META - Tracking Dan Loeb's Third Point Portfolio - Q3 2023 Update

2023-12-06 21:22:23 ET

Summary

• Dan Loeb's 13F portfolio value decreased by 3% this quarter, with the top three holdings accounting for 34% of the portfolio.
• Third Point returned negative 0.9% in Q3 2023, compared to negative 3.3% for the S&P 500 Index.
• New stakes include Meta Platforms, United States Steel, T-Mobile US, Regal Rexnord, and Telephone & Data Systems.

This article is part of a series that provides an ongoing analysis of the changes made to Dan Loeb's 13F stock portfolio on a quarterly basis. It is based on Third Point's regulatory 13F Form filed on 11/14/2023. Please visit our Tracking Dan Loeb's Third Point Portfolio series to get an idea of their investment philosophy and our last update for the fund's moves during Q2 2023.

This quarter, Loeb's 13F portfolio value decreased ~3% from $6.82B to $6.59B. The 13F portfolio is very concentrated with the top three holdings accounting for ~34% of the entire portfolio. The number of holdings decreased from 45 to 42. 24 of the holdings are significantly large (more than ~0.5% of the portfolio each) and they are the focus of this article. The largest five individual stock positions are PG&E, Microsoft Corporation, Danaher Corp, Amazon.com, and Bath & Body Works.

Third Point returned negative 0.9% in Q3 2023 compared to negative 3.3% for the S&P 500 Index. Annualized returns since December 1996 inception are at 12.6% compared to 8.8% for the S&P 500 Index. In addition to partner stakes, Third Point also invests in the float of SiriusPoint ( SPNT ) and capital from London listed closed-end fund Third Point Investors ( OTCPK:TPNTF ). To know more about Dan Loeb's Third Point, check out his letters to shareholders at their site. His activist investing style is covered in the book " The Alpha Masters: Unlocking the genius of the world's top hedge funds ".

Note 1: They have a significant portfolio of investments through their venture firm, Third Point Ventures .

Note 2: Large equity investments not in the 13F report include UBS Group AG ( UBS ), Shell plc ( SHEL ), Glencore plc ( OTCPK:GLNCY ), Sony ( SONY ), EssilorLuxottica ( OTCPK:ESLOY ), and Nestle ( OTCPK:NSRGY ). The UBS stake was built after the transaction for Credit Suisse was announced. The Shell stake was built over the three quarters through Q1 2022 while the Glencore plc position was established during Q1 2022. SONY is a $1.5B investment made in June 2019 when the stock was trading at around $50 per share. It is currently $88.40. The ESLOY investment was made in early 2019 when the stock was trading at ~$62.50 per share. It currently trades at $96.89. The NSRGY position is from 2017 and the stock has moved from ~$75 to ~$114 now.

New Stakes:

Meta Platforms ( META ), United States Steel ( X ), T-Mobile US ( TMUS ), Regal Rexnord ( RRX ), and Telephone & Data Systems ( TDS ): META is a fairly large ~5% of portfolio position established at prices between ~$283 and ~$326. The stock currently trades at ~$318. The 2.34% United States Steel stake was purchased at prices between $22.47 and $32.43 and the stock is now at $35.81. TMUS is a 2.12% position established at prices between ~$133 and $143 and it now goes for ~$156. The small 1.41% RRX stake was purchased at prices between ~$142 and ~$165. The stock is now at ~$125. The very small 0.87% TDS position was established at prices between $6.93 and $21.26. It currently trades at $18.38.

Stake Disposals:

Alibaba Group Holdings ( BABA ) : The 3.60% BABA stake was established during Q1 2023 at prices between ~$81 and ~$121 and the stock currently trades at $71.49. There was a ~120% stake increase last quarter at prices between ~$79 and ~$103. The stake was disposed this quarter at prices between ~$84 and ~$102.

HCA Healthcare ( HCA ) : HCA was a 2.67% of the portfolio position established during Q1 2023 at prices between ~$243 and ~$264. The last quarter saw a ~30% reduction at prices between ~$264 and ~$304. The disposal this quarter was at prices between ~$246 and ~$298. The stock currently trades at ~$252.

Nvidia ( NVDA ) : NVDA is a 3.10% of the portfolio position purchased last quarter at prices between ~$262 and ~$438. The stake was disposed this quarter at prices between ~$409 and ~$494. The stock is now at ~$455.

Advanced Micro Devices ( AMD ), Denbury ( DEN ), Horizon Therapeutics ( HZNP ), and Micron Technology ( MU ) : These small (less than ~2% of the portfolio each) stakes were disposed during the quarter.

Stake Increases:

PG&E Corp ( PCG ) : PCG is currently the largest 13F stake at ~14% of the portfolio. The position came about as a result of participating in a PIPE (terms for the bankruptcy exit financing in 2020 called for up to $10.50 per share purchase price). The last several quarters saw only minor adjustments. There was a ~9% trimming last quarter while this quarter saw a ~5% increase. The stock currently trades at $17.24.

Microsoft Corporation ( MSFT ) : The ~11% of the portfolio MSFT position was purchased during Q4 2022 at prices between ~$214 and ~$257 and it is now at ~$369. There was a ~45% stake increase last quarter at prices between ~$275 and ~$348. That was followed by a similar increase this quarter at prices between ~$312 and ~$358.

Amazon.com ( AMZN ) : AMZN is a ~9% of the portfolio position last quarter at prices between ~$98 and ~$130 and the stock currently trades above that range at ~$145. There was a ~14% stake increase this quarter at prices between ~$126 and ~$145.

Intercontinental Exchange ( ICE ) : The ~4% ICE stake was established last quarter at prices between ~$104 and ~$113 and it is now at the top of that range at ~$113. There was a ~30% stake increase this quarter at prices between ~$107 and ~$118.

Hertz Global ( HTZ ) : The 1.76% HTZ position was purchased during Q4 2021 at prices between ~$19 and ~$35. The three quarters through Q4 2022 saw a ~10% reduction at prices between ~$16 and ~$25 while the last two quarters saw the stake doubled at prices between ~$15 and ~$20. There was a further ~11% increase this quarter. The stock is now well below the low end of their purchase price ranges at $8.96.

Jacobs Solutions ( J ), Option Care Health ( OPCH ), and Uber Technologies ( UBER ): The 3.73% Jacobs Solutions position was increased by 29% this quarter at prices between ~$119 and ~$137. The stock currently trades at ~$129. OPCH is a 2.67% position that saw a ~55% increase this quarter at prices between $30.66 and $35.45. It is now at $29.23. The 2.93% UBER stake was increased by 51% this quarter at prices between $42.11 and $49.46 and it is now at $59.75.

Vistra Corp. ( VST ): The small 1.81% portfolio stake in VST saw a ~9% increase this quarter.

Stake Decreases:

Danaher Corp. ( DHR ) : The top three 9.22% DHR stake was established in Q3 2015 at prices between $60.90 and $71.50 and increased by two-thirds in Q1 2016 at prices between $62 and $74. There was a ~20% stake increase in Q1 2019 at prices between $98 and $132 while H1 2020 saw a ~20% selling at prices between $129 and $177. H1 2022 had seen another similar reduction at prices between ~$237 and ~$316. There was a ~17% stake increase during Q3 2022 at prices between ~$247 and ~$302. It currently trades at ~$221. There was a minor ~6% trimming this quarter.

Note: The prices quoted above are adjusted for the Fortive ( FTV ) spin-off in July 2016.

DuPont de Nemours ( DD ) : The 4.69% of the portfolio stake in DD was established in Q1 2021 at prices between ~$69 and ~$86 and it is now at $70.63. There was a ~11% stake increase in Q4 2021 while the next quarter saw similar trimming. Q3 2022 saw a ~23% selling at prices between ~$50 and ~$63 while in the next quarter there was a similar increase at prices between ~$50 and ~$72. Q1 2023 saw a one-third further increase at prices between ~$68 and ~$78. That was followed by a ~15% increase last quarter. This quarter saw a ~10% trimming.

International Flavors & Fragrances ( IFF ) : IFF is a 2.56% of the portfolio stake established during Q4 2022 at prices between ~$85 and ~$108. There was a ~15% stake increase over the last two quarters, while this quarter saw a ~7% trimming. The stock is now at $75.71.

Taiwan Semi ( TSM ) : The 2.34% TSM stake was established last quarter at prices between ~$82 and ~$107 and it now goes for $97.85. The stake was decreased by 28% this quarter at prices between ~$84 and ~$105.

Alphabet Inc. ( GOOG ) : GOOG is a 1.79% of the portfolio position purchased during Q1 2023 at prices between ~$87 and ~$109. The last quarter saw a ~70% reduction at prices between ~$104 and ~$128. This quarter also saw a ~37% selling at prices between ~$117 and ~$139. The stock currently trades at ~$131.

Global Blue ( GB ) : The very small 0.78% stake in GB saw marginal trimming this quarter.

Kept Steady:

Bath & Body Works ( BBWI ) : The large (top five) 7.10% of the portfolio stake in BBWI was established during Q3 2022 at prices between ~$26 and ~$41. There was a ~60% stake increase in the next quarter at prices between ~$31 and ~$44. The last two quarters saw a marginal increase. The stock currently trades at ~$37.

Note: They have a ~6% ownership stake in the business.

Ferguson plc ( FERG ) : FERG is a 3.17% of the portfolio position purchased during Q3 2022 at prices between ~$103 and ~$128. There was a ~40% stake increase during Q1 2023 at prices between ~$128 and ~$150. The stock is now at ~$175.

American International Group ( AIG ) : AIG is a 2.71% of the portfolio stake established during Q4 2022 at prices between ~$48 and ~$64. There was a ~42% selling during Q1 2023 at prices between ~$47 and ~$65. The stock currently trades at $65.37.

WESCO International ( WCC ) : The small 1.36% stake in WCC was kept steady this quarter.

The spreadsheet below highlights changes to Loeb's 13F stock holdings in Q3 2023:

For further details see: