John Paulson connects with Clo
Jean Paulson (Trades, Portfolio), head of investment firm Paulson & Co., unveiled its third-quarter portfolio earlier this month.
With the long-term goal of capital preservation, above-average returns and low correlation to the market, the activist guru’s New York-based company specializes in event arbitrage strategies, including merger arbitrage. , bankruptcy reorganizations and troubled credit.
True to this strategy, the investor revealed that he had established two new positions during the quarter, liquidated four stocks and added or reduced a number of other existing investments. Notable transactions included the addition of Cloudera Inc. (CLDR, financial) to the portfolio, the disposal of Dish Network Corp. (PLATE, financial participation) and reductions in the company Horizon Therapeutics PLC (HZNP, Financial), Royal Dutch Shell PLC (RDS.A, financial) and Kansas City Southern (KSU, Financial issues).
Paulson took a 4.6 million share stake in Cloudera (CLDR, Financial), attributing it to 2.09% of the equity portfolio. During the quarter, the stock traded at an average price of $ 15.87 per share.
The Santa Clara, California-based software company that provides a cloud-based platform for data engineering, data warehousing, machine learning and analytics, has a market cap of 4 , 74 billion dollars; its shares were trading around $ 15.99 on Tuesday with a price-to-book ratio of 4.26 and a price-to-sell ratio of 5.3.
The GF value line suggests that the stock is significantly overvalued based on the company’s historical ratios, past performance and future earnings projections.
GuruFocus rated Cloudera’s financial strength at 4 out of 10. Due to asset growth at a faster rate than revenue growth, the low Altman Z-Score of 1.46 warns that the company could be at risk of bankruptcy .
The company’s profitability was rated 3 out of 10. Although the operating margin is expanding, its returns on equity, assets and capital are negative and underperform the majority of its competitors. Cloudera however has a moderate Piotroski F-Score of 6 out of 9, which indicates that conditions are typical for a stable business. Income per share has also declined in recent years.
Among the gurus invested in Cloudera,
Carl Icahn (Trades, Portfolio) holds the largest stake with 17.67% of its shares outstanding.
Mario gabelli (professions, portfolio),
Paul Tudor Jones (Trades, Portefeuille), Pioneer Investments and
Baillie Gifford (Trades, Portfolio) also hold the share.
Network of dishes
After several quarters of cuts, the investor gave up the remaining 3.3 million shares of Dish Network (PLATE, Financial). The transaction had an impact of -3.34% on the equity portfolio. The shares traded at an average price of $ 42.61 each during the quarter.
GuruFocus estimates that it lost 33.02% on the investment, which was established in the first quarter of 2017 and was previously its eighth largest stake.
Based in Englewood, Colorado, the satellite TV provider has a market cap of $ 16.87 billion; its shares were trading at around $ 31.55 on Tuesday with a price-to-earnings ratio of 7.64, a price-to-book ratio of 1.13 and a price-to-sell ratio of 1.12.
According to the GF Value Line, the stock is currently slightly undervalued.
Dish Network’s financial strength has been rated 5 out of 10 by GuruFocus. Although the company has sufficient interest coverage, the Altman Z-Score of 1.49 warns that it could be in danger of bankruptcy as income per share has declined in recent years.
The company’s profitability fared better, scoring a 7 out of 10 thanks to an expanding operating margin and strong returns that outperform the majority of its industry peers. Dish also has a moderate Piotroski F-Score of 6 and a predictability rank of one in five stars. GuruFocus claims that companies with this rank are reporting an average of 1.1% per year over a 10-year period.
With a 7.18% stake, Dodge & Cox holds the largest position in Dish Network. The other big gurus shareholders are Gabelli,
Alain Fournier (professions, portfolio),
Jeremy grantham (professions, portfolio),
Stanley druckenmiller (Trades, Portfolio), Pioneer Investments,
Joel greenblatt (professions, portfolio),
Jim simons (business lines, portfolio) ‘Renaissance Technologies and
Murray Stahl (trades, portfolio).
Impacting the stock portfolio by -4.08%, the guru slowed down Horizon Therapeutics (HZNP, Financial) by 22.8%, selling 1.8 million shares. The stock traded at an average price per share of $ 103.79 during the quarter.
He now owns 6.17 million shares in total, representing 19.25% of the equity portfolio and remains his second largest holding. GuruFocus data shows Paulson has gained 285.28% on the investment since the second quarter of 2017.
The Irish biopharmaceutical company, which focuses on developing drugs to treat rare and rheumatic diseases, has a market capitalization of $ 23.41 billion; its shares were trading at around $ 103.23 on Tuesday with a price-to-earnings ratio of 44.5, a price-to-book ratio of 5.27 and a price-to-sell ratio of 8.17.
Based on the GF value line, the stock appears to be slightly overvalued.
GuruFocus has rated Horizon Therapeutics’ financial strength at 5 out of 10. In addition to adequate interest coverage, the company has a strong Altman Z-Score of 4.14 which indicates it is in good standing. Return on invested capital also dwarfs the weighted average cost of capital, meaning that value is created as the business grows.
The company’s profitability was rated 4 out of 10 despite strong margins and higher returns than most competitors. Horizon also has a moderate Piotroski F-Score of 5 as well as a one-star predictability rating.
Paulson owns a 2.72% stake in Horizon Therapeutics, making him the largest guru shareholder. Simons’ company, the
Vanguard Healthcare Fund (professions, portfolio),
Steven cohen (Trades, Portefeuille), Pioneer Investments, Greenblatt and
Ray dalio (Trades, Portfolio) also have positions in the stock.
Royal Dutch Shell
Paulson cut his Royal Dutch Shell (RDS.A, financial) of 50.84%, selling 1.03 million Class A shares. The transaction had a -1% impact on the equity portfolio. During the quarter, the stock traded at an average price of $ 40.36 per share.
The investor now owns 1 million shares in total, or 1.27% of the share portfolio. GuruFocus says it has gained around 3.58% on the investment since its inception in the second quarter.
The Netherlands-based oil and gas company has a market capitalization of $ 161.21 billion; its Class A shares were trading at around $ 41.67 on Tuesday with a price-to-earnings ratio of 38.94, a price-to-pound ratio of 1.02 and a price-to-sell ratio of 0.76.
The GF value line suggests that the stock is currently valued at fair value.
Mitigated by a low cash-to-debt ratio and low interest coverage, Royal Dutch Shell’s financial strength was rated 4 out of 10 by GuruFocus. The Altman Z-Score of 1.63 warns that the company could be threatened with bankruptcy if it does not improve its liquidity. WACC also overshadows ROIC, implying that it struggles to create value.
The company’s profitability was rated 6 out of 10, thanks to margins and returns above more than half of its industry peers, a high Piotroski F-Score of 8, indicating that operations are healthy and one-star business predictability. Income per share has also seen a decline in recent years.
Ken fisher (Trades, Portfolio) is Royal Dutch Shell’s largest guru shareholder with a 0.47% stake. Hotchkis & Wiley,
Richard pzena (trades, portfolio) and the Simons office.
Kansas City South
With an impact of -0.95% on the equity portfolio, the guru slashed his Kansas City Southern (KSU, Financial) holding 82.35%, selling 140,000 shares. The shares traded at an average price of $ 278.75 each during the quarter.
Paulson now owns a total of 30,000 shares, giving him 0.23% space in the stock portfolio. GuruFocus data shows it has lost around 2.22% so far on the investment. The company is in the process of being acquired by Canadian Pacific Railway Ltd. (TSX: CP, Financial).
The railroad company, headquartered in Kansas City, Missouri, has a market cap of $ 26.62 billion; its shares were trading around $ 292.59 on Tuesday with a price-to-earnings ratio of 286.86, a price-to-book ratio of 6.83 and a price-to-sell ratio of 9.23.
According to the GF Value Line, the stock is currently significantly overvalued.
GuruFocus rated Kansas City Southern’s financial strength at 4 out of 10 despite adequate interest coverage and a high Altman Z-Score of 3.3. However, WACC exceeds ROIC, so the company struggles to create value.
The company’s profitability fared much better, scoring a 9 out of 10 thanks to the expansion of the operating margin. Its returns, however, are underperforming its competitors. Kansas City Southern also has a high Piotroski F-Score of 7, but the five-star predictability ranking is under scrutiny even though it has seen steady growth in profit and revenue. GuruFocus claims that companies with this rank are reporting an average of 12.1% per year.
With a 2.41% stake,
Bill Gates The Foundation Trust (Trades, Portfolio) is the company’s largest shareholder guru. Pioneer Investments, Jones, Grantham, Fisher,
Louis moore bacon (professions, portfolio),
Michel Price (professions, portfolio),
Lee ainslie (trades, portfolio), Gabelli and
Prem Watsa (Trades, Portfolio), among others, also hold the share.
Additional transactions and portfolio composition
During the quarter, Paulson also took a new position in Stamps.com Inc. (STMP, Financial), added to its holdings in Perpetua Resources Corp. (PPTA, financial) and DiDi Global Inc. (HAVE I GOT, financial), while reducing its stakes in Occidental Petroleum Corp. (OXY, financial), Viatris Inc. (VTRS, financial) and BP PLC (PA, financial), among others.
The Guru’s $ 3.51 billion equity portfolio of 38 stocks is the most heavily invested in the healthcare sector with a weighting of 43.77%, followed by the commodities space with a representation of 19.24%.