"Tracking John Paulson’s Paulson & Company Portfolio – Q3 2013 Update"
"This article is part of a series that provides an ongoing analysis of the changes made to John Paulson’s US stock portfolio on a quarterly basis. It is based on Paulson’s regulatory  filed on 11/14/2013. Please visit our  to get an idea of his investment philosophy and the fund’s moves in Q2 2013.This quarter, Paulson’s US long portfolio increased ~9% from $14.18B to $15.52B. This is compared to a drop from $17.72B to $14.18B seen last quarter. There are 87 13F securities in the portfolio although only 49 of them are significantly large holdings (more than 0.5% of the US long portfolio). The top five holdings represent just over 26% of the US long assets. The largest holding is SPDR Gold Trust (GLD) at 8.46%. This is quite a shift from Q1 2013 when GLD was at 19.03%.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:Mead Johnson (MJN) & Gardner Denver (GDI): These were very small positions (less than 1% of the US long portfolio) that were eliminated this quarter. As the position sizes are very small, the activity does not indicate a clear bias.Smithfield Foods (SFD): SFD was a small 1.15% of the US long portfolio merger-arbitrage stake purchased last quarter at prices between $25.44 and $33.35. In May 2013, Shuanghui International Holdings agreed to purchase SFD at $34 per share. The transaction closed in September thus resulting in the stake elimination.New Stakes:Time Warner Cable (TWC): TWC is a 2.88% of the US long portfolio established this quarter at prices between $107 and $118. The stock currently trades at $120. The medium-sized stake establishment indicates a bullish bias.Mallinckrodt PLC (MNK): MNK is a 1.60% of the US long portfolio position established this quarter at prices between $42 and $47.20. The stock currently trades at $47.56. Mallinckrodt is a $2.7B business that 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 just under 10% of the entire business.Stake Decreases:MGM Resorts (MGM): MGM was a huge position established in Q2 2010 at prices between $9.48 and $15.89. It was reduced by ~30% in 2011 and since then had been kept relatively steady. Last quarter saw a ~10% trimming at prices between $12.06 and $15.86. This quarter, the position was reduced further by ~12% at prices between $14.75 and $20.44. The stock currently trades at $19.45. Paulson is harvesting long-term capital gains from this position.Life Technologies (LIFE): LIFE position was established in 2011. The bulk of the stake was purchased in Q3 2012 at prices between $42.47 and $49. Paulson had huge gains from this timely purchase (Thermo Fisher offered to buy LIFE at $76 in April 2013) and harvested most of it last quarter at prices between $64.63 and $75. This quarter, the position was reduced to an insignificantly small stake at prices between $74 and $75. The stock currently trades at $75.49.Sprint Nextel (S): S was Paulson’s largest position last quarter at 9.90% of the US long portfolio. The stake was established in Q4 2012 and doubled in Q1 2013. Last quarter, the stance reversed as the position was reduced by ~15%. This quarter, the position was reduced to a 2.27% position at prices between $5.50 and $7.25. The stock currently trades at $7.42. Sprint Nextel was a risk-arbitrage position established due to Softbank’s acquisition. As such, the activity does not indicate a clear bias.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 last quarter at prices between $25 and $29. This quarter saw a minor reversal, as ~17% of the position was sold at prices between $24.40 and $30.20. The stock currently trades below those ranges at $22.87. The stake currently stands at 1.86% of the US long portfolio. For investors attempting to follow Paulson, CIE is a good option to consider for further research.Realogy Holdings (RLGY), Pioneer Natural Resources (PXD), CNO Financial (CNO), and Caesars Entertainment (CZR): These medium-sized (1% to 5% of the US long portfolio) positions were reduced incrementally this quarter. As the activity was minor and the remaining position sizes are still substantial, it does not indicate a change in bias.Interoil Corp. (IOC) and Rue21 Inc. (RUE): These were very small (less than 1% of the US long portfolio) positions that were further reduced this quarter. As the position sizes are very small, the activity does not indicate a clear bias.Stake Increases:Family Dollar Stores (FDO): FDO is a large 5.23% of the US long portfolio position established in Q1 2013 at prices between $54.87 and $64. It was increased by ~50% last quarter at prices between $57.42 and $65.49. This quarter saw further buying as the stake was increased by another ~50% at prices between $62 and $75. The stock currently trades at $70. The significant stake build-up indicates a clear bullish bias.Vodafone Group (VOD): VOD was a very small 0.57% position as of last quarter. It was substantially increased to a 4.53% position this quarter at prices between $28.50 and $35.12. The stock currently trades outside that range at $37.25. It is now Paulson’s third-largest position after SPDR Gold Trust and Family Dollar Stores. The aggressive stake build-up this quarter indicates a clear bullish bias.Grifols S A (GRFS), Anglogold Ashanti (AU), and Aetna Inc. (AET): These medium-sized positions were increased incrementally this quarter. The activity indicates a bullish bias.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 is sitting on large gains. The TMUS stake was increased by ~17% to a 3.25% of the US long portfolio position this quarter at prices between $23 and $26.12. Paulson continues to be very bullish on TMUS.Cooper Tire & Rubber (CTB): CTB is a 1.08% of the US long portfolio position purchased last quarter at prices between $23.25 and $34.66. It was increased by ~9% this quarter at prices between $28.85 and $34. The stock currently trades at $23.83. The stake is a merger-arbitrage position (a subsidiary of Apollo Tyres agreed to acquire CTB in June 2013) but the trade has not worked so far. The stake increase this quarter indicates he is continuing to stay bullish. The position is worth ~8% of the entire business.Equinix Inc. (EQIX): EQIX is a 1.42% 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. It had since been kept steady. Last quarter saw a reversal as the position was reduced by half at prices between $176 and $230. This quarter saw a 20% stake increase at prices between $165 and $203. The stock currently trades at $168. For investors attempting to follow Paulson, EQIX is a decent option to consider.Kodiak Oil & Gas (KOG): KOG was a very small 0.94% position purchased last quarter at prices between $7.47 and $9.60. It was almost doubled this quarter at prices between $8.42 and $12.06. The stock currently trades at $12.14. The stake build-up indicates a bullish bias.Belo Corporation (BLC) and M&T Bank (MTB): BLC and MTB now account for 0.80% and 1.26% of the US long portfolio. They were increased substantially this quarter. But as the relative sizes are still very small, the activity does not indicate a clear bias.The rest of the positions were left untouched:SPDR Gold Trust (GLD): GLD was Paulson’s largest position by far at 19.03% of the US long portfolio as of Q1 2013. It was reduced by more than half last quarter 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 position was kept steady this quarter and it is still his largest 13F position at 8.46% of the US long portfolio.Freeport McMoran (FCX): FCX is a 3.31% of the US long portfolio position that was increased by just over 70% last quarter. The increase was due to the result of Freeport’s acquisition of Plains Exploration & Production and McMoran Exploration that closed in the quarter - Paulson held a 3.69% position in PXP and a 1.53% position in MMR, both established in Q4 2012 as risk-arbitrage stakes. The original FCX position was established in Q4 2012 at prices between $30.81 and $42.43 and had since been kept steady. The stock currently trades at $36.83. For investors attempting to follow Paulson, FCX is a good option to consider for further research.Shire PLC ADR (SHPG): SHPG is a 2.20% of the US long portfolio stake established in Q3 2012 at prices between $85 and $94. Last quarter, the position was doubled at prices between $87 and $100 and was kept steady this quarter. The stock currently trades well outside those ranges at $136. Paulson is sitting on large gains on this position.Cablevision Systems (CVC): CVC is a 2.49% 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. Last quarter saw an additional 24% stake increase at prices between $13.93 and $16.82. It was kept steady this quarter. The stock currently trades at $14.93.Thermo Fisher Scientific (TMO): TMO is a 3.39% of the US long portfolio stake established last quarter at prices between $75.53 and $88.76. The stock currently trades outside that range at $101.Hartford Financial Services Group (HIG): The 1.20% of the US long portfolio HIG position was first purchased in 2009. It was an activist position 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 some limited success but is moving on: in Q1 2013, the position was reduced by 40% at prices between $22.44 and $26.46 and last quarter, it was further reduced by 45% at prices between $24.82 and $31.43. The stock currently trades at $35.44.AMC Networks (AMCX): AMCX is a 2.18% of the US long portfolio stake first established in Q3 2011 at prices between $33 and $37.50. Since then, the position was marginally increased. Last quarter saw a reversal as ~20% of the position was disposed of at prices between $60 and $68. The stock currently trades at $65.23. Paulson has huge long-term gains on this position.Delphi Automotive (DLPH): DLPH position was reduced to a very small 0.57% of the US long portfolio position last quarter at prices between $40.94 and $52.09. The position was established in 2011 as a result of conversion of Delphi Automotive debt to equity (at ~67c per share) as the firm emerged from bankruptcy. Paulson started harvesting the outsized gains from this position in Q1 2012.Hess Corporation (HES): HES is a 2.23% of the US long portfolio stake established in Q1 2013 at prices between $53 and $73. The position was increased by around 73% last quarter at prices between $62.87 and $74.14. The stock currently trades at $82.86.Mylan Inc. (MYL): The 2.99% MYL stake was reduced by roughly one-third last quarter at prices between $28.70 and $32. The original stake was purchased in Q1 2010 at prices between $17 and $23. The stake was kept relatively steady until Q1 2013 when it was reduced by a quarter at prices between $27.54 and $31. It was kept steady this quarter and the stock trades currently at $42.36.Radian Group (RDN), Popular Inc. (BPOP), Bank of America (BAC) WTS: These 1 to 1.5% positions were left untouched this quarter. The sizes are very small to indicate any bias.William Lyon Homes (WLH), W P Carey (WPC), Novagold (NG), Hillshire Brands (HSH), HCA Holdings (HCA), Boise Inc. (BZ), Capital One 2018 Warrants, Genworth Financial (GNW), Interdigital Inc. (IDCC), Jazz Pharmaceuticals (JAZZ), & MGIC Investment (MTG): These are very small positions (less than 1% of the US long portfolio) that were left untouched this quarter.The spreadsheet below highlights changes to Paulson’s US stock holdings in Q3 2013:"