These Billionaire Michael Price’s Stock Picks Can Destroy Your Portfolio

Billionaire Michael Price is an American value investor and hedge fund manager who founded MFP Investors, a New York-based investment fund, in 1988. Mr. Price has a net worth of $1.2 billion, according to Forbes. He has been listed in the Time magazine as one of the 25 most influential people in America. However, his hedge fund’s performance has not been impressive.  According to the backtests performed by Insider Monkey’s research team, during 2000-2012, MFP Investors inched down by 0.82% per month, compared to 0.29% per month returned by S&P Index in the same period. This shows that the fund lagged the index by 1.17 percentage points per month.

With this in mind, let’s take a closer look at some of the largest positions in MFP Investors’ equity portfolio as of the end of September.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

MFP Investors reported ownership of 193,560 shares of General Motors Company (NYSE:GM) worth $6.15 million as of the end of the third quarter. The stock has appreciated by over 7% year-to-date. On Wednesday, Investment firm Instinet reiterated its ‘Neutral’ rating on General Motors (NYSE:GM’s stock and raised its price target to $34 from $32. The company recently has announced plans to start testing autonomous vehicles on public roads in Michigan after the approval of SAVE Act legislation to support self-driving cars. In other news, General Motors said on Monday that it would close five of its US assembly plants due to an oversupply of Sedans. A total of 62 hedge funds tracked by Insider Monkey were bullish on General Motors Company (NYSE:GM) at the end of September, down by three over the quarter.

At the end of the third quarter, there were 145,000 shares of E I Du Pont De Nemours And Co (NYSE:DD) in MFP Investors’ 13F portfolio, worth $9.71 million. On Wednesday, a US Jury in Ohio ordered Du Pont De Nemours And Co (NYSE:DD) to pay a man $2 million after his claims to have developed testicular cancer from exposure to a toxic chemical leaked from one of the company’s plants were found valid. This is the third time since October 2015 when DuPont is ordered to pay money in compensatory damages. The company is accused of dumping the hazardous chemical called ‘C-8’ in nearby waters of its plants, causing excessive contamination of the environment. This chemical is the primary cause of testicular and kidney problems. The stock is up by over 13% year-to-date. Jonathon Jacobson’s Highfields Capital Management owned 7.81 million shares of E I Du Pont De Nemours And Co (NYSE:DD) at the end of September. It was one of the 36 funds from our database that held shares of the company.

We will see the rest of MFP’s positions of the third quarter on the next page.

MFP sold 200,000 shares of Boston Scientific Corporation (NYSE:BSX) during the third quarter, and held 700,000 shares valued at $16.66 million. The stock has gained over 16% year-to-date. Boston Scientific Corporation (NYSE:BSX) recently has filed a patent infringement suit against Nevro Corp. (NYSE:NVRO), claiming that Nevro’s Senza neuromodulation system infringes Boston Scientific’s patents on leads, batteries and telemetry unit. Boston Scientific recently completed its $75 million acquisition of Neovasc, Inc., (NASDAQ: NVCN)’s advanced biologic tissue capabilities and certain manufacturing assets. Samuel Isaly’s OrbiMed Advisors owns 17.21 million shares of Boston Scientific Corporation (NYSE:BSX) as of the end of the third quarter. Overall, 46 investors tracked by us amassed shares of Boston Scientific Corporation at the end of September.

MFP Investors upped its stake in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) by 6% to 469,300 shares worth $21.59 million during the third quarter. Earlier this month, Teva announced the appointment of Dipankar Bhattacharjee as the head of its global generic medicine group. Mr. Bhattacharjee, who has been the chief executive of Teva Generics Europe since 2013, will replace Siggi Olafsson. This management change surprised investors and the stock tanked, as Siggi Olafsson was the key figure behind Teva’s $33.5 billion acquisition of Actavis. Last month, Morgan Stanley downed its rating on Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)’s stock to ‘Equal Weight’ from Overweight’ and also slashed its price target to $42 from $63. Of the 742 hedge funds in our database, 54 were bullish on Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) at the end of the third quarter, down by one over the quarter.

MFP Investors reported ownership of 1.8 million shares of Intel Corporation (NASDAQ:INTC) worth $67.95 million as of the end of September. The stock is up over 7% year-to-date. Intel recently announced development-focused Artificial Intelligence platform, Nervana, to enable data scientists and professionals in the tech industry to solve the “world’s biggest challenges”. The world’s biggest chipmaker in terms of revenue is also making a huge bet on the Cloud and Artificial Intelligence industry with its Saffron Technology, which leverages memory-based reasoning techniques to analyze and use heterogeneous data. Natixis Global Asset Management’s Harris Associates disclosed 20.69 million shares of Intel Corporation (NASDAQ:INTC) in its latest 13F filing. During the third quarter, the number of funds from our database long Intel Corporation (NASDAQ:INTC) went up by nine to 68.

 

Disclosure: None