According to current portfolio statistics, Daniel Loeb (Trades, Portfolio)’s top-five holdings as of the second quarter were Baxter International Inc. (BAX, Financial), United Technologies Inc. (UTX, Financial), Campbell Soup Co. (CPB, Financial), Danaher Corp. (DHR, Financial) and PayPal Holdings Inc. (PYPL, Financial).
Loeb, who founded New York-based Third Point in 1995, leads the firm’s research activities, portfolio and risk management. The firm focuses on a value-oriented, activist investing approach: Loeb seeks investments where a catalyst has potential to increase shareholder value.
The fund manager said in his shareholder letter that the firm returned 13.1% through the first half of 2019, driven primarily by active investments in Sotheby’s (BID, Financial) and Sony Corp. (SNE, Financial). As of quarter-end, Third Point’s equity portfolio contains 42 stocks, of which 16 represent new holdings. The top three sectors in terms of weight are health care, industrials and consumer cyclical, with weights of 35.82%, 15.59% and 13.55%.
Baxter
Loeb owns 23 million shares of Baxter, dedicating 22.06% of his equity portfolio to the stake. Shares averaged $77.55 during the second quarter.
The Deerfield, Illinois-based company manufactures medical products across four business segments: renal, integrated pharmacy solutions, fluid systems and surgical care. GuruFocus ranks Baxter’s profitability 8 out of 10 on several positive indicators, which include a strong Piotroski F-score of 7 and operating margins that increased over 20% per year on average over the past five years despite underperforming 50.38% of global competitors.
Other gurus with large holdings in Baxter include Pioneer Investments (Trades, Portfolio) and the Vanguard Health Care Fund (Trades, Portfolio).
United Technologies
Loeb owns 6 million shares of United Technologies, dedicating 9.15% of the equity portfolio to the position. Shares averaged $132.92 during the quarter.
The Farmington, Connecticut-based company manufactures aerospace and building components through several businesses, including UTC Aerospace Systems and Pratt & Whitney. GuruFocus ranks the company’s profitability 7 out of 10 on several positive indicators, which include a return on equity that outperforms 66.67% of global peers and Joel Greenblatt (Trades, Portfolio) return on capital that outperforms 90.12% of global competitors. Despite this, United Technologies’ operating margin has declined approximately 3.6% per year over the past five years and is outperforming just 59.88% of global aerospace and defense companies.
Other gurus with holdings in United Technologies include Dodge & Cox and Chris Davis (Trades, Portfolio)’ Davis Selected Advisors.
Campbell Soup
According to GuruFocus Real-Time Picks, a Premium feature, Loeb trimmed his Campbell Soup holding to 17,290,000 shares on July 8, down 6.54% from the second quarter.
The Camden, New Jersey-based company markets convenience food products from brands like Campbell’s, Pace, Prego, Swanson, V8 and Pepperidge Farm. GuruFocus ranks the company’s profitability 6 out of 10: Operating margins are outperforming 63.54% of global competitors despite contracting 4.4% per year on average over the past five years.
Danaher
Loeb owns 3.71 million shares of Danaher, dedicating 6.21% of the equity portfolio to the stake. Shares averaged $133.42 during the quarter.
The Washington, D.C.-based company operates four business segments: life sciences, diagnostics, dental and environmental and applied solutions. GuruFocus ranks Danaher’s financial strength and profitability approximately 7 out of 10 on several positive signs, which include a strong Altman Z-score of 4.37, consistent revenue growth and operating margins that have increased approximately 0.50% per year over the past five years and are outperforming 63.49% of global competitors.
PayPal
Loeb owns 3.5 million shares of PayPal, dedicating 4.69% of the equity portfolio to the position. Shares averaged $94.45 during the quarter.
The San Jose, California-based company provides electronic payment solutions to merchants and consumers. GuruFocus ranks the company’s profitability 7 out of 10: Operating margins have increased approximately 0.4% per year over the past five years despite underperforming 72.73% of global competitors. Additionally, PayPal’s return on assets outperforms 64.14% of global credit services companies.
Disclosure: No positions.
Read more here:
- 3 Predictable Stocks Warren Buffett and Ray Dalio Agree On
- 5 Semiconductor Companies Gurus Agree On
- Top 6 Holdings of Jeremy Grantham’s GMO
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
