In this article, we discuss 5 favorite stocks of Dan Loeb’s Third Point. If you want to see the rest of the billionaire’s top portfolio holdings, check out 10 Favorite Stocks of Dan Loeb’s Third Point.
5. Intuit Inc. (NASDAQ:INTU)
Third Point’s Stake Value: $739,703,000
Percentage of Third Point’s 13F Portfolio: 5.16%
Number of Hedge Fund Holders: 82
Intuit Inc. (NASDAQ:INTU) is a California-based company that provides compliance products and financial management solutions to individuals and small businesses in the United States, Canada, and international markets. Dan Loeb increased his Intuit Inc. (NASDAQ:INTU) stake by 5% in Q4 2021, holding 1.15 million shares worth $739.7 million.
On March 3, Intuit Inc. (NASDAQ:INTU) declared a quarterly dividend of $0.68 per share, in line with previous. The dividend is payable on April 18, to shareholders of record on April 11.
BMO Capital analyst Daniel Jester maintained his Outperform rating and a $600 price target on Intuit Inc. (NASDAQ:INTU) on March 21, however, he observed that in the middle of the U.S. tax season, the likelihood of a “straight-forward” year is fading. Year-to-date, the analyst told investors that there are indicators pointing to a slow tax season, raising the possible risk around Intuit Inc. (NASDAQ:INTU)’s financial results in May.
Hedge fund sentiment around Intuit Inc. (NASDAQ:INTU) was extremely bullish. Among the hedge funds tracked by Insider Monkey, 82 funds were long Intuit Inc. (NASDAQ:INTU) in Q4 2021, compared to 64 funds in the earlier quarter. Terry Smith’s Fundsmith LLP is the largest stakeholder of the company, with 3.7 million shares worth $2.40 billion.
Here is what Baron FinTech Fund has to say about Intuit Inc. (NASDAQ:INTU) in its Q4 2021 investor letter:
“Intuit Inc. is the leading provider of accounting and tax preparation software. Shares increased after the company reported quarterly results that beat Street estimates, with 22% revenue growth in the Small Business segment and record-high revenue from Credit Karma. The company closed the acquisition of MailChimp, which expands its product offering and is accretive to EPS. Management increased full-year guidance to reflect better organic growth and the contribution from MailChimp. We continue to own the stock due to Intuit’s strong competitive position and numerous growth opportunities. We have several investments in software companies that help businesses manage their financial processes and operations. Intuit Inc. provides accounting and payroll solutions for small businesses as well as tax preparation software for consumers and tax professionals.”
4. Amazon.com, Inc. (NASDAQ:AMZN)
Third Point’s Stake Value: $783,570,000
Percentage of Third Point’s 13F Portfolio: 5.46%
Number of Hedge Fund Holders: 279
Dan Loeb has publicly stated that Amazon.com, Inc. (NASDAQ:AMZN) has an unexplored value of $1 trillion between its e-commerce setup and the Amazon Web Services segment. Dan Loeb, via Third Point, boosted his Amazon.com, Inc. (NASDAQ:AMZN) stake in Q4 2021 by 28%, holding 235,000 shares worth $783.5 million. The stock represents 5.46% of the hedge fund’s 13F portfolio.
In 2021, Amazon.com, Inc. (NASDAQ:AMZN)’s full-year revenue stood at $469.8 billion, compared to $386 billion in the previous year. Net income in 2021 grew 56.41% from $21.3 billion in 2020 to $33.3 billion.
Evercore ISI analyst Mark Mahaney reiterated his Outperform rating on Amazon.com, Inc. (NASDAQ:AMZN) with a $4,300 price target on March 25. He “modestly” increased his FY23 and FY24 estimates above the Street projections, naming Amazon.com, Inc. (NASDAQ:AMZN) his number one mega cap internet long idea. He believes the market may be underappreciating four elements of the bullish view on Amazon.com, Inc. (NASDAQ:AMZN), such as the shipping elasticity opportunity, brand advertising revenue channels, the grocery opportunity, and “just how cheap” the shares are.
Insider Monkey’s hedge fund data reveals that Amazon.com, Inc. (NASDAQ:AMZN) was found in the portfolios of 279 funds at the end of the fourth quarter of 2021, up from 242 funds in the preceding quarter. The total stakes in Amazon.com, Inc. (NASDAQ:AMZN) held during Q4 amounted to more than $49 billion. Fisher Asset Management owned a prominent position in the company, with 2.1 million shares worth $7.2 billion.
Here is what Mercator International Opportunity Fund has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2021 investor letter:
“Transformative technologies often generate euphoria. People are excited by the big new thing that is changing the world. We saw this pattern with the boom of westward canal transportation at the dawn of the nineteenth century. Railway stocks similarly attracted large numbers of eager investors a few decades later. Then came the electrification of America, the telephone, and the automobile industry, to name just a few transformative technologies.
The initial euphoric phase always ends with a reality check. Valuations come back to earth. At the end of the cycle, only a few companies remain standing. A shakeout has a way of clarifying the field of opportunities.
For example, readers may recall that when the internet bubble burst two decades ago, Amazon.com, Inc. (NASDAQ:AMZN) stock suffered greatly but pet.com was gone. For those investors who had stayed on the sidelines, this was an excellent time to buy Amazon. The company’s business model had shown its merits and competition was rapidly shrinking. The stock price was now also much more attractive.”
3. PG&E Corporation (NYSE:PCG)
Third Point’s Stake Value: $934,780,000
Percentage of Third Point’s 13F Portfolio: 6.52%
Number of Hedge Fund Holders: 59
PG&E Corporation (NYSE:PCG) operates via its primary subsidiary, Pacific Gas and Electric Company, supplying electricity and natural gas to customers across California. Billionaire Dan Loeb held 77 million PG&E Corporation (NYSE:PCG) shares in the fourth quarter of 2021, worth $934.7 million, representing 6.52% of his total 13F holdings.
PG&E Corporation (NYSE:PCG)’s revenue for the year in 2021 stood at $20.6 billion, up from $18.4 billion in 2020. The net loss in 2021 came in at $102 million, a significant rebound compared to a loss of $1.3 billion in the preceding year. In its 2022 guidance, PG&E Corporation (NYSE:PCG) expects GAAP earnings ranging between $0.89 to $1.23 and non-GAAP core earnings per share of $1.07 to $1.13, versus consensus of $1.12.
On April 12, Mizuho analyst Paul Fremont raised the price target on PG&E Corporation (NYSE:PCG) to $18 from $16 and kept a Buy rating on the shares after the company announced a settlement agreement in the Kincade and Dixie fires.
According to the fourth quarter database of Insider Monkey, 59 hedge funds were bullish on PG&E Corporation (NYSE:PCG), with stakes exceeding $4 billion, compared to 54 funds in the prior quarter, holding stakes in the company worth $3.8 billion. Edward A. Mule’s Silver Point Capital owned a prominent position in PG&E Corporation (NYSE:PCG), with 32.4 million shares valued at roughly $394 million.
Here is what GoodHaven Capital Management has to say about PG&E Corporation (NYSE:PCG) in their Q4 2020 investor letter:
“During the period we purchased a new holding – PG&E Corporation – the California based utility (PCG). We expect that contrarian special situations will continue to (opportunistically) be an important part of the portfolio. After all, we bought PCG – which has filed Ch. 11 twice related to prior exposure to wildfire liabilities and staggering mismanagement – right in the middle of California’s recent heavy wildfire season. Our thinking here is that the reorganized utility has new regulatory protections that significantly reduces wildfire liability exposure, an above average rate growth profile and potentially much better management – they were searching for a new CEO when we made our investment. We purchased the stock at a high single digit forward earnings multiple, a discount to its peers that trade in the mid to high teens. Shortly after our purchases PG&E hired the well regarded Patti Poppe as their new CEO – we like this decision.”
2. Danaher Corporation (NYSE:DHR)
Third Point’s Stake Value: $954,129,000
Percentage of Third Point’s 13F Portfolio: 6.65%
Number of Hedge Fund Holders: 87
Danaher Corporation (NYSE:DHR) is an American conglomerate that operates via three divisions – Life Sciences, Diagnostics, and Environmental & Applied Solutions. Danaher Corporation (NYSE:DHR) provides professional, medical, industrial, and commercial products and services globally.
On February 23, Danaher Corporation (NYSE:DHR) declared a $0.25 per share quarterly dividend, a 19% increase from its prior dividend of $0.21. The dividend is payable on April 29, to shareholders of the company as of March 25.
Danaher Corporation (NYSE:DHR)’s revenue in 2021 increased to $29.4 billion from $22.2 billion in the prior year. The 2021 net income grew 76.44% to $6.4 billion, compared to $3.6 billion in 2020.
Wells Fargo analyst Dan Leonard maintained an Overweight rating on Danaher Corporation (NYSE:DHR) but lowered the firm’s price target on the shares to $330 from $350 on January 28. The change in price target reflects Leonard’s view that Danaher Corporation (NYSE:DHR)’s core growth algorithm and COVID soft landing are underappreciated.
Among the hedge funds tracked by Insider Monkey, 87 funds held long positions in Danaher Corporation (NYSE:DHR) at the end of Q4 2021, up from 74 funds in the preceding quarter. John Allison’s Unio Capital owned a significant stake in the company, worth approximately $849 million.
Here is what ClearBridge Sustainability Leaders Strategy has to say about Danaher Corporation (NYSE:DHR) in its Q3 2021 investor letter:
“Diversified health care company Danaher, a top contributor in the second quarter, had a strong third quarter as well, posting a strong beat-and-raise driven by COVID-19 testing, a rebound for in-person activity and no impact from variants/renewed shutdowns.”
1. SentinelOne, Inc. (NYSE:S)
Third Point’s Stake Value: $1,348,713,000
Percentage of Third Point’s 13F Portfolio: 9.41%
Number of Hedge Fund Holders: 39
SentinelOne, Inc. (NYSE:S) is a California-based cybersecurity provider that protects businesses from ransomware and malware threats. Dan Loeb’s Third Point owns 26.7 million SentinelOne, Inc. (NYSE:S) shares, worth $1.3 billion, representing 9.41% of the hedge fund’s total 13F securities. It is the largest holding in Dan Loeb’s Q4 portfolio.
On March 17, DA Davidson analyst Rudy Kessinger maintained a Buy recommendation on SentinelOne, Inc. (NYSE:S) but slashed the firm’s price target on the shares to $42 from $57, citing lower peer multiples. SentinelOne reported solid Q4 results, with ARR up 123% year-over-year and guided Q1 and FY23 revenue ahead of consensus. However, operating profit guidance was decidedly below forecasts owing to the company’s aggressive growth plans, the analyst told investors in a research note.
Among the hedge funds tracked by Insider Monkey, 39 funds were bullish on SentinelOne, Inc. (NYSE:S) in the fourth quarter, up from 35 funds in the prior quarter. Kevin Michael Ulrich and Anthony Davis’ Anchorage Advisors held a significant stake in the company, with 9.8 million shares worth $498 million.
Here is what ClearBridge Investments SMID Cap Growth Strategy has to say about SentinelOne, Inc. (NYSE:S) in its Q4 2021 investor letter:
“We added six new positions in the fourth quarter. We see next-generation cybersecurity provider SentinelOne, although early in its growth lifecycle, as capable of taking share from legacy players in the antivirus and broader cybersecurity industry.”
You can also take a look at 10 Semiconductor Stocks to Buy Today According to Israel Englander’s Millennium Management and 10 Dividend Stocks to Buy According to Billionaire Jeffrey Talpins.
