Billionaire Dan Loeb, the founder of $18 billion hedge fund Third Point, is mired in a fourth-straight year of trailing the market, though the activist fund did return a solid 18% last year when hedge funds collectively trailed the S&P 500 by a wide margin. Thanks to many years of such solid returns during its 23-year history, Loeb has built an estimated $3.1 billion personal fortune, which ranks him 712th on Forbes’ list of the world’s richest people.

Loeb’s activist fund, which is named after a surfing spot in Malibu (which explains the seeming randomness of him surfing in our caricature of him below), tries to work constructively with management teams but is not afraid to mix it up with recalcitrant companies either. The fund earned two high-profile activist victories within the past month alone, convincing United Technologies Corporation (NYSE:UTX) to split into twain, while also winning two seats on the board of embattled food company Campbell Soup Company (NYSE:CPB).

In the third quarter, Third Point sold out of 14 positions while replacing them with just half as many new ones. Despite that, the value of the fund’s 13F portfolio ticked down only slightly, to $14.31 billion, from the all-time high of $14.35 billion it reached in the middle of this year. Third Point’s exposure to healthcare stocks rose by 6.56 percentage points during Q3 to 27.71%, while communications stocks fell by 7.64 percentage points to 14.83% weighting.

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On the next page we’ll check out Dan Loeb’s five biggest moves of the third quarter, which included him selling off a stock he had just bought in Q2.

Stocks Bought in Q3

American Express Company (NYSE:AXP)

– Shares Bought During Q3: 5.00 million
– Value of Holding (as of September 30): $532 million

– Q4 Return (through December 14): -0.74%

– Trailing P/E Ratio: 25.46

– Forward Dividend Yield: 1.48%

American Express Company (NYSE:AXP) is one of the Stocks Billionaire Dan Loeb and Insiders Like, after Third Point opened a 5 million-share stake in the payment processor during the third quarter. In the fund’s latest investor letter, Loeb said AXP shares are trading at a mere 12.5x the fund’s 2019 EPS estimates, and 11x its 2020 estimates and suggested they have 30% upside over the next 18 months.

Merck & Co., Inc. (NYSE:MRK)

– Shares Bought During Q3: 4.50 million
– Value of Holding (as of September 30): $319 million

– Q4 Return (through December 14): +7.81%

– Forward P/E Ratio: 16.24

– Forward Dividend Yield: 2.88%

Third Point also opened a new position in Merck & Co., Inc. (NYSE:MRK) during Q3, buying 4.5 million shares. While hedge fund ownership of Merck, one of the 10 Biggest Antidepressant Drug Companies In 2017, ticked up by 7% in Q3, that came after three straight quarters of declines.

Adobe Inc. (NASDAQ:ADBE)

– Shares Bought During Q3: 200,000
– Value of Holding (as of September 30): $243 million

– Q4 Return (through December 14): -14.80%

– Forward P/E Ratio: 23.98

Third Point added 200,000 shares to its Adobe Inc. (NASDAQ:ADBE) holding during the last quarter, raising it by 28% to 900,000 shares. Adobe is also a top stock pick of Stanley Druckenmiller, though Insider Monkey founder Ian Dogan isn’t overly impressed by the billionaire’s collection of top stock picks, describing them as looking like they were put together by a drunk venture capitalist from San Francisco.

Stocks Sold in Q3

Netflix, Inc. (NASDAQ:NFLX)

– Shares Sold During Q3: 750,000
– Value of Holding (as of September 30): $468 million

– Q4 Return (through December 14): -28.68%

– Forward P/E Ratio: 64.14

Third Point sold off 37% of its Netflix, Inc. (NASDAQ:NFLX) shares during Q3, though it retains a large $468 million position in the streaming company. Netflix has been one of the most volatile stocks this year, with a daily standard deviation of 3.5%.

NXP Semiconductors NV (NASDAQ:NXPI)

– Shares Sold During Q3: 10.75 million
– Value of Holding (as of September 30): $0

– Q4 Return (through December 14): -9.93%

– Forward P/E Ratio: 8.27

– Forward Dividend Yield: 1.40%

Hedge fund ownership of NXP Semiconductors NV (NASDAQ:NXPI) sank during Q3, as Third Point was one of a net total of 15 hedge funds that sold off the stock, though it still ranked among the 30 Most Popular Stocks Among Hedge Funds in Q3 of 2018. One of Third Point’s biggest losers in Q2, the fund quickly cut ties with the position in Q3, which it had just opened during the second quarter.

Disclosure: None