Paul Singer usually avoids mega-cap stocks like Apple Inc. (NASDAQ:AAPL) and invests in mid-cap stocks where he can take an active role in the direction of the company. Here are his latest moves:
Fox and friends. At the end of the third quarter, Singer’s largest new, non-ETF holding was in Twenty-First Century Fox (NASDAQ:FOX), which is essentially News Corp after it spun off its newspaper and publishing assets. Judging by this filing, it appears Singer has elected to roll with the higher-growth Fox as a major portion of his holdings while maintaining a smaller stake in the spinoff, particularly in News Corp (NASDAQ:NWS)’s class B shares.
Singer’s Fox stake is about eight times larger than his position in the new News Corp, and from Wall Street’s point of view, Fox has about twice the growth potential as its sister company. Interestingly, Fox is also cheaper than News Corp in terms of most metrics, particularly on a price-to-earnings growth basis; it sports a PEG ratio of 1.1, about half of what News Corp trades at. Sticking with the growth at a reasonable price theme, Singer also established a new position in Riverbed Technology, Inc. (NASDAQ:RVBD), the small-cap that’s up nearly 25% over the past month.
Don’t forget about Hess. Also, don’t forget about Hess Corp. (NYSE:HES). The oil and gas refiner and marketer has been Singer’s top stock pick for three consecutive quarters now, after he upped his stake significantly in the beginning of this year. Singer has been very involved in Hess’ board structuring this year, and successfully placed three of its candidates onto the company’s slate of directors this year.
Elliott and Singer convinced Hess to seat five additional new, independent board members, while also pushing it to split its Chairman and CEO roles into two separate positions. Hess is up more than 50% year-to-date on the back of a strong energy industry, asset sales and cost reductions. We don’t think Singer will leave this stock anytime soon.
A couple reductions and a sale. Delphi Automotive PLC (NYSE:DLPH) was cut again this quarter, but the major sale apparent in this filing is Singer and Elliott’s official closure of their BMC Software, Inc. (NASDAQ:BMC) stake. The activist had held more than 10% of his equity portfolio in the enterprise software company, which was taken private earlier this year by Bain Capital and Golden Gate Capital. BMC did gain 16% in the first four months of the year before the merger was announced, so Singer appears to have profited fairly handsomely from the stock.
In addition to cutting his stake in auto part company Delphi, the billionaire also lowered his position in NetApp Inc. (NASDAQ:NTAP) by 30%. The IT infrastructure company is still Singer’s third largest non-ETF holding, and it appears his latest move may have been a bit of profit-taking. We don’t think he’s bearish on the holding just yet, as its growth prospects are still intact at a fairly reasonably valuation.
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Hess Corp. (NYSE:HES)