The 13F shows that Loeb bought 3.1 million shares of Herbalife Ltd. (NYSE:HLF)– likely after being unimpressed with billionaire Bill Ackman’s presentation arguing for shorting the stock and seeing the price collapse. Find Ackman’s favorite stocks. Of course, fellow billionaire Carl Icahn has become the highest-profile Herbalife long following a charged argument with Ackman on CNBC but this is a sizable position for Third Point as well. Certainly on a quantitative basis Herbalife is cheap at 10 times trailing earnings, though short interest remains high and some of Ichan’s proposed moves (including a buyout) seem unlikely given concerns that- at least in the long run- Herbalife is a pyramid scheme.
A somewhat lower profile battle is brewing at Agrium Inc. (USA) (NYSE:AGU) where Barry Rosenstein’s JANA Partners has called for a breakup of the company’s wholesale and retail businesses. Agrium sells agricultural products through these two channels, and its earnings multiples clock in at 10 or slightly higher. Last quarter revenue edged up 3% compared to the fourth quarter of 2011, and while earnings growth was high in percentage terms that growth rate is not sustainable. Agrium’s management has resisted JANA’s move, and as a result we think it is another candidate for a watchlist rather than a portfolio.
Disclosure: I own no shares of any stocks mentioned in this article.