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Investing Like Billionaire Dan Loeb: Virgin Media Inc. (VMED), Murphy Oil Corporation (MUR)

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Daniel Loeb, founder of Third Point, LLC, is best known for his poignant letters that he sends to companies where he disagrees with their overall corporate strategy. He employs a team of analysts that are known for their painstaking attention to detail and thorough analysis. Loeb and his team are the ones that discovered former Yahoo! Inc. (NASDAQ:YHOO) CEO Scott Thompson never graduated with a degree in computer science, but Yahoo! stated that he had in their SEC filings. By uncovering this fabrication, Loeb was able to get himself appointed to the company’s board and bring in current CEO Marissa Mayer from Google Inc (NASDAQ:GOOG). Yahoo! is his largest holding and has been a big winner for him.
Loeb is an aggressive fund manager. He’s not passive money. He’s willing to use his stakes in companies to advocate for change and he also knows when to take money off the table. He went into Herbalife Ltd. (NYSE:HLF) in December by buying an 8.2% stake, but did sell some of his position with the stock up 18% in 2013. Loeb also sold some of his Yahoo! position and locked in profits. He’s willing to trade his position by buying and selling at opportune times.
So where is Loeb investing now? We know about Yahoo! and Herbalife, but those have already made gains and I certainly don’t want to get in the middle of the slugfest brewing at Herbalife between Ackman, Loeb and Icahn. The answer lies in looking at his recent 13F filings.
Virgin Media Inc. (NASDAQ:VMED) is a new position for Third Point and is now Loeb’s second largest holding. Liberty Global agreed to acquire Virgin Media in February for $23.3 billion in cash and stock and the deal is expected to close in the second quarter of this year. This is likely a merger arbitrage play for Loeb. Besides Loeb, John Griffin from Blue Ridge Capital and Andreas Halvorsen’s Viking Global have jumped on this trade.
European Aeronautic Defence and Space Company (EPA:EAD) is another new holding for Loeb. EADS is the manufacturer of Airbus jets. Loeb likely bought this holding after the problems with Boeing’s 787 Dreamliner were announced and the aircraft was taken out of service. The 787 Dreamliner allowed Boeing to record more orders than Airbus last year. Boeing’s problems are Airbus’ gain. The stock is trading at a new 52-week high of 41.47, another winner for Loeb.
Loeb has 5% of his portfolio in Murphy Oil Corporation (NYSE:MUR), an oil & gas exploration and production company. Loeb stated in his quarterly letter to his investors that Murphy “had many routes to unlock talent, meaningful value, among them – and most significantly – a highly accretive spin-off of its retail business.” Since Loeb penned that letter, Murphy has announced that it will spin off Murphy USA.
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