Billionaire Dan Loeb Reiterates Bullish Thesis on Baxter, Holds on to Allergan Stake & Other Market Commentaries

#4. Alphabet Inc. (NASDAQ:GOOGL)

– Shares owned by Third Point LLC as of March 31: 700,000

– Value of Third Point LLC’s holding as of March 31: $534.03 Million

The New York-based asset manager acquired a new stake of 700,000 Class A shares of Alphabet Inc. (NASDAQ:GOOGL) during the first quarter of 2016, which was valued at $534.03 million on March 31. The new position accounted for 4.9% of the hedge fund’s entire portfolio. Although Alphabet’s advertising business appears to have matured, the company continues to be on track for meaningful growth in the years ahead. Analysts at MKM Partners, who have a ‘Buy’ rating on Alphabet and a price target of $930, believe there is “potential for better margin especially as we believe YouTube profitability should be ramping up this year and next”. Moreover, the analysts believe the 2016 Summer Olympic Games and the U.S. presidential election will contribute $5 billion in additional ad spending in the second half of the year, with roughly $1.2 billion being allocated online. Hence, Alphabet is anticipated to capture $300 million-to-$400 million from increased ad spending from the two events. Alphabet’s Class A shares are down 2% year-to-date. Ken Fisher’s Fisher Asset Management owns 995,319 Class A shares of Alphabet Inc. (NASDAQ:GOOGL) as of the end of the second quarter.

#5. Yum! Brands Inc. (NYSE:YUM)

– Shares owned by Third Point LLC as of March 31: 5.50 Million

– Value of Third Point LLC’s holding as of March 31: $450.18 Million

Dan Loeb’s Third Point LLC upped its position in Yum! Brands Inc. (NYSE:YUM) by 5.42 million shares during the January-to-March period, ending the second quarter with 5.50 million shares. The reshuffled position was worth $450.18 million at the end of the first quarter and made up 4.2% of the firm’s portfolio. In October 2015, the owner of fast food chains KFC, Pizza Hut and Taco Bell announced plans to separate its China business into an independent, publicly-traded company, but the sale of its China franchise recently came to a standstill after failing to reach an agreement on price with the two main bidders. Yum! Brands has been under pressure from activist investor Keith Meister of Corvex Capital to cut loose its China business, as various food safety scandals involving the company’s Chinese suppliers damaged the performance of the entire company. China-based private equity fund Primavera and Singapore’s sovereign wealth fund Temesek are believed to be the primary bidders for the franchise. Larry Chen and Terry Zhang’s Tairen Capital added a 207,139-share stake in Yum! Brands Inc. (NYSE:YUM) to its portfolio during the June quarter.

Disclosure: None