"Tracking John Paulsons Paulson & Company Portfolio  Q4 2014 Update"
"John Paulsons U.S. long portfolio decreased from $24.08B to $19.36B this quarter.Paulson & Company's largest three positions are Shire plc, Allergan Inc., and Time Warner Cable.Paulson & Co. added Salix Pharmaceuticals and increased Actavis plc, Allergan Inc., Mylan Inc., Time Warner Cable, and Whiting Petroleum this quarter.This article is part of a series that provides an ongoing analysis of the changes made to John Paulsons US stock portfolio on a quarterly basis. It is based on Paulsons regulatory  filed on 02/17/2015. Please visit our  to get an idea of his investment philosophy and our  highlighting the funds moves during Q3 2014.This quarter, Paulsons US long portfolio decreased ~20% from $24.08B to $19.36B. There are 63 13F securities in the portfolio although only 37 of them are significantly large equity holdings (more than 0.5% of the US long portfolio). The article is focused on the larger holdings. The top-five positions are Shire plc, Allergan Inc., Time Warner Cable, SPDR Gold ETF, and Covidien plc and they together account for over one-third of the entire portfolio. The largest holding is Shire plc at 9.14% 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 story, check-out .Stake Disposals:AbbVie Inc. (ABBV): ABBV was a fairly large 3.12% of the US long portfolio stake established last quarter at prices between $52 and $59.62. It was disposed of this quarter at prices between $52.90 and $69.71. The stock currently trades at $61.30.Aetna Inc. (AET): AET was a 2.62% of the US long portfolio position. The original position was established in Q4 2012 at prices between $40 and $47 and was increased substantially the following two quarters at prices between $45.50 and $63.54. This quarter, the stake was sold at prices between $73.43 and $90.84 and it currently trades at $97.92. Paulson harvested large long-term gains from this position.Athlon Energy (ATHL): ATHL was a small 1.40% of the US long portfolio position established last quarter at prices between $41.34 and $58.32. On September 29, 2014 Encana (ECA) announced the acquisition of ATHL at $58.50 cash and that transaction closed mid-November 2014.Dollar General (DG): The ~1% of the US long portfolio DG position was established in Q1 2014 at prices between $55 and $63 and doubled the following quarter at prices between $53.50 and $62.82. It was disposed of this quarter at prices between $58.51 and $71.29. The stock currently trades at $71.69.Hartford Financial Services Group (HIG): The 0.50% of the US long portfolio HIG position was first purchased in 2009. It was an activist stake and Paulson pushed for changes at the company - in Q1 2012, he called to spin-off the P&C business which he argued will increase shareholder value by 60%. He experienced limited success and in Q1 2013, the position was reduced by 40% at prices between $22.44 and $26.46 and the following quarter saw another 45% stake reduction at prices between $24.82 and $31.43. Q2 2014 saw a further 25% reduction at prices between $33.30 and $36.67 and last quarter there was another 28% reduction at prices between $33.85 and $37.80. This quarter finally saw the elimination at prices between $35.47 and $42.27. The stock currently trades at $41.47.Kodiak Oil & Gas (KOG): KOG was a 1.46% position purchased in Q2 2013 at prices between $7.47 and $9.60. It was almost doubled in Q3 2013 at prices between $8.42 and $12.06. Whiting Petroleum acquired Kodiak Oil & Gas in an all-stock deal (0.177 shares of Whiting for each share of Kodiak held) that closed in December 2014.Vodafone Group (VOD): VOD was a very small 0.57% position as of Q2 2013. It was substantially increased to a 4.53% position in Q3 2013 at prices between $28.50 and $35.12. Q4 2013 saw a ~76% increase at prices between $34.43 and $39.31. In Q1 2014, the share count reduced as a result of Vodafones Verizon stake disposal: VOD ADR holders received 6 new shares for 11 old shares held. They also received a $4.9 special dividend and 0.26 shares of Verizon for each share of VOD. This quarter, the fairly large 3.65% stake as of last quarter was eliminated at prices between $29.67 and $36.55. The stock currently trades at $35.91.New Stakes:Salix Pharmaceuticals (SLXP) and Talisman Energy (TLM): SLXP and TLM are fairly large positions established this quarter. SLXP is a 3.45% of the US long portfolio stake established at prices between $91.47 and $156.24 and the stock currently trades at $158. TLM is a 2.84% of the US long portfolio position purchased at prices between $3.69 and $8.65. TLM is being acquired by Repsol SA (REPYY) for $8 per share and shareholders approved the deal last week. There was a lot of M&A speculation in SLXP and a deal with Valeant Pharmaceuticals (VRX) for $158 per share in cash was reported yesterday.Stake Decreases:Bank of America (BAC) 2019 WTS: This is a very small 0.82% of the US long portfolio position. It was reduced by ~16% this quarter. As the position size is very small, the activity does not indicate a clear bias.Cablevision Systems (CVC): CVC is a 1.46% of the US long portfolio stake that was first purchased in Q4 2012 at prices between $13.65 and $18.52. In Q1 2013, the position was increased by around one-third at prices between $13.76 and $15.75. Q2 2013 saw an additional 24% increase at prices between $13.93 and $16.82. Q1 2014 saw an about-turn as around 8% of the position was sold at prices between $15.85 and $18.15 and this quarter saw a further ~29% reduction at prices between $17.24 and $21.32. The stock currently trades at $19.86.Covidien plc (COV): The large 5.31% stake was established as a merger-arbitrage position - Medtronic (MDT) agreed to acquire COV in June 2014 ($35.19 in cash and 0.956 of MDT for each share of COV held) and that transaction closed last month. The position was increased by ~80% last quarter at prices between $82.54 and $91.76 but reduced by ~20% this quarter at prices between $82.20 and $104.Equinix Inc. (EQIX): EQIX is a 2.11% of the US long portfolio position first purchased in Q2 2012 at prices between $147 and $175 and doubled in Q3 2012 at prices between $165 and $203. Q2 2013 saw a reversal as the position was reduced by half at prices between $176 and $230. Q3 2013 saw a 20% increase at prices between $165 and $203 and that was followed with a 74% increase in Q4 2013 at prices between $155 and $184. This quarter, the pattern reversed again: 17% reduction at prices between $192 and $234. The stock currently trades at $235.Family Dollar Stores (FDO): The 1.74% FDO position was almost eliminated this quarter at prices between $76.37 and $79.78. It was established in Q1 2013 at prices between $54.87 and $64 and increased by ~50% in Q2 2013 at prices between $57.42 and $65.49. Q3 2013 saw further buying as the stake was increased by another ~50% at prices between $62 and $75. The pattern reversed in Q4 2013: ~13% reduction at prices between $63.58 and $72.95. The selling increased the following quarter as the position was reduced by one-third at prices between $57 and $67.50. Q2 2014 saw a ~24% stake increase at prices between $56 and $69. The pattern reversed again last quarter: one-third reduction at prices between $60 and $80.22. The stock currently trades at $78.27.NOTE: Dollar Tree (DLTR) is set to acquire FDO in a cash-and-stock deal ($59.60 cash and $14.90 in stock).HCA Holdings (HCA): HCA was a small 0.83% of the US long portfolio position in Q2 2014. It was increased by almost 80% last quarter at prices between $54.52 and $73.48. This quarter saw an about-turn as the position was reduced by ~22% at prices between $62.94 and $74.96. The stock currently trades at $69.79.MGM Resorts (MGM): MGM was a huge position established in Q2 2010 at prices between $9.48 and $15.89. The stake was reduced by ~18% in Q1 2014 at prices between $23.25 and $28.29 and the following quarter saw a 5% reduction at prices between $23 and $26.70. This quarter saw a further ~70% reduction at prices between $18.01 and $23.25. The stock currently trades at $22.63 and the remaining stake is at 0.77% of the portfolio (1.42% of the business). Paulson is harvesting long-term capital gains from this position.PetSmart Inc. (PETM): PETM was a small 1.21% of the US long portfolio position established last quarter. It was purchased at prices between $59.80 and $72.27 and reduced by ~52% this quarter at prices between $64.69 and $81.44. The stock currently trades at $82.91.Popular Inc. (BPOP): The 1.10% BPOP stake was reduced by ~17% this quarter. The position size is very small and the activity is minor to indicate a clear bias.Realogy Holdings (RLGY): RLGY is a 2.12% of the US long portfolio (6.31% of the business) position that was reduced by ~23% this quarter at prices between $33.91 and $46.69. The original investment was made prior to the October 2012 IPO. The stock is currently trading at $47.48 and shows a return of around ~41% since IPO.Sprint (S): S was Paulsons largest position in Q2 2013 at 9.90% of the US long portfolio. The stake was established in Q4 2012 and doubled in Q1 2013. In Q3 2013, the position was reduced to a 2.27% stake at prices between $5.50 and $7.25. Q4 2013 saw a 13% increase at prices between $5.97 and $10.79. This quarter, the position was reduced by ~53% at prices between $3.81 and $6.34. The stock currently trades at $4.83 and the remaining stake is very small at 0.65% of the portfolio.Tim Participaceoes S A (TSU): TSU is a small 0.38% of the US long portfolio position. It was established in Q2 2014 at prices between $23.50 and $30.16 and reduced by ~14% last quarter at prices between $24 and $29.64. This quarter saw a further 28% reduction at prices between $21.51 and $27.52. The stock currently trades at $21.60.Verizon Communications (VZ): VZ was a 1.56% of the US long portfolio position established in Q1 2014 as a result of Vodafones Verizon stake disposal: Paulson held Vodafone stock for which he received 0.26 shares of Verizon stock for each share of Vodafone held. This quarter, the stake was almost eliminated at prices between $45.42 and $51.50. The stock currently trades at $48.97. Last quarter had also seen a ~14% reduction at prices between $48.40 and $51.97.AngloGold Ashanti (AU): The 1.18% AU position was reduced by ~4.5% in Q2 2014 at prices between $15.42 and $18.57. Q1 2014 also saw a ~11% reduction at prices between $11.39 and $19.36. Last two quarters have seen marginal selling. It is a long-term position that has been in the portfolio since 2009. The stock currently trades at $11.47. Paulson controls 6.49% of the business.Caesars Acquisition Company (CACQ): CACQ is a 0.65% of the US long portfolio stake (9% of the business) established in Q4 2013 and reduced marginally in the last two quarters. Caesars Acquisition is a spin-off from Caesars Entertainment and the terms of the deal allowed existing shareholders to get CACQ shares at $9.43 (rights offering). Paulson probably took this option to establish the position. The stock currently trades well below that at $7.87.Cobalt International Energy (CIE): CIE was a minute 0.12% of the US long portfolio stake as of Q1 2013. The position was increased to a substantial 2.63% stake in Q2 2013 at prices between $25 and $29. Q3 2013 saw a reversal as ~17% of the position was sold at prices between $24.40 and $30.20. In Q4 2013, the stake was increased by 12.5% at prices between $22.49 and $25. The position was more than doubled in Q1 2014 at prices between $15.85 and $19.46 and the following quarter saw a further 52% increase at prices between $17.20 and $19.36. Last two quarters have seen only very minor activity. The stock currently trades well below his purchase price ranges at $8.86 and the position stands at 1.92% of the US long portfolio (10.12% of the business). For investors attempting to follow Paulson, CIE is a good option to consider for further research.Grifols S A (GRFS): GRFS is a fairly large 3.12% of the US long portfolio position that was marginally reduced in the last three quarters. As the activity is minor, it does not indicate a change in bias.Oasis Petroleum (OAS): OAS was a very small 0.25% of the US long portfolio position as of Q3 2013. The stake was increased substantially to a 2.24% position in Q4 2013 at prices between $43 and $57. It was increased by an additional one-third in Q1 2014 at prices between $39 and $47. Last two quarters have seen minor selling. The stock currently trades well below his purchase price ranges at $16.65. For investors attempting to follow Paulson, OAS is a good option to consider for further research.Shire PLC ADR (SHPG): SHPG is Paulsons largest position at 9.14% of the US long portfolio. It was first established in Q3 2012 at prices between $85 and $94. In Q2 2013, the position was doubled at prices between $87 and $100. In Q2 2014, the stake was again increased by ~36% at prices between $142 and $236. Last quarter saw a whopping ~170% increase at prices between $232 and $263. This quarter saw a minor reduction. The stock currently trades at $237.Note: On July 18, 2014, AbbVie Inc. (ABBV) agreed to buy Shire PLC for $53B but they called off the deal three months later.  Shire earned a break-up fee of $1.6B. Last month, SHPG agreed to acquire NPS Pharmaceuticals (NPSP) for $5.2BMGIC Investment (MTG), Novagold (NG), & Radian Group (RDN): These are small positions (less than 1% of the US long portfolio) that were reduced further this quarter. The MTG stake was increased slightly after the quarter ended. Paulson controls 4.49% of the business.Stake Increases:Actavis plc (ACT): ACT was a minutely small 0.29% of the US long portfolio position in Q2 2014. It was increased by just over 250% last quarter to a ~1% stake at prices between $202 and $248. This quarter saw a further ~47% increase at prices between $217 and $271. The stock currently trades outside those ranges at $296.Allergan Inc. (AGN): AGN is a merger-arbitrage stake established in Q2 2014 when it traded between $117 and $174. This quarter saw a further 18% increase at prices between $177 and $214. The stock currently trades at $234. On November 18th 2014, Actavis plc agreed to acquire Allergan Inc. in a cash-and-stock deal valued at $219 per share. Earlier last year, Bill Ackman collaborated with Valeant Pharmaceuticals (VRX) in a bid to force a merger between VRX and AGN that ultimately failed.Caesars Entertainment (CZR): CZR is a 1.1% position (9.43% of the business) that was marginally increased this quarter. The position was increased by 5.2% in Q4 2013 at prices between $16.74 and $22.39 and another 11% in Q1 2014 at prices between $19 and $26.47. The stock currently trades at $10.94. The original holding is from prior to the 02/2012 IPO.DirecTV (DTV): DTV is a merger arbitrage stake established in Q2 2014. AT&T (T) is acquiring DTV in a deal worth $95 per share ($28.50 cash and $66.60 stock). The stock is currently at $87.26.Mallinckrodt PLC (MNK): MNK is a 3.37% of the US long portfolio position established in Q3 2013 at prices between $42 and $47.20. It was increased by ~20% in Q2 2014 at prices between $60.28 and $82.70. Last quarter saw an additional one-third increase at prices between $68.12 and $90. The stock currently trades well outside those ranges at $118. This quarter saw a very minor increase. Mallinckrodt was spun-off from Covidien plc (COV) on July 1, 2013 (one share of MNK for every eight shares of COV). Paulson took the position soon after - the stake is at around 7.9% of the entire business. He is sitting on huge gains on this position.Mylan Inc. (MYL): MYL is a 4.35% of the US long portfolio position. The original stake was purchased in Q1 2010 at prices between $17 and $23. Q1 2013 saw a 25% reduction at prices between $27.54 and $31 and the following quarter saw another one-third reduction at prices between $28.70 and $32. This quarter saw a ~20% increase at prices between $45.27 and $58.62. The stock trades currently at $57.87.Time Warner Cable (TWC): TWC is a large 6.83% of the US long portfolio stake established in Q3 2013 at prices between $107 and $118. The position was almost doubled in Q4 2013 at prices between $110 and $138. The aggressive stake build-up worked almost immediately as Comcast (CMCSA) agreed to buy TWC in an all-stock deal (announced 2/14/2014, 2.875 shares of CMCSA for each share of TWC held). Q2 2014 saw a 15% reduction at prices between $133 and $148 and last quarter the pattern reversed with a 42% increase at prices between $141 and $155. This quarter saw an additional ~19% increase at prices between $132 and $155. The stock currently trades at $149.Alibaba Group (BABA): BABA is a very small 1.02% of the US long portfolio position purchased last quarter at prices between $86.10 and $93.89 and increased marginally this quarter. The stock currently trades at $86.64.T-Mobile USA (TMUS): The stake was acquired as a result of the reverse-merger and IPO transaction of MetroPCS with T-Mobile USA. MetroPCS was a 2.19% of the US long portfolio established in Q3 2012. This was a timely purchase for Paulson and he has large unrealized gains. The position has seen some activity since although overall it has seen only a marginal reduction.Whiting Petroleum (WLL): WLL was a very small 0.31% of the US long portfolio position in Q3 2013. The stake was increased to a large 3.15% position in Q4 2013 at prices between $58 and $70. Q1 2014 saw a 9% trimming at prices between $56 and $71. This quarter saw an about-turn as the stake was increased by ~44% as result of Whitings acquisition of Kodiak that closed in December 2014 - Paulson had a ~26M share position in Kodiak that converted into Whiting stock (0.177 shares of Whiting for each share held). WLL stake is now at 2.29% of the portfolio (8.01% of the business). For investors attempting to follow Paulson, WLL is a very good option to consider for further research. It currently trades well below his purchase price ranges at $38.15.Kept Steady:Extended Stay America (STAY): STAY is a fairly large 4.70% of the US long portfolio position. The stake came about as a result of the firms IPO in November 2013. Extended Stay America filed Chapter 11 bankruptcy on June 16, 2009 and an investment group consisting of Paulson & Company, Blackstone Group, and Centerbridge Partners bought Extended Stay America out of bankruptcy in October 2010. The IPO has already made the firms more than three times their investment. It is interesting that Paulson has chosen to hold on. STAY currently trades at $21.23 compared to the IPO offering price of $20.Houghton Mifflin Harcourt (HMHC): HMHC is a 3.31% of the US long portfolio position established in Q4 2013 as a result of its November 2013 IPO. The company filed for Chapter 11 bankruptcy protection in March 2012. Paulson held senior debt that got converted into equity. The IPO was priced at $12 per share and it currently trades at $20.07.SPDR Gold Trust (GLD): GLD was Paulsons largest position by far at 19.03% of the US long portfolio as of Q1 2013. It was reduced by more than half in Q2 2013 at prices between $116 and $155. The original stake was established in Q1 2009 at prices between $82.71 and $97.80. It was reduced by ~45% in 2011 at much higher prices and since then had been kept relatively steady. The stock currently trades at $115. The position was kept steady in the last six quarters and it is currently his fourth-largest 13F position at 6% of the US long portfolio.Other very small positions (less than 0.5% of the US long portfolio each) in the portfolio include Agnico Eagle Mines (AEM), Allied Nevada Gold (ANV), BAC 2018 WTS, Dex Media (DXM), Enzymotec Ltd. (ENZY), Felcor Lodging (FCH), Gold Fields Ltd. (GFI), Gulf Coast Ultra Deep Royalty (GULTU), Howard Hughes Corporation (HHC), International Tower Hill, Iamgold Corp. (IAG), Kamada Ltd. (KMDA), Novacopper Inc. (NCQ), Post Holdings Inc. (POST), Randgold Resources (GOLD), Sibanye Gold (SBGL), Spansion Inc. (CODE), Strategic Hotels & Resorts (BEE), Valeant Pharmaceuticals (VRX), Vanda Pharma (VNDA), Whitewave Foods (WWAV), and William Lyon Homes (WLH). Since the quarter ended, Paulson doubled the stake in Post Holdings. He controls 8.4% of the business. Although these positions are very small relative to the size of the portfolio, it should be noted that he owns significant stakes in the following businesses: 9.14% of Vanda Pharmaceuticals and 19.52% of Enzymotec Ltd.,The spreadsheet below highlights changes to Paulsons US stock holdings in Q4 2014:"