Billionaire Dan Loeb’s Third Point Bought Virgin Media Inc. (VMED), Sold Delphi Automotive PLC (DLPH) During Q1

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International Paper. The fund added shares of International Paper Company (NYSE:IP) during Q1, with 6.6 million shares in its portfolio per the 13F. Loeb’s quarterly letter, in addition to discussingVirgin Media Inc. (NASDAQ:VMED) and Liberty Global Inc. (NASDAQ:LBTYA), described International Paper as moving into the very attractive containerboard industry (with a majority of EBITDA coming from that business segment this year) and also making significant progress in cleaning up its balance sheet which would allow the company to return more of its cash flow to shareholders. Currently, the dividend yield is 2.5% with the company making annualized payments of $1.20 per share; Loeb wrote that he expects these payments to eventually rise as high as $2.

We actually think that we’d avoid Tiffany and Delphi- their recent financial performance has not been particularly strong, and their current valuation in terms of trailing earnings is well above value territory in each case. Delphi Automotive PLC (NYSE:DLPH) does look better in terms of forward estimates, but even if we were going to place high weight on the sell-side’s targets we’d probably favor other stocks tied to the auto industry first. As for International Paper Company (NYSE:IP), Loeb has an interesting thesis but we might want to wait for further developments in the company, and in particular wouldn’t want to recommend it to income investors until the company was closer to actually increasing its dividend.

Disclosure: I own no shares of any stocks mentioned in this article.

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