Billionaire Paul Singer’s Top Picks for 2016

#2 Hess Corp. (NYSE:HES)

– Shares Owned by Elliott (as of December 31): 17.80 Million

– Value of Elliott’s Holding (as of December 31): $862.94 Million

Elliott Management made no changes to its equity position in Hess Corp. (NYSE:HES) during the fourth quarter, owning 17.80 million shares which accounted for 10.44% of the fund’s equity portfolio. The producer of natural gas and crude oil is one of the biggest activist targets of Mr. Singer, who initially revealed a position in Hess in the second half of 2012. The activist investor claimed that the company had lacked discipline and Board accountability, which eventually caused Hess to overstretch internationally at the expense of profiting from the drilling boom in the shale oil fields on the North American continent. Earlier this month, analysts at Goldman Sachs upgraded the stock to the prized ‘Conviction Buy’ list from ‘Neutral’, with a price target of $59, citing new project startups, shale flexibility, liquidity and its ability to find additional resources. The oil company has seen its shares decline by 44% over the past 12 months. Fir Tree, founded by Jeffrey Tannenbaum, reported a stake of 2.90 million shares of Hess Corp. (NYSE:HES) via its most recent 13F filing.

#1 EMC Corporation (NYSE:EMC)

 – Shares Owned by Elliott (as of December 31): 42.23 Million

 – Value of Elliott’s Holding (as of December 31): $1.08 Billion

Mr. Singer’s Elliott lifted its position in EMC Corporation (NYSE:EMC) by 8.23 million shares during the December quarter to 42.23 million shares. The increased stake was valued at $1.08 billion at the end of December and accounted for 13.12% of the fund’s equity portfolio. In October 2015, Dell announced an agreement to acquire the network storage giant for roughly $67 billion. Dell officials said that “the revenue synergies here are three times larger than the cost synergies”, while Mr. Singer applauded the deal by saying that “this landmark transaction will create a powerhouse with leading franchises across enterprise IT”. The shares of EMC are down by 2% since the beginning of 2016. It should be mentioned that the deal is expected to close in mid-2016. Seth Klarman’s Baupost Group added a 29.25 million-share position in EMC Corporation (NYSE:EMC) to its portfolio during the December quarter.

Disclosure: None