MUR, KRFT, NXY, SYMC, WCC: Billionaire Dan Loeb’s New Stock Picks

THIRD POINTDan Loeb’s Third Point has over $4 billion in assets under management, as Loeb’s mix of activism- often quite hostile to current management, as was recently the case at Yahoo- and value investing has driven good returns for the fund and satisfied investors. By comparing the 13F filed for the end of September with the one filed for the end of June, we can see some of the stocks that were new holdings in Loeb’s portfolio in the most recent filing. Read on for our quick take on Third Point’s largest new positions for the third quarter and see the fund’s full 13F portfolio.

Third Point liked Murphy Oil Corporation (NYSE:MUR), initiating a position of 4.9 million shares. In its most recent quarter, earnings dropped 44% on a very small decline in revenue; as with many oil and gas related companies, the stock price has lagged the market this year as prices have sunk. At a market capitalization of $11 billion, Murphy trades at 16 times trailing earnings. Loeb has told investors that he believes that the company could create shareholder value by spinning out its retail operations (read about why Loeb and other hedge funds like spinout situations).

Another spinout- or more accurately, a completed breakup- was diversified food and beverage company Kraft Foods Group Inc (NASDAQ:KRFT), which manages the North American operations of the Kraft business following its division into Kraft Foods and Mondelez International. Kraft trades at 17 times forward earnings estimates, which puts it about in line with the valuations of other large food companies. The fund owned 5 million shares of the stock at the end of September. Even with the advantages of spinout situations, we think that we’d like to see more performance from Kraft Foods as a stand-alone company.

Nexen Inc. (NYSE:NXY) was another new pick. Nexen is also a special situation, as the company has received an acquisition bid from large Chinese oil company CNOOC. There is significant opposition to the deal in Canada, and so the current stock price is well below where the proposed transaction would take place as it’s uncertain that the government will allow the purchase (the deal is currently under review, with a decision expected in early December). However, a number of hedge funds have seen this as a merger arbitrage opportunity, apparently confident that the deal will be approved.

Loeb and his team also bought shares of Internet security company Symantec Corporation (NASDAQ:SYMC). The stock looks quite cheap, carrying trailing and forward P/E multiples of 11 and 10, respectively. It’s turned in modest growth in recent quarters, but that is probably enough to justify such a low valuation. Fellow billionaire Ken Griffin’s Citadel Investment Group increased its own holdings of Symantec during the third quarter (check out more of Ken Griffin’s stock picks) and we think that we would like to take a closer look at the company to make sure that it can continue to generate at least some growth.

The fund took a position of 1.7 million shares in WESCO International, Inc. (NYSE:WCC), a $2.8 billion market cap wholesaler of industrial and electrical equipment. Wesco reported an 18% increase in earnings in the third quarter compared to the same period in 2011, which came out of small revenue growth and a considerable increase in the company’s margins. We’d note that as an industrial-related company it is tied to the broader economy with a beta of 2, and is also widely shorted with the most recent data showing 20% of the outstanding shares held short. However, the multiples look good at this company as well (for example, the trailing P/E is 14) and it too could be a good value stock if further review of its results indicate that it can continue its growth going forward.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!