoon.
Murphy Oil Corp. (MUR, Financial)
Murphy Oil has a 10-Year EBITDA growth rate of 17.4 percent.
The Arkansas-based energy company makes up 5.1 percent of Loeb’s portfolio. In his third quarter letter, Loeb revealed that Third Point initiated its investment following a three-year period which Murphy’s share price declined by 15 percent. The fund suggested Murphy management's four steps towards recovering its share value. These four include spinning off its retail segment, selling its Canadian natural gas assets, selling its 5 percent stake in Syncrude Oil Sands Project and completing the company’s UK Refining Business exit.
Third Point stated in the letter:
“These four transactions could generate pre-tax proceeds of $8.4 - $8.9 billion…Third Point estimates that the associated EBITDA with the assets sales is $750 million or ~20% of our 2013 EBITDA forecast for Murphy. Based on a current enterprise valuation of $10.4 billion, our analysis suggests investors are paying only $2.6 - 3.1 billion for the balance of Murphy’s assets, which we estimate could generate $2.9 billion in EBITDA in 2013. This “new”, slimmed-down Murphy has tremendous upside.”
Loeb paid an average price of $52.94 for the 4.8 million Murphy stocks he purchased in the third quarter or last year. Today the stock trades at $60, down 0.17 percent.
WellPoint Inc. (WLP, Financial)
Loeb bought shares of WellPoint in the third quarter of 2009, and sold out by the beginning of 2010 when the stock’s average price rose from $52 to $62. Loeb picked up the stock again in the second quarter of last year, pursuing 850,000 shares and adding 400,000 more by the following quarter.
Healthcare plan provider WellPoint has a 10-Year EBITDA growth rate of 12.1 percent.
At the end of December, the company wrapped up its acquisition of Amerigroup Corp., another managed care company, enhancing WellPoint’s competitive position in the Dual Eligible and Medicaid markets, anchoring state governments and its program beneficiaries.
WellPoint stock is up 2.98 percent today, trading at $61.85. It remains 1.4 percent of Loeb’s portfolio.
To view Daniel Loeb’s latest trades, visit Stock Picks.
Hurry and Get the GuruFocus 15% Off Premium Membership Deal!
GuruFocus’ long list of Premium Membership perks provides many opportunities to follow your favorite Gurus and stocks more closely. If you are not a Premium Member yet, we invite you to take advantage of our limited-time offer of 15% off our normal Premium Membership rate. Click on GuruFocus Member Discount now!
