Hedge fund manager Daniel Loeb (Trades, Portfolio) axed 10 of his long portfolio’s positions during a losing fourth quarter, buying only Cigna Corp. (CI, Financial) and increasing several smaller stakes, he announced Friday.
Returns at Loeb’s Third Point Offshore Fund, which invests opportunistically in diverse asset classes, dipped 11.1% for 2018, underperforming the S&P 500’s 4.4% tumble, after a 6.2% drop for December, compared to a 9.0% loss in the index. The fund suffered in both its equity and credit strategies, management said in a December commentary. In its long strategy, consumer, industrials and commodities, and financials led declines, while “small gains” in its short equity positions “helped partially mitigate losses.”
For January, Loeb’s fund bounced back but less than the benchmark. It climbed 2.9% in January, outpaced by the 8.0% jump in the S&P 500.
During the quarter, Loeb trimmed four of his portfolio’s five largest long positions, reducing by double-digit percentages Baxter International (BAX, Financial), DowDuPont Inc. (DWDP, Financial) and PayPal Holdings Inc. (PYPL, Financial). He sold 4.31% of his Danaher Corp. (DHR) shares, while increasing only second-largest position Campbell Soup CO. (CPB, Financial) by 16.67%.
Among his fourth-quarter sales were a 4.05 million-share stake in Alibaba Group Holdings Ltd. (BABA, Financial), a 1.25 million-share stake in Netflix Inc. (NFLX, Financial) and a 4.1 million share-stake in Microsoft Corp. (MSFT, Financial). He also left behind 8.4 million shares of United Technologies (UTX, Financial), a position he established in the first quarter of 2018.
At fourth quarter-end, Loeb’s Third Point portfolio contained 22 long positions valued around $6.51 billion, down from $14.31 billion and 31 positions in the previous quarter and the lowest since the fourth quarter of 2013. The largest represented sector was health care at 46% of holdings, followed by consumer defensive at 14.96%.
New buy
Loeb bought 525,000 shares of Cigna Corp., giving it 1.68% portfolio space. The stock’s fourth-quarter share price averaged $208.
Cigna Corp. has a market cap of $69.64 billion; its shares were traded around $182.89 with a price-earnings ratio of 16.24 and price-sales ratio of 1.01. The trailing 12-month dividend yield of Cigna Corp. is 0.02%. The forward dividend yield of Cigna Corp. is 0.02%.
Increases
Salesforce.com Inc. (CRM, Financial)
Loeb increased his Salesforce.com position by 135% to 1.175 million shares, worth 2.47% of the portfolio. The stock’s fourth-quarter share price averaged $137.
Salesforce.com Inc. has a market cap of $122.33 billion; its shares were traded around $159.91 Monday with a price-earnings ratio of 170.12 and price-sales ratio of 9.82. Salesforce.com Inc. had an annual average earnings growth of 19% over the past 10 years. GuruFocus rated Salesforce.com Inc. the business predictability rank of 4-star.
Cambell Soup Co. (CPB, Financial)
Loeb increased the position by 16.67% to 21 million shares, worth 10.64% of the portfolio. The stock’s fourth-quarter share price averaged $38.
Campbell Soup Co. has a market cap of $10.28 billion; its shares were traded around $34.16 Monday with a price-earnings ratio of 57.90 and price-sales ratio of 1.10. The trailing 12-month dividend yield of Campbell Soup Co.is 4.09%. The forward dividend yield of Campbell Soup Co. is 4.08%.
See Daniel Loeb (Trades, Portfolio)’s portfolio here.
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