"Tracking Dan Loeb’s Third Point Portfolio – Q3 2020 Update"
"Dan Loeb's 13F portfolio value increased from ~$7.30B to ~$10B this quarter. The number of positions increased from 36 to 47.Third Point added PG&E while dropping Baxter International and Raytheon Technologies during the quarter.The top three positions are at ~22% of the portfolio: PG&E Corp, Alibaba Group Holdings, and Walt Disney.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  filed on 11/16/2020. Please visit our  to get an idea of their investment philosophy and our  for the fund’s moves during Q2 2020.The 13F portfolio is very concentrated with the top three holdings accounting for ~22% of the entire portfolio. Recent 13F reports show around 40 long positions. This quarter, Loeb’s 13F portfolio value increased ~37% from $7.30B to $10B as the equity portion of the portfolio shifted significantly to the long-side during the quarter. The number of holdings increased from 36 to 47. The largest five individual stock positions are PG&E, Alibaba Group Holdings, Walt Disney, Danaher Corp, and Amazon.com.Third Point returned 3% thru October this year compared to a 2.8% for the S&P 500 Index. Annualized returns since December 1996 inception are at 14.1% compared to 8.3% for the S&P 500 Index. AUM is distributed among several strategies of which the long/short equity portion accounts for ~40%. In addition to partner stakes, Third Point also invests the float of Third Point Reinsurance (TPRE) and capital from London listed closed-end fund Third Point Offshore (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 "".Note: Large equity investments not in the 13F report include Sony (SNE), EssilorLuxottica (ESLOY), and Nestle (NSRGY). All three are activist stakes. SNE is a $1.5B investment made in June 2019 when the stock was trading at around $50 per share. It is currently at ~$90. The ESLOY investment was made in early 2019 when the stock was trading at ~$62.50 per share. It currently trades at $68.30. The NSRGY position is from 2017 and the stock has rallied ~50% since. Also, they have a significant portfolio of investments thru their venture firm . Such stakes include investments in Yellowbrick Data, Aryaka, Kentik, Kumu Networks, Ushur, etc. Also, there are a couple of investments that have already achieved Unicorn status – SentinelOne (~10% of the business) and Upstart (~15% of the business).New Stakes:PG&E Corp (PCG): PCG is currently the largest 13F stake at ~8% of the portfolio. The stock currently trades at $12.66. Third Point’s Q2 2020 letter had the following regarding the investment in PG&E – the position came about as a result of participating in a PIPE (terms for the exit financing called for up to $10.50 per share purchase price). They believed the stock was undervalued as there are several risk mitigation measures in place – wildfire fund (insurance against wildfires), $3B per year investments in wildfire safety, ESG plans, etc.Microsoft Corp (MSFT), Fortive Corp (FTV), and TransDigm Group (TDG): These are medium-sized new positions established this quarter. The 2.31% of the portfolio MSFT stake was purchased at prices between ~$200 and ~$232 and the stock currently trades at ~$210. FTV is a 2.29% of the portfolio position established at prices between ~$56 and ~$65 and it is now well above that range at $71.32. The ~2% TDG stake was purchased at prices between ~$411 and ~$519 and it is currently well above that range at $574.Expedia Group Inc. (EXPE), Pinterest Inc. (PINS), and Avantor Inc. (AVTR): These are small new stakes purchased during the quarter. The ~1.5% EXPE position was established at prices between ~$80 and ~$103 and it is now well above that range at ~$120. PINS is a ~1.5% stake purchased at prices between ~$23 and ~$45 and the stock currently trades well above that range at $66.85. The ~1% AVTR stake was established at prices between ~$17 and ~$23 and it now goes for $25.92.Note: Avantor is back in the portfolio after a quarter’s gap.Global Blue Group Holding AG (GB) and WTS, Caesars Entertainment (CZR), Foley Transamine Acquisition (WPFU) Units, Planet Fitness (PLNT), Reinvent Technology (RTPU) Units, GoodRx Holdings (GDRX), Cohn Robbins Holdings (CRHCU), Palantir Technologies (PLTR), 10x Genomics (TXG), Pactiv Evergreen Inc. (PTVE), and Chindata Group holdings (CD): These are very small (less than ~0.75% of the portfolio each) new stakes established this quarter.Note: Third Point has a ~7% of the business stake in Global Blue Group Holding AG. GoodRx Holdings, Palantir Technologies, 10x Genomics, Pactiv Evergreen, and Chindata Group Holdings had IPOs during the quarter. Also, Foley Transamine Acquisition had a SPAC IPO in May and Reinvent Technology had a SPAC IPO in September.Stake Disposals:Baxter International (BAX): BAX was Loeb’s largest position at ~15% of the 13F portfolio as of Q1 2020. It was reduced by roughly two-thirds last quarter at prices between $79 and $94. The remaining 4.71% portfolio stake was disposed this quarter at prices between ~$78 and ~$91. The original position was from 2015 at a cost-basis of ~$40 per share. The stock currently trades at ~$77. Third Point realized long-term gains.Note: The position had seen selling since 2018: December 2018 saw a ~22% selling (8M shares) at $68.62 and that was followed with another ~18% selling (5M shares) in Q2 2019 at $76.37. Both these were block trades. Q3 2019 saw a ~27% selling at prices between $81 and $90. That was followed with another one-third selling in Q1 2020 at prices between $71.50 and $93.30.Raytheon Technologies (RTX): The position came about due to the merger of United Technologies with Raytheon and the separation from Carrier (CARR) & Otis (OTIS) that closed in April. Terms called for United Technologies to be renamed Raytheon Technologies and for United Technologies shareholders to receive one share of CARR and 0.5 shares of OTIS for each share held. Third Point had a 4M share position in United Technologies. They also increased the resultant stake by ~30%. This quarter saw the position eliminated at prices between $56.50 and $64. RTX currently trades at $69.76.Far Point Acquisition (FPAC) & Units: The 2.20% position established in Q2 2018 had since been kept steady. Far Point Acquisition was a SPAC that Third Point co-sponsored. They controlled 24.9% of the business. In January, FPAC merged with Global Blue in a $2.6B deal that closed in August.Activision Blizzard (ATVI), Cannae Holdings (CNNE), Evergy Inc. (EVRG), Gap Inc. (GPS), Nike Inc. (NKE),  and Take-Two Interactive (TTW): These small (less than ~1.5% of the portfolio each) stakes established last quarter were disposed this quarter.Stake Increases:Alibaba Group Holdings (BABA): BABA is a large (top three) 7.42% of the portfolio position established last quarter at prices between $187 and $229 and the stock currently trades well above that range at ~$271. This quarter saw a ~25% stake increase at prices between ~$216 and ~$298.JD.com (JD) and Facebook Inc. (FB): These medium-sized positions purchased last quarter were substantially increased this quarter. JD is a 3.45% of the portfolio stake established at prices between $40 and $62 and the stock currently trades at $87.74. There was a ~35% stake increase this quarter at prices between ~$60 and ~$83. The ~3% FB position was purchased at prices between $154 and $242 and the stock is now at ~$270. This quarter saw a one-third stake increase at prices between ~$230 and ~$304.Burlington Stores (BURL): The 3.44% portfolio stake in BURL was established in Q2 2019 at prices between $146 and $177. The position saw a ~115% stake increase next quarter at prices between $168 and $205. Q1 2020 saw a ~20% selling at prices between $121 and $248 while last quarter there was a similar increase at prices between $141 and $217. This quarter also saw a ~20% stake increase at prices between ~$171 and ~$217. The stock currently trades at ~$233.Visa Inc. (V): The 3.10% V stake was established in Q2 2018 at prices between $118 and $136. The stock is now well above that range at ~$204. Last two quarters had seen a ~17% reduction at prices between $136 and $213 while this quarter there was a ~25% stake increase at prices between ~$189 and ~$217.TE Connectivity (TEL): The 1.52% TEL stake was established in Q1 2020 at prices between $53 and $100 and it is now at ~$111. Last two quarters have seen a ~15% stake increase.Black Knight Inc. (BKI), Dish Network Notes, Intuit Inc. (INTU), Equitrans Midstream (ETRN), and iShares 1-3 year treasury bond: These small (less than ~1.5% of the portfolio each) stakes were increased during the quarter.Stake Decreases:Walt Disney (DIS): DIS is currently the third-largest 13F position at 6.58% of the portfolio. It was purchased in Q1 2020 at prices between $85 and $148. Last quarter saw a ~300% stake increase at prices between $94 and $127. The stock currently trades at ~$141. This quarter saw a ~4% trimming.Note: Third Point's bullish thesis on Disney is on the idea that Direct-to-Consumer (DTC) streaming is a big opportunity: Disney+ reached 60M subscribers in nine months. This is compared to Netflix (NFLX) which took seven years to reach this milestone.Amazon.com (AMZN): AMZN is a large (top five) ~6.5% of the portfolio position purchased in Q4 2019 at prices between $1705 and $1870. The stake saw a ~200% increase in Q1 2020 at prices between $1677 and $2170. The stock is now well above those ranges at ~$3099. Last two quarters have seen minor trimming.IAA Inc. (IAA): IAA is a large 5.49% of the portfolio stake established in Q4 2019 at prices between $36 and $47. Last quarter saw a ~63% stake increase at prices between $25 and $45. IAA is a June 2019 spinoff of the salvage auction business of KAR Auctions (KAR). It started trading at ~$40 and currently goes for $60.10. This quarter saw marginal trimming.Adobe Systems (ADBE): ADBE is a 3.14% stake that saw a ~75% increase in Q2 2018 at prices between $212 and $258 and another ~30% increase next quarter at prices between $242 and $275. There was a ~30% selling in Q1 2020 at prices between $285 and $383. The stock is now at ~$463. This quarter saw a minor ~4% trimming.Iqvia Holdings (IQV): The 2.85% IQV position was purchased in Q3 2018 at prices between $99 and $131 and increased by ~25% in Q3 2019 at prices between $143 and $162. The stock currently trades at ~$170. Last three quarters have seen only minor adjustments.Kept Steady:Danaher Corp. (DHR): The top five 6.46% 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 the last two quarters saw a ~20% selling at prices between $129 and $177. It currently trades at ~$226.Note: The prices quoted above are adjusted for the Fortive (FTV) spin-off in July 2016.Fidelity National Information Services (FIS): The 4.71% FIS position came about as a result of FIS acquiring WorldPay in a cash-and-stock transaction (0.9287 FIS shares and $11 cash for each share held) that closed in July 2019. Third Point had a ~3% of the portfolio (2.2M shares) position in WorldPay. It was established in the 2017-2018 timeframe at a cost-basis of ~$70 per share. The resultant FIS stake was also increased by ~25% in Q3 2019 at prices between $125 and $140. Last quarter saw another ~37% stake increase at prices between ~$115 and ~$143. It currently trades at ~$144.Charter Communications (CHTR): The large 4.68% CHTR position was established in Q1 2020 at prices between $372 and $543 and increased by ~150% last quarter at prices between $424 and $547. It is now at ~$655.Salesforce.com (CRM): The 4.68% CRM position was more than doubled in Q4 2018 at prices between $121 and $160. Q3 2019 saw the position almost doubled again at prices between $140 and $160. Last two quarters had seen a ~37% selling at prices between $124 and $192. The stock is now at ~$258.S&P Global (SPGI): SPGI is a 2.80% position established in Q2 2016 at prices between $96 and $128. The position has wavered. Recent activity follows: the five quarters thru Q1 2019 saw a combined ~60% selling at prices between $164 and $213. Since then, the activity has been minor. The stock is now at ~$338.Ferrari NV (RACE): RACE is now a ~2% of the portfolio position. A small position was purchased in Q4 2019. Last quarter saw the stake built at prices between ~$130 and ~$180. The stock currently trades at ~$210.Bristol Myers Squibb Rights (BMY.RT), Kadmon Holdings (KDMN), Replay Acquisition Corp (RPLA), and Square Inc. (SQ): These small (less than ~1.3% of the portfolio each) stakes were kept steady this quarter.Note: The bulk of the stake in Kadmon Holdings is from prior to its IPO in July 2016 (PE investment). The biopharma was founded in 2010 by Sam Waksal (ImClone insider trading conviction and 7-year prison term infamy, circa 2003). Loeb controls ~6.5% of Kadmon Holdings (KDMN).The spreadsheet below highlights changes to Loeb’s 13F stock holdings in Q3 2020:Q2 2020 Letter, July Report, etc.: Performance: thru July negative 3.7% vs positive 2.4% for S&P 500 index. 13.8% since 1996 inception vs 8.2% for S&P 500 Index. Exposure: 97.2% long and 32.3% short for a net exposure of 64.9% as of July. This is compared to 91.7% long and 38.7% short for a net exposure of 53% in April. Commentary on Alibaba & JD.com – bullish on both… Amazon – one of the highest cash returns on capital invested (“CROCI”). Although, shares are up, their cost basis is lower and so they continue to benefit. Walt Disney – Direct-to-Consumer (DTC) streaming is a big opportunity – Disney+ reached 60M subscribers in nine months – this is compared to Netflix which took seven years to reach this milestone - bullish. PG&E – participated as a PIPE investor (exit financing called for up to $10.50 per share purchase price)  - significantly undervalued – several risk mitigation measures: Wildfire Fund (insurance against wildfires), $3B per year investments in wildfire safety, ESG plans, etc. Prudential plc – thinks an independent Jackson can unlock significant value by closing the still-large complexity discount in the stock – fast-growing Asia business should re-rate higher as it gets valued as a pure-play – looking for restructuring updates around August 11 earnings call. S&P Global – cost control, prudent reinvestment, and efficient capital allocation – attributes that strengthen our view that it is a highly defensive, long-term compounder.Regulatory filings thru 8/26/2020: 13D/A – 8/17 – FPAC – 19.69M shares – 24.9% of business."