John Paulson (Trades, Portfolio), president and portfolio manager of New York-based Paulson & Co., acquired 14 new stocks in the fourth quarter, according to his portfolio update released Friday.
Paulson rose to fame in 2007 when he was among the seers who shorted the subprime housing market collapse, resulting in take-home pay of nearly $4 billion, a record for the hedge fund industry.
The guru has had worse luck of late. After a number of wrong-way bets, assets at the firm shrank to $12.5 billion at the end of 2016, from a high of $38 billion in 2011. Paulson lost about 42% in his Paulson Partners fund, a merger arbitrage strategy, over the past four years, Bloomberg reported in January. His Paulson Partners Enhanced fund declined 35% in 2017 and 49% in 2016.
Some funds delivered returns, with the Paulson Credit Opportunities fund gaining 11% and the Pure Spread fund up 12% for 2017, according to the publication.
Paulson’s biggest holdings is its $539 million stake in SPDR Gold Trust (GLD, Financial), which in the past five years has declined 17.5%. A perpetual gold bull, he also owns stakes in numerous gold miners, which have not fared well in recent years.
In September, Paulson & Co. took aim at the underperforming miners in a slide show at the Denver Gold Forum, accusing them of overpaying CEOs despite poor returns and destroying $85 billion in value. The firm further charged the industry with investing in bad projects, offering poor return on capital, no shareholder activism.
Despite the disgruntlement, Paulson left his gold ETF and mining investments untouched during the fourth quarter.
Drug companies Mylan NV (MYL, Financial), Shire PLC (SHPG, Financial), the embattled Valeant Pharmaceuticals (VRX, Financial), and Allergan (AGN, Financial) round out his top five holdings.
Founded in 1994, Paulson & Co. is an event-driven fund that makes returns by participating in merger arbitrage, bankruptcies and other corporate events. It also invests in gold, debt instruments, real estate and a number of other types of securities and commodities.
In the fourth quarter, Paulson’s largest new buys were concentrated in entertainment. He bought: Scripps Networks Interactive Inc. (SNI, Financial), CenturyLink Inc. (CTL, Financial), Viacom Inc. (VIAB, Financial), Sucampo Pharmaceuticals Inc. (SCMP, Financial) and Twenty-First Century Fox Inc. (FOX, Financial).
Scripps Networks Interactive Inc. (SNI, Financial)
Paulson purchased 500,000 shares of the company, which had a fourth-quarter average price of $83. It had a 0.83% weight in Paulson’s total long stock portfolio.
Scripps Networks Interactive Inc., a mass media company, has a market cap of $11.45 billion; its shares were traded around $88.16 with a P/E ratio of 18.90 and P/S ratio of 3.30. The trailing 12-month dividend yield of Scripps Networks Interactive Inc stocks is 1.36%. The forward dividend yield of Scripps Networks Interactive Inc stocks is 1.37%. Scripps Networks Interactive Inc had an annual average earnings growth of 8.50% over the past 5 years.
CenturyLink Inc. (CTL, Financial)
Paulson purchased 2 million shares of CenturyLink, which had a fourth-quarter average share price of $17. The holding had a 0.65% portfolio weight in Paulson’s combined portfolio.
CenturyLink Inc. is a high speed internet, phone and television company. It has a market cap of $19.74 billion; its shares were traded around $18.47 with a P/E ratio of 10.49 and P/S ratio of 0.66. The trailing 12-month dividend yield of CenturyLink Inc. stocks is 11.69%. The forward dividend yield of CenturyLink Inc. stocks is 11.41%.
Paulson purchased 1 million shares of Viacom, which had a fourth-quarter average price of $27. The holding had a 0.6% weight in the stock portfolios.
Viacom Inc. is the owner of brands in television, film and online. It has a market cap of $13.99 billion; its shares were traded around $33.98 with a P/E ratio of 8.09 and P/S ratio of 1.24. The trailing 12-month dividend yield of Viacom Inc. stocks is 2.36%. The forward dividend yield of Viacom Inc stocks is 2.39%. Viacom Inc. had an annual average earnings growth of 8.40% over the past 10 years. GuruFocus rated Viacom Inc. the business predictability rank of 3-star.
Sucampo Pharmaceuticals Inc. (SCMP, Financial)
Paulson purchased 1.6 million shares of Sucampo Pharmaceuticals, which had a fourth-quarter average price of $12. The holding had a 0.56% weight in the stock portfolios.
Sucampo Pharmaceuticals Inc. is a drug company that was acquired by Mallinckrodt in Feb. 13. It has a market cap of $849.030 million; its shares were traded around $18.00 with and P/S ratio of 3.78.
Twenty-First Century Fox Inc. (FOX, Financial)
Paulson purchased 800,000 shares of Twenty-First Century Fox, which had a fourth-quarter average price of $29. The holding had a 0.53% weight in the stock portfolios.
Twenty-First Century Fox Inc. is a mass media company. It has a market cap of $68.26 billion; its shares were traded around $36.61 with a P/E ratio of 17.30 and P/S ratio of 2.33. The trailing 12-month dividend yield of Twenty-First Century Fox Inc. stocks is 0.96%. The forward dividend yield of Twenty-First Century Fox Inc. stocks is 0.97%. Twenty-First Century Fox Inc. had an annual average earnings growth of 10.30% over the past five years.
See John Paulson (Trades, Portfolio)’s portfolio here.
