"Tracking John Paulson’s Paulson & Company Portfolio – Q4 2019 Update"
"John Paulson’s 13F portfolio value decreased from $4.99B to $4.63B this quarter.Paulson & Company's largest three positions are Bausch Health, SPDR Gold ETF, and Allergan plc.The ViacomCBS stake was substantially increased during the quarter.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 02/14/2020. Please visit our  to get an idea of his investment philosophy and our  for the fund’s moves during Q3 2019.This quarter, Paulson’s 13F portfolio value decreased ~7% from $4.99B to $4.63B. There are 37 13F securities in the portfolio although only 23 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 Bausch Health, SPDR Gold ETF, Allergan plc, Discovery Communications, & Horizon Therapeutics and they add up to ~51% 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:Callon Petroleum (CPE) and Presidio Inc. (PCRX): The 1.88% CPE stake was purchased last quarter at prices between ~$4 and ~$5.50 and disposed this quarter at prices between $3.60 and $4.85. The stock currently trades at $2.85. PSDO was a small 0.90% of the portfolio merger-arbitrage stake established last quarter. They went private in a $16 all-cash deal that closed in December.Note:  Callon Petroleum is merging with Carrizo Oil & Gas (CRZO).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.  Next quarter saw a ~20% selling at prices between $59 and $79. There was a ~300% stake increase last quarter. Last September, shareholders received a pre-dissolution distribution of $51.50 per share. The stock is no longer traded.Spark Therapeutics (ONCE): ONCE is a merger-arbitrage stake established in Q2 2019 at prices between $97.50 and $114. There was a ~90% stake increase last quarter at prices between $96 and $106. Roche (RHHBY) acquired Spark Therapeutics in a $114.50 all-cash deal that closed in December.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 in November.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 $20.25. 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 had seen another ~75% selling at prices between $15 and $20. The remainder stake was disposed this quarter at prices between $19.50 and $30.Lyft Inc. (LYFT): LYFT was a 2.77% of the portfolio position. It had an IPO last March. Shares started trading at ~$78 and currently goes for ~$44.70. Paulson was an early investor in Lyft having participated in funding rounds prior to the IPO. Last quarter saw the position reduced to a minutely small stake at prices between $41 and $67.50. The remainder stake was disposed this quarter.PG&E Corp (PCG): The very small ~0.50% of the portfolio stake in PCG was purchased in Q2 2019 at prices between $17 and $24. Last quarter saw a ~13% trimming and the disposal this quarter was at prices between $3.75 and $12.25. The stock is now at $17.92.Sotheby’s (BID): BID was a medium-sized merger-arbitrage stake established in Q2 2019. It was taken private at $57 per share by a group headed by Patrick Drahi.Tesla (TSLA) Puts: The 2.41% of the portfolio short stake in TSLA thru Puts was established in Q2 2019 as the stock traded between $179 and $292. It currently trades at $901. This quarter saw the stake disposed as the underlying traded between ~$230 and ~$430.Versum Materials (VSM): The very small ~1% portfolio stake was eliminated during the quarter as the business got acquired by Merck KGaA for $53 per share cash in a transaction that closed in October.New Stakes:Pretium Resources (PVG): PVG is a very small 0.62% of the portfolio stake purchased this quarter at prices between $8.70 and $12.50 and the stock currently trades well below that range at $7.81.Stake Decreases: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 in Q2 2019: ~45% stake increase at prices between $116 and $168. Last quarter saw another ~30% stake increase at prices between $156 and $170. The stock is now at ~$200 and it is now a top three position at ~11% of the portfolio. This quarter saw a ~9% trimming.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 last June.Wellcare Health Plans (WCG): Centene acquired 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 last March. Paulson bought the merger-arbitrage stake in H1 2019 at prices between $247 and $299.  The position was sold down by ~85% this quarter at prices between $258 and $333. The transaction closed last month.Caesars Entertainment (CZR): The minutely small 0.35% stake was reduced by ~60% during the quarter.Stake Increases:ViacomCBS (VIAC): Paulson had a small ~1% of the portfolio stake in Viacom as of last quarter. Following the ViacomCBS merger transaction, they increased the stake substantially to 5.44% of the portfolio at prices between $35.50 and $42.75. The stock currently trades well below that range at $28.26. For investors attempting to follow, VIAC is a good option to consider for further research.Sprint (S): Sprint is a 1.80% of the portfolio position built at prices between $5.50 and $8. The stock is now at $10.05. There was a ~27% stake increase this quarter at prices between $5.19 and $6.50.Note: Earlier this week, the terms of the merger with T-Mobile was adjusted so that Sprint shareholders will receive one share of T-Mobile for every 11 shares of Sprint. This is compared to 9.75 shares agreed previously.Barrick Gold (GOLD): GOLD is a very small 0.82% of the portfolio stake established in Q2 2019. There were marginal increases over the last two quarters.Kept Steady: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 $26.50 and the stake has become the largest position in the portfolio at 13.46%.Note: Paulson controls ~6% of Bausch Health.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 ~$155. The remaining stake is still the second-largest at 13.33% of the portfolio.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 $29.20 and the stake is now fairly large (top five) at 7.19% 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 in October that he believes Discovery shares are dramatically undervalued – he has been buying shares all the way from the teens to ~$28 per share.Horizon Pharmaceuticals (HZNP): The 6.38% 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 $35.50. There was a ~23% stake increase last quarter at prices between $23 and $28.AngloGold Ashanti (AU): AU is a 6.16% 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 $22.13.Note: Paulson controls ~3% of AngloGold Ashanti.Takeda Pharma (TAK): The fairly large 5.64% 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 $18.79.Mylan Inc. (MYL): MYL stake is now at 5.21% 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 at $21.15. There was a ~9% stake increase last quarter.Brightsphere Investment Group (BSIG): The 4.41% 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 $10.95.Note: Paulson’s ownership stake in BSIG is ~23%.Novagold (NG): NG is a 4.25% 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 $9.41.Note: Paulson has a high cost-basis on NG and controls ~7% of the business.Dish Network (DISH): DISH is a 3.81% 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 $40.73. There was a ~11% trimming in Q4 2017 while next quarter there was a ~19% stake increase.Pacira Biosciences (PCRX): The 1.68% PCRX stake was built in Q2 & Q3 2019 at prices between $35.50 and $48 and it is now at $48.49.TIM Participacoes (TSU): TSU is a 1.53% 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. Last quarter also saw a ~25% selling at prices between $14 and $16.40. The stock is currently trading at $19.29.Agnico Eagle Mines (AEM), Endo International plc (ENDP), International Tower Hill Mines (THM), and Trilogy Metals (TMQ): These small (less than ~1% of the portfolio each) stakes were kept steady this quarter.Note 1: Paulson has a ~32% ownership stake in International Tower Hill Mines.Note 2: Although the position size relative to the size of the portfolio is very small, it is significant that Paulson owns ~10.5% of Synthesis Energy Systems (SES).The spreadsheet below highlights changes to Paulson’s US stock holdings in Q4 2019:Regulatory filings thru 11/26/2019: 13D/A – 11/18 – CPE – Callon Petroleum – 10.34M shares – 4.5% of business, 13D/A – 11/6 – 21.59M shares – 9.5% of business. 13D/A – 10/22 – letter to board, 13D/A – 9/10 – letter to mgmt. – has details on stake establishment in the $4 to $5.5 price range. Form 4 – 10/21 & 10/24 – Synthesis Energy – SYMX –warrants exercise & disposal,11/18 - Callon Petroleum “truce” – no longer opposed to Carrizo Oil & Gas merger but reduced position."