In this article, we discuss the 10 stocks Dan Loeb’s Third Point is selling based on Q2 holdings of the fund.
Born on December 18, 1961, Daniel Seth Loeb is an American investor, philanthropist and hedge fund manager. Loeb is the chief executive officer of the New York-based hedge fund Third Point. Loeb earned his bachelor’s degree in economics from Columbia University in 1983.
Loeb founded Third Point in 1995 with $3.3 million in seed money raised from family and friends. The hedge fund is an employee-owned and SEC-registered investment advisor with more than $4 billion in assets under management.
The top ten holdings of Third Point presently account for 46.6% of the portfolio. Dan Loeb has made new purchases in 34 stocks and reduced holdings in 33 stocks in the second quarter of 2021. Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT) were among the top holdings in Third Point’s investment portfolio at the end of the second quarter of 2021.
Dan Loeb is bullish on Amazon.com, Inc., according to his hedge fund’s disclosed holdings data as of the end of the second quarter of 2021. The fund increased its holding in Amazon.com, Inc. by 28% in the second quarter, ending the period with 145,000 shares.
Alphabet Inc. is another large-cap stock in Third Point’s portfolio, in which the fund has reduced its stake by 5%. The hedge fund owns 200,000 shares of the company worth $488.36 million.
The world’s largest software company, Microsoft Corporation, is also a vital holding of the fund. The hedge fund chaired by Dan Loeb holds 1.60 million shares of the company worth $433.44 million.
Dan Loeb of Third Point
Why should we pay attention to Loeb’s stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this background in mind, let’s start our list of 10 stocks Dan Loeb’s Third Point is selling. We used Loeb’s 13F portfolio for Q2 2021 for this analysis. Loeb’s fund sold its entire stake in these stocks in Q2. Most of these are SPACs, many of which the fund exited after they completed their mergers and deals.
Dan Loeb’s Third Point is Selling These Stocks
10. Khosla Ventures Acquisition Co. (NASDAQ:KVSA)
Number of Hedge Fund Holders: N/A
Khosla Ventures Acquisition Co. (NASDAQ:KVSA) is a California-based aerospace and defense company. It helps entrepreneurs develop breakthrough technologies by providing venture capital and strategic guidance. Khosla Ventures Acquisition Co. is placed tenth on the list of 10 stocks Dan Loeb’s Third Point is selling.
In June, Valo Health and Khosla Ventures Acquisition Co. announced merging plans. According to the agreement, the combined company has a pro forma market value of $2.8 billion. Weiss Asset Management is the company’s leading shareholder, with 1.59 million shares worth $15.70 million.
9. Jaws Mustang Acquisition Corporation (NYSE:JWSM)
Number of Hedge Fund Holders: N/A
Jaws Mustang Acquisition Corporation (NYSE:JWSM) is placed ninth on the list of 10 stocks Dan Loeb’s Third Point is selling. It was formed to carry out a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar commercial combination with one or more companies.
Jaws Mustang Acquisition Corporation generated $900 million by selling 90 million shares at $10 each. The firm sold 15 million units more than expected. Barry Sternlicht is the Chairman of the firm. The biggest stakeholder of Jaws Mustang Acquisition Corporation is Aristeia Capital, with 5.05 million shares worth $50.81 million.
8. ION Acquisition Corp 2 Ltd. (NYSE:IACB)
Number of Hedge Fund Holders: N/A
ION Acquisition Corp 2 Ltd. (NYSE:IACB) is an Israeli company that intends to buy one or more businesses and assets through a merger, capital stock exchange, asset acquisition, stock purchase, or reorganization. It ranks eighth on the list of 10 stocks Dan Loeb’s Third Point is selling.
Out of the hedge funds being tracked by Insider Monkey, Boston-based hedge fund Weiss Asset Management is a leading shareholder in ION Acquisition Corp 2 Ltd. with 1.65 million shares worth more than $16.29 million.
7. IAA, Inc. (NYSE:IAA)
Number of Hedge Fund Holders: 33
IAA, Inc. (NYSE:IAA) is a digital marketplace that connects buyers and sellers of vehicles. It assists a variety of sellers in promoting and selling complete loss, damaged, and low-value automobiles. The company is placed seventh on the list of 10 stocks Dan Loeb’s Third Point is selling.
Hedge fund managers decreased their IAA, Inc. net holdings. As of the end of the second quarter, 33 hedge funds in Insider Monkey’s database held stakes in IAA, Inc., compared to 35 funds in the previous quarter.
6. HH&L Acquisition Co. (NYSE:HHLA)
Number of Hedge Fund Holders: N/A
HH&L Acquisition Co. ranks sixth on the list of 10 stocks Dan Loeb’s Third Point is selling. It is a blank check company that was incorporated in 2020 to target the healthcare sector in Asia.
The first public offering of 36 million units of HH&L Acquisition Co. was priced at $10.00 per share.
5. Figure Acquisition Corp. I (NYSE:FACA)
Number of Hedge Fund Holders: N/A
Figure Acquisition Corp. I (NYSE:FACA) is a newly established blank check company founded on December 15, 2020, as a Delaware corporation. The company was formed with the goal of conducting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar commercial combination with one or more corporations.
4. Fifth Wall Acquisition Corp. I (NASDAQ: FWAA)
Number of Hedge Fund Holders: N/A
SmartRent, Inc. (NYSE:SMRT) completed its merger with Fifth Wall Acquisition Corp. I (NASDAQ: FWAA), a publicly listed special purpose acquisition company. It stands fourth on the list of 10 stocks Dan Loeb’s Third Point is selling.
3. Ferrari N.V. (NYSE:RACE)
Number of Hedge Fund Holders: 27
Ferrari N.V. (NYSE:RACE) ranks third on the list of 10 stocks Dan Loeb’s Third Point is selling. The company designs, manufactures and markets high-end sports vehicles.
Exane BNP Paribas analyst Giulio Pescatore downgraded the stock to “Neutral” from “Outperform” and gave a price target of $256. Pescatore predicts 2021 will be the “slowest first year of cyclical recovery in recent history,” lowering his volume forecasts for 2021-2023 to 10 million units by 4%.
Ensemble Capital, an investment management firm, in its second-quarter 2021 investor letter mentioned Ferrari N.V.. Here is what the fund said:
“Ferrari: After posting standout performance in 2020, beating the S&P 500 by over 20%, Ferrari’s share price performance has lagged for much of this year. The main issue this quarter was the company pushing out their medium-term financial targets due to development and production delays caused by COVID, but this only led to a 1% decline in the stock price for the full quarter. While we believe the company did a fantastic job maintaining production in light of COVID, it did not surprise us that some of their longer-term, new model introductions might be delayed by a couple of quarters. While disappointing of course, Ferrari is curating a set of extremely exclusive mechanical works of art and we are much happier seeing them take the time to do things right, rather than rushing to meet a self-imposed financial target.”
2. Equitrans Midstream Corporation (NYSE:ETRN)
Number of Hedge Fund Holders: 27
Equitrans Midstream Corporation (NYSE:ETRN) is placed second on the list of 10 stocks Dan Loeb’s Third Point is selling. It is a US-based natural gas gathering company.
In the second quarter, Equitrans Midstream Corporation’s EPS came in at $0.13, missing the estimates by $0.09. However, income investors will applaud as the company declared a quarterly dividend of $0.15 per share, in line with the previous. BofA analyst Chase Mulvehill on September 28 restored coverage of Equitrans Midstream Corporation with a “Neutral” rating, and the price target was set at $11.
As of the second quarter of 2021, 27 hedge funds have positions in Equitrans Midstream Corporation, compared with 28 in the previous quarter.
1. Diversey Holdings, Ltd. (NASDAQ:DSEY)
Number of Hedge Fund Holders: 12
Diversey Holdings, Ltd. (NASDAQ:DSEY) supplies high-quality cleaning, sanitation, and hygiene solutions for the hotel, healthcare, food and beverage, food service, retail, and facility management industries. It stands first on the list of 10 stocks Dan Loeb’s Third Point is selling.
On October 12, Mizuho analyst Christopher Parkinson initiated coverage of Diversey Holdings, Ltd. with a “Neutral” rating, and the firm gave a price target of $19.
Intermede Investment Partners is Diversey Holdings, Ltd.’s leading shareholder, with 4.50 million shares. Fund managers decreased their net holdings in Diversey Holdings, Ltd. As of Q2 2021, 12 hedge funds have positions in Diversey Holdings, Ltd., compared with 21 in the previous quarter.
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This article is originally published at Insider Monkey.
