In this article, we discuss the top 15 stock picks of billionaire Dan Loeb.
Dan Loeb is an American billionaire, activist investor, and hedge fund manager best known as the founder and CEO of Third Point, a New York-based hedge fund. Known for his bold activist strategies, sharp letters to corporate boards, and remarkable investment acumen, Loeb has become one of the most influential figures in the hedge fund industry. His ability to identify undervalued companies, implement changes to unlock value, and deliver strong returns for investors has solidified his reputation as a financial powerhouse. He was born in 1961 in California. Coming from an affluent family, his father was a partner at a prominent law firm, and his mother was a historian. Loeb attended the University of California, Berkeley, where he initially studied at the business school before transferring to the College of Letters and Science. He graduated with a degree in economics in 1983.
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Loeb’s early career in finance saw him working at Warburg Pincus in private equity and later at Citigroup in risk arbitrage. These roles provided him with the foundation to understand markets, value creation, and capital allocation. In 1995, Loeb launched Third Point LLC with $3.3 million in capital, including $300,000 of his own money. The firm initially operated as a scrappy startup but quickly grew in prominence thanks to Loeb’s exceptional returns and his willingness to engage in public activist campaigns. As of the end of the third quarter of 2024, Third Point manages over $7.4 billion in 13F securities. Third Point has delivered double-digit annualized returns since its inception, with Loeb’s keen investment instincts driving its success. Loeb takes large, concentrated positions in companies he believes can be turned around.
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For this article, we selected stocks by combing through the 13F portfolio of Third Point at the end of the third quarter of 2024. These stocks are also popular among other hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Dan Loeb of Third Point
Billionaire Dan Loeb’s Top Stock Picks
15. Roper Technologies, Inc. (NASDAQ:ROP)
Number of Hedge Fund Holders: 40
Third Point’s Stake: $133.5 million
Roper Technologies, Inc. (NASDAQ:ROP) provides software, engineered products and solutions. There are several compelling factors that make this company a strong investment. Firstly, as per the reports for the third quarter of 2024, revenue increased 13% to $1.76 billion; organic revenue increased 4%. This reflects that the company’s core business is expanding independently and its increased customer demand, which is a strong indicator of sustainable growth. Moreover, GAAP net earnings increased 6% to $368 million; adjusted net earnings increased 7% to $499 million. This demonstrates the improved core performance of the company and its sustainable earnings, which serves as a positive signal for consistent financial health. Secondly, the company plans to acquire Transact Campus for a net purchase price of $1.5 billion, including a $100 million tax benefit resulting from the transaction. The net purchase price represents approximately 14 times the expected 2025 EBITDA. Moreover, the company plans to acquire Procare Solutions for a net purchase price of approximately $1.75 billion, including a $110 million tax benefit resulting from the transaction.
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