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Tiziano Frateschi
Tiziano Frateschi
Articles (1849)  | Author's Website |

John Paulson Trims Stake in Allergan, Time Warner Cable

Event-driven investor's top 4th quarter trades

John Paulson (Trades, Portfolio) established Paulson & Co. Inc. as a merger arbitrage hedge fund manager, seeking to make money from situations when one public company announces plans to take over another. During the fourth quarter, he sold many stocks including the following.

Paulson trimmed his stake in Allergan PLC (AGN) by 22.97%, and the deal had an impact of -2.4% on the portfolio.

The company is engaged in development, manufacturing, marketing, sale and distribution of generic, branded generic, brand name, biosimilar and over-the-counter pharmaceutical products. Fourth quarter net revenue increased 74% and non GAAP diluted EPS grew 33% year over year.

GuruFocus gives the stock a profitability and growth rating of 6 out of 10 with ROE of 5.56% and ROA of 3.21% that is underperforming 55% of the companies in the industry. Financial strength has a rating of 5 out of 10, with a cash-to-debt of 0.03 that is far below the industry median of 2.90.

Vanguard Health Care Fund (Trades, Portfolio) is the largest shareholder of the company among the gurus with 2.78% of outstanding shares, followed by Andreas Halvorsen (Trades, Portfolio) with 1.51%, Daniel Loeb (Trades, Portfolio) with 1.37%, Paul Singer (Trades, Portfolio) with 0.51% and John Griffin (Trades, Portfolio) with 0.51%.

Paulson reduced his stake in Time Warner Cable Inc. (TWC) by 27.75%, and the deal had an impact of –2.16% on the portfolio.

The company provides video, high-speed data and voice services in five geographic areas: New York State, the Carolinas, the Midwest, Southern California and Texas. In the last quarter, revenue grew 4.9% and diluted EPS increased by 12.8% year over year.

GuruFocus gives the stock a profitability and growth rating of 8 out of 10 with ROE of 21.66% and ROA of 3.79% that are outperforming 56% of the companies in the Global Pay TV industry. Financial strength has a rating of 6 out of 10, with cash to debt of 0.05 that is below the industry median of 0.53.

The largest shareholders among the gurus are Dodge & Cox with 6.86% of outstanding shares, followed by Jana Partners (Trades, Portfolio) with 0.83%, Eric Mindich (Trades, Portfolio) with 0.54%, Daniel Loeb (Trades, Portfolio) with 0.49%, Chase Coleman (Trades, Portfolio) with 0.32% and Larry Robbins (Trades, Portfolio) with 0.3%.

Paulson exited his stake in HCA Holdings Inc. (HCA) with an impact of -1.95% on the portfolio.

It is a health care services company in the U.S. It operates 166 hospitals, comprised of 162 general, acute care hospitals; three psychiatric hospitals; and one rehabilitation hospital. In addition, it operated 113 freestanding surgery centers. Fourth quarter revenues grew 6.4% and adjusted EBITDA increased 8.9%.

GuruFocus gives the stock a profitability and growth rating of 9 out of 10 with ROA of 6.71% that is outperforming 61% of the companies in the Global Medical Care industry. Financial strength has a rating of 5 out of 10, with a cash-to-debt of 0.02 that is below the industry median of 0.32.

Larry Robbins (Trades, Portfolio) is the largest shareholder of the company among the gurus with 3.6% of outstanding shares, followed by Vanguard Health Care Fund (Trades, Portfolio) with 3%, David Tepper (Trades, Portfolio) with 1.14%, Richard Perry (Trades, Portfolio) with 0.77% and Jim Simons (Trades, Portfolio) with 0.07%.

Paulson reduced his stake in Starwood Hotels & Resorts Worldwide Inc. (HOT) by 25.60%, and the deal had an impact of –1.42% on the portfolio.

The company conducts its hotel and leisure business both directly and through its subsidiaries. It has 1,222 properties providing approximately 354,200 rooms in approximately 100 countries. During the fourth quarter, the company entered into a definitive merger agreement with Marriott International Inc. (MAR) pursuant to which the company agreed to be acquired by Marriott, subject to customary closing conditions, creating the world’s largest hotel company.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with ROE of 36.21% and ROA of 5.92% that are outperforming 71% of the companies in the Global Lodging industry. Financial strength has a rating of 7 out of 10, with cash to debt of 0.44 that is below the industry median of 0.81.

Other notable shareholders among the gurus are Jim Simons (Trades, Portfolio) with 0.62% of outstanding shares, followed by Ron Baron (Trades, Portfolio) with 0.26%, Paul Tudor Jones (Trades, Portfolio) with 0.24%, Ken Fisher (Trades, Portfolio) with 0.12%, Steven Cohen (Trades, Portfolio) with 0.08% and George Soros (Trades, Portfolio) with 0.06%.

Paulson closed his stake in Cameron International Corp. (CAM) with an impact of -0.98% on the portfolio.

The company is a provider of flow equipment products, systems and services to oil, gas and process industries. Cooper Cameron is also a manufacturer of centrifugal air compressors, integral and separable gas compressors and turbochargers. Fourth quarter diluted earnings per share, excluding discontinued operations and other costs, was $1.08 compared to $1.34 for the same period of 2014.

GuruFocus gives the stock a profitability and growth rating of 8 out of 10 with ROE of 11.31% and ROA of 4.21% that is outperforming 78% of the companies in the industry. Financial strength has a rating of 5 out of 10, with a cash-to-debt of 0.84 that is above the industry median of 0.43.

PRIMECAP Management (Trades, Portfolio) is the largest shareholder of the company among the gurus with 0.25% of outstanding shares, followed by Mario Gabelli (Trades, Portfolio) with 0.22%, Pioneer Investments (Trades, Portfolio) with 0.19%, Paul Tudor Jones (Trades, Portfolio) with 0.18% and Jim Simons (Trades, Portfolio) with 0.09%.

Paulson reduced his stake in American International Group Inc. (AIG) by 20.54% and the deal had an impact of –0.91% on the portfolio.

AIG is engaged in insurance and insurance-related activities in the U.S. and abroad. It provides property casualty insurance, life insurance, retirement products, mortgage insurance and other financial services to customers in more than 130 countries and jurisdictions.

GuruFocus gives the stock a profitability and growth rating of 4 out of 10 with ROE of 2.16%. Financial strength has a rating of 6 out of 10 with cash to debt of 0.06.

The largest shareholders among the gurus are Carl Icahn (Trades, Portfolio) with 3.68% of outstanding shares, followed by HOTCHKIS & WILEY with 1.33%, First Pacific Advisors (Trades, Portfolio) with 0.81%, Steven Romick (Trades, Portfolio) with 0.69%, Richard Pzena (Trades, Portfolio) with 0.66% and Bill Nygren (Trades, Portfolio) with 0.64%.

Paulson reduced his stake in CIT Group Inc. (CIT) by 49.95% and the deal had an impact of -0.74% on the portfolio.

The company provides financing, leasing and advisory services principally to middle market companies in industries primarily in North America, and equipment financing and leasing solutions to the transportation industry worldwide.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with ROE of 10.91% and ROA of 1.91% that are outperforming 65% of the companies in the industry. Financial strength has a rating of 6 out of 10, with a cash-to-debt of 0.40 that is below the industry median of 2.60.

First Pacific Advisors (Trades, Portfolio) is the largest shareholder of the company among the gurus with 2.9% of outstanding shares, followed by Steven Romick (Trades, Portfolio) with 2.63%, Lee Ainslie (Trades, Portfolio) with 2.18%, NWQ Managers (Trades, Portfolio) with 2.04% and HOTCHKIS & WILEY with 0.72%.

About the author:

Tiziano Frateschi
You can read about me on www.theextraincome.info, which gives suggestions on position trading.

Visit Tiziano Frateschi's Website


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