Billionaire John Paulson manages one of the world’s largest hedge funds, Paulson & Co., with around $29 billion in assets under management. Paulson focuses on event and distressed strategies. After reviewing John Paulson’s latest buys and sells from the fourth quarter, here are a few things that stuck out (see all the stocks Paulson owns).
Paulson’s New Additions
One of Paulson’s new additions includes Sprint Nextel Corporation (NYSE:S). The hedge fund now owns 127 million shares, and it is Paulson’s third largest holding. Sprint has been busy of late, having Softbank take a 70% stake for $20.1 billion, then using that capital to make a bid for the remaining shares of Clearwire it doesn’t already own (see how Dish is shaking up the Clearwire deal).
The valuation for Sprint Nextel Corporation (NYSE:S) is also rather compelling. Although Sprint doesn’t offer investors a 5% dividend yield that other major telecoms AT&T and Verizon offer, it does appear to offer investors the potential for price appreciation assuming it can complete its Clearwire acquisition and build out its spectrum, which will in turn should allow the company the ability to trade more in-line on with major peers. As of now the telecom trades well below its peers:
Price to Sales Ratio
Cablevision Systems Corporation (NYSE:CVC) was one of Paulson’s big increases, upping his stake 478% and putting the cable system operator as twenty-first in his portfolio. Cablevision is the fifth largest U.S. cable system operator, offering cable, internet and voice services to nearly 3.2 million subscribers in New York City and certain Western states.
However, Cablevision has seen significant stock pressure following Hurricane Sandy…
There is still the possibility that the super-storm could impact 2013 subscriber growth, which has in part lead to the stock’s fall. Yet, the company pays a nice dividend yield at 4.3% and has increased its dividend payments by roughly 16% annually over the last three years.
Paulson sold off 46% of his Delphi Automotive PLC (NYSE:DLPH)
stake during the fourth quarter, dropping the stock from third in his portfolio to tenth. Delphi Automotive PLC (NYSE:DLPH) is a great play on the rebounding auto industry (see other derivative plays),
so why the selloff by Paulson? Well, it is likely that it is partly due to the run up in its stock price, up over 30% during the last twelve months.