Daniel Loeb (Trades, Portfolio), the CEO of hedge fund known for its periodic activist ventures Third Point, had significant portfolio turnover of 40% in the fourth quarter, with 12 new stocks added.
In his fourth quarter shareholder letter, Loeb discussed his investing point of view for the current environment:
“In this environment, we are investing in companies with solid cash flow and consistent growth. The markets remain favorable for constructive engagement with management teams to improve capital allocation, streamline operations, and drive shareholder value, particularly in large cap companies which have not had to engage with shareholders in the past. We are looking to add exposure during market dislocations. After a lackluster year for credit in 2014, we are starting to see value in energy-related names and potential opportunities to reload our portfolio.”
He also gave his outlook and strategy for the near future:
“While we obviously believe our top positions will be worth more in the long run, we expect a fair amount of volatility in the interim. Avoiding dramatic downside in individual names and sizeable losses during inevitable sell-offs will be key to succeeding in this market and navigating successfully through the haunted hallways of 2015.”
Loeb’s top new names added in the fourth quarter were: Phillips 66 (PSX, Financial), Citigroup Inc. (C, Financial), EMC Corp (EMC, Financial), American International Group Inc. (AIG, Financial) and Delta Air Lines Inc. (DAL, Financial).
Loeb purchased 5 million shares of Phillips 66, a 3.2% portfolio holding. The company’s share price averaged $74 in the fourth quarter.
Phillips 66 was incorporated in Delaware on Nov. 10, 2011. Phillips 66 has a market cap of $42.41 billion; its shares were traded at around $76.62 with a P/E ratio of 10.20 and P/S ratio of 0.26. The dividend yield of Phillips 66 stocks is 2.61%. Phillips 66 had an annual average earnings growth of 26.80% over the past five years.
Loeb also purchased 5 million shares of Citigroup Inc., a 3.2% portfolio weight. Citigroup shares priced at $53 on average for the quarter.
Citigroup Inc. was incorporated in 1988 under the laws of the State of Delaware. Citigroup Inc. has a market cap of $155.11 billion; its shares were traded at around $51.20 with a P/E ratio of 17.80 and P/S ratio of 2.03. The dividend yield of Citigroup Inc. stocks is 0.08%.
Loeb purchased 7 million shares of EMC Corp, a 1.9% portfolio weight. The company’s stock price averaged $29 in the fourth quarter.
EMC Corp is a Massachusetts corporation, incorporated in 1979. EMC Corp has a market cap of $56.96 billion; its shares were traded at around $27.99 with a P/E ratio of 22.70 and P/S ratio of 2.42. The dividend yield of EMC Corp stocks is 1.59%. EMC Corp had an annual average earnings growth of 14.50% over the past 10 years. GuruFocus rated EMC Corp the business predictability rank of 4-star.
Loeb purchased 3.5 million shares of AIG Group Inc., a 1.8% portfolio weight. The shares quarterly average price was $53.
American International Group Inc. a Delaware corporation, founded in 1919. American International Group Inc. has a market cap of $75.54 billion; its shares were traded at around $53.96 with a P/E ratio of 8.90 and P/S ratio of 1.19. The dividend yield of American International Group Inc. stocks is 0.93%.
Delta Air Lines Inc. (DAL, Financial)
Loeb purchased 3.85 million shares of Delta Air Lines Inc., a 1.7% portfolio weight. The company’s quarterly share price average was $42.
Delta Air Lines Inc. was incorporated under the laws of the State of Delaware. Delta Air Lines Inc. has a market cap of $36.68 billion; its shares were traded at around $44.50 with a P/E ratio of 59.70 and P/S ratio of 0.93. The dividend yield of Delta Air Lines Inc. stocks is 0.67%. Delta Air Lines Inc. had an annual average earnings growth of 10.0% over the past five years.
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