"Tracking John Paulson’s Paulson & Company Portfolio – Q3 2019 Update"
"John Paulson’s 13F portfolio value decreased from $5.88B to $4.99B this quarter.Paulson & Company's largest three positions are SPDR Gold ETF, Allergan plc, and Bausch Health.The large long position in SPDR Gold Trust ETF is maintained.This article is part of a series that provides an ongoing analysis of the changes made to John Paulson’s 13F stock portfolio on a quarterly basis. It is based on Paulson’s regulatory  filed on 11/14/2019. Please visit our  to get an idea of his investment philosophy and our  for the fund’s moves during Q2 2019.This quarter, Paulson’s 13F portfolio value decreased ~15% from $5.88B to $4.99B. There are 45 13F securities in the portfolio although only 33 of them are significantly large equity holdings (more than 0.5% of the 13F portfolio). The article is focused on the larger holdings. The top five positions are SPDR Gold ETF, Allergan plc, Bausch Health, Celgene Corp, and Discovery Communications and they add up to ~43% of the portfolio.John Paulson is best known for his highly leveraged bets against the real-estate bubble that netted him billions in the aftermath. To learn more about that, check-out the book “”.Note: Paulson & Company is known to have a huge position in Fannie/Freddie (FNMA) (FMCC) although the details have not been disclosed.Stake Disposals:Anadarko Petroleum (APC), Array Biopharma (ARRY), and Red Hat Inc. (RHT): These were merger-arbitrage stakes that got eliminated as the deals closed during the quarter. APC was a large 5.18% established last quarter.  Occidental Petroleum (OXY) agreed to acquire Anadarko in a cash-and-stock deal ($59 cash and 0.2934 shares of OXY for each APC held) announced in May. The transaction closed in August. ARRY was a medium-sized 2.58% stake established last quarter. Pfizer (PFE) acquired Array Biopharma in a $48 per share all-cash deal announced in June. The transaction closed the following month. RHT was a small 0.61% of the portfolio stake established in Q4 2018 and increased by ~12% next quarter. In October, IBM agreed to buy Red Hat for $190 per share cash and that transaction closed in July.T-Mobile US (TMUS): A 2.46% portfolio stake in TMUS was purchased in Q1 2017 at prices between $56.60 and $65 and increased by ~46% the following quarter at prices between $60 and $68. The three quarters thru Q1 2018 had seen a combined ~37% selling at prices between $55 and $65.50 and that was followed with a similar reduction in Q3 2018 at prices between $58 and $70.50. Q4 2018 also saw a ~20% selling at prices between $61 and $70. The stock is now at ~$79. This quarter saw the position sold out at prices between $74 and $84.Vaneck Vectors Gold Miners (GDX) Puts: The vast majority of the 2.82% Short position in GDX thru Puts was purchased last quarter as the underlying traded between $20 and $26. GDX currently trades at $26.66.  The stake was disposed this quarter as the underlying traded between $24.50 and $31.Stewart Information Services (STC) and Tribune Media (TRCO): The minutely small ~0.50% portfolio stakes were disposed during the quarter.New Stakes:Callon Petroleum (CPE) and Presidio Inc. (PCRX): The 1.88% CPE stake was purchased this quarter at prices between ~$4 and ~$5.50 and the stock currently trades at $3.81. PSDO is a small 0.90% of the portfolio merger-arbitrage stake established this quarter. They are going private in a $16 all-cash deal.Note:  Callon Petroleum is merging with Carrizo Oil & Gas (CRZO). Paulson initially opposed the merger and Callon cut the CRZO offer from $1.2B to $723M. Earlier this month Paulson said they are no longer opposed to the merger, but has chosen to reduce the position (sold more than half the original position). Their current stake is currently at ~4.5% of the business.Stake Decreases:Celgene Corp (CELG): CELG was a large (top five) 6.35% merger-arbitrage stake established in Q1 2019. Bristol Myers Squibb bought Celgene in a cash-and-stock deal ($50 cash and 1 share of BMY for each share of CELG held) that closed last week.Wellcare Health Plans (WCG): Centene is acquiring Wellcare Health Plans in a cash-and-stock deal (3.38 shares of Centene and $120 cash for each share of Wellcare Health Plans held) that was announced in late March. WCG is currently at ~$322. Paulson bought the merger-arbitrage stake in July and increased it by ~85% during the quarter at prices between $247 and $299.  There was a ~5% trimming this quarter.Tesla (TSLA) Puts: The 2.41% of the portfolio short stake in TSLA thru Puts was established last quarter as the stock traded between $179 and $292. It currently trades at $331. This quarter saw a ~7% trimming.Sotheby’s (BID): BID was a medium-sized merger-arbitrage stake established last quarter. It was taken private at $57 per share by a group headed by Patrick Drahi.TIM Participacoes (TSU): TSU is a ~1% portfolio stake first purchased in Q2 2014 at prices between $24 and $30. The position had remained relatively steady since. Q1 2018 saw a ~10% selling at prices between $19.50 and $22.50. The stock is currently trading below those ranges at $16.  This quarter saw a ~25% selling at prices between $14 and $16.40.PG&E Corp (PCG): The very small ~0.50% of the portfolio stake in PCG was purchased last quarter at prices between $17 and $24. It is now at $7.55. This quarter saw a ~13% trimming.International Seaways (INSW): INSW position came about as a result of its spinoff from Overseas Shipholding Group (OSG) that started regular-way trading in December 2016 at ~$15 per share. It is now at $17.22. There was ~6% trimming in Q2 2017 and that was followed with ~18% selling in H2 2018 at prices between $16 and $24. Last three quarters have seen another ~75% selling at prices between $15 and $20.Lyft Inc. (LYFT): LYFT was a 2.77% of the portfolio position. It had an IPO in March. Shares started trading at ~$78 and currently goes for ~$50. Paulson was an early investor in Lyft having participated in funding rounds prior to the IPO. This quarter saw the position reduced to a minutely small stake at prices between $41 and $67.50. Lyft currently trades at $49.37.Stake Increases:Allergan plc (AGN): AGN was a minutely small 0.29% of the 13F portfolio position in Q2 2014. The following two quarters saw a ~420% increase at prices between $202 and $271. Q2 2015 saw a further ~27% increase at prices between $283 and $313. In Q4 2015 there was an about-turn: a combined ~75% selling over the next two years at prices between $192 and $320. H2 2018 also saw a ~18% selling at prices between $131 and $192. There was an about-turn last quarter: ~45% stake increase at prices between $116 and $168. This quarter saw another ~30% stake increase at prices between $156 and $170. The stock is now at ~$185 and it is now a top three position at ~10% of the portfolio.Note: Abbvie (ABBV) is buying Allergan in a cash-and-stock deal ($120.30 cash and 0.8660 shares of ABBV for each AGN held) announced in June.Mylan Inc. (MYL): MYL stake is now at 4.76% of the portfolio. The original stake was purchased in Q1 2010 at prices between $17 and $23. Last significant buying was in Q2 2015: ~50% increase at prices between $58 and $76. 2017 & 2018 had seen a ~50% selling at prices between $30.50 and $47. The stock currently trades near the low end of those ranges at $18.78. There was a ~9% stake increase this quarter.Horizon Pharmaceuticals (HZNP): The 4.46% HZNP position was purchased in Q2 2017 at prices between $9.65 and $15.75 and increased by ~40% in Q4 2017 at prices between $13 and $15. The stock is now at $32.57. There was a ~23% stake increase this quarter at prices between $23 and $28.Altaba Inc. (AABA) previously Yahoo: The ~3% AABA stake was established in Q2 2017 at prices between $46 and $56 and increased by ~42% the following quarter at prices between $54.50 and $67.50. Q4 2017 saw an about turn: ~55% reduction at prices between $65 and $73. There was a ~23% stake increase in Q4 2018 at prices between $55.50 and $67 and that was followed with a ~12% increase in Q1 2019.  Last quarter saw a ~20% selling at prices between $59 and $79. In September, shareholders received a pre-dissolution distribution of $51.50 per share. There was a ~300% stake increase this quarter.Spark Therapeutics (ONCE): ONCE is a merger-arbitrage stake established last quarter at prices between $97.50 and $114 and the stock currently trades at ~$111. There was a ~90% stake increase this quarter at prices between $96 and $106. Roche (RHHBY) is acquiring Spark Therapeutics in a $114.50 all-cash deal announced in February.Pacira Biosciences (PCRX) and Sprint (S): These two small positions were increased substantially over the last two quarters. The 1.31% PCRX stake was built at prices between $35.50 and $48 and it is now at $45.65. Sprint is a 1.56% of the portfolio position built at prices between $5.50 and $8. The stock is now at $5.91.Viacom (VIAB): The ~1% VIAB position saw a ~160% stake increase in Q1 2018 at prices between $29 and $34. Q4 2018 saw a ~50% selling at prices between $25 and $34. There was a ~63% stake increase this quarter at prices between $24 and $32. The stock is now near the low end of those ranges at $24.13.Barrick Gold (GOLD): GOLD is a minutely small 0.71% of the portfolio stake established last quarter. There was a marginal increase this quarter.Kept Steady:SPDR Gold Trust (GLD): GLD was Paulson’s largest position by far at ~19% of the 13F portfolio as of Q1 2013. The original stake was established in Q1 2009 at prices between $83 and $98 and was reduced by ~45% in 2011 at much higher prices. It was reduced by more than half in Q2 2013 as well at prices between $116 and $155. Q4 2015 and the following quarter saw a combined ~60% reduction at prices between $100 and $122. The stock currently trades at ~$137. The remaining stake is still the largest at ~12% of the portfolio.Bausch Health Companies (BHC) previously Valeant Pharmaceuticals: BHC position was increased by almost 300% in Q1 2015 at prices between $143 and $205 and another ~340% the following quarter at prices between $197 and $242. Q4 2015 also saw a ~50% increase at prices between $70 and $182. The aggressive buying against falling prices continued in Q2 2016: ~44% increase at prices between $19 and $36. The stock currently trades at $28.17 and the stake has become the third-largest position in the portfolio at ~9%.Note: Paulson controls ~6% of Bausch Health.Discovery Communications (DISCA): DISCA position saw a 320% stake increase in Q1 2018 at prices between $21.50 and $26.50 while next quarter there was a ~140% further increase at prices between $21 and $24. DISCA currently trades at $33.12 and the stake is now fairly large (top five) at 5.39% of the portfolio. There was a ~22% stake increase in Q3 2017 at prices between $25.50 and $32.25.Note: Liberty’s John Malone said in an interview earlier this month that he believes Discovery shares are dramatically undervalued – he has been buying shares all the way from the teens to ~$28 per share.AngloGold Ashanti (AU): AU is a 4.68% position. It is a long-term stake that has been in the portfolio since 2009. Q4 2015 had seen a ~9% trimming while the following quarter saw a one-third reduction at prices between $7 and $14. Q2 2016 saw another ~20% reduction at prices between $13 and $18. The stock is currently at $18.49.Note: Paulson controls ~3% of AngloGold Ashanti.Takeda Pharma (TAK): The fairly large 4.56% TAK stake came about as a result of Takeda’s Shire plc acquisition in a cash-and-stock deal ($90.99 cash and 5.034 shares of TAK for each share of SHPG held). Paulson had a ~10% portfolio stake in Shire plc for which he received these shares after that transaction closed in January. Takeda currently trades at $20.55.Brightsphere Investment Group (BSIG): The ~4% BSIG stake was built in Q4 2018 at prices between $10 and $13.30. Q1 2019 saw a huge ~285% stake increase at prices between $11 and $14.25. The stock currently trades below those ranges at $9.40.Note: Paulson’s ownership stake in BSIG is ~22%.Dish Network (DISH): DISH is a 3.39% portfolio position established in Q1 2017 at prices between $58 and $64. Q2 & Q3 2017 saw a combined ~36% stake increase at prices between $52 and $66. The stock is currently well below the low end of those ranges at $34.74. There was a ~11% trimming in Q4 2017 while next quarter there was a ~19% stake increase.Novagold (NG): NG is a 2.21% of the portfolio long-term stake established in 2010. Q2 2016 saw a ~28% reduction at prices between $5 and $6.50 and that was followed with a ~13% selling in Q4 2016. The stock is currently at $6.75.Note: Paulson has a high cost-basis on NG and controls ~7% of the business.Agnico Eagle Mines (AEM), Caesars Entertainment (CZR), Endo International plc (ENDP), International Tower Hill Mines (THM), Trilogy Metals (TMQ), and Versum Materials (VSM): These small (less than ~1% of the portfolio each) stakes were kept steady this quarter.Note: Paulson has a ~32% ownership stake in International Tower Hill Mines.The spreadsheet below highlights changes to Paulson’s US stock holdings in Q3 2019:Regulatory filings thru 8/28/2019: 13D/A – 7/3 – INSW – 1.46M shares – 5% of business – reduction at ~$20 per share average. Form 4 – 6/28 – TMQ – 14.33M shares – 2.76M shares acquired @ $1.52 thru warrant execution."