"Tracking Dan Loeb’s Third Point Portfolio – Q3 2014 Update"
"Loeb's 13F portfolio increased ~7% this quarter from $8.13B to $8.71B. The number of positions remained steady at 41.Third Point established a large position in Alibaba Group and medium-sized stakes in eBay Inc. and Bed Bath & Beyond. American International Group and T-Mobile US were eliminated as well.The top-three positions are Dow Chemical (17.60%), Ally Financial (11.13%), and Actavis plc (7.96%) which together is at almost 37% of the entire portfolio.This article is part of a series that provides an ongoing analysis of the changes made to Dan Loeb’s US stock portfolio on a quarterly basis. It is based on Third Point’s regulatory  filed on 11/14/2014. Please visit our  to get an idea of his investment philosophy and for the fund’s moves during Q2 2014.The 13F portfolio is very concentrated with the top-three holdings accounting for 36.69% of the entire portfolio. Recent 13F reports show around 40+ long positions. This quarter, Loeb’s US long portfolio increased ~7% from $8.13B to $8.71B. The number of holdings remained steady at 41. Largest five individual stock positions are Dow Chemical, Ally Financial, Actavis plc, Alibaba Group Holdings, and eBay Inc. As per their Q3 2014 investor letter, Third Point’s YTD return was at 6% compared to 8.3% for the S&P 500 Index. Annualized return since inception was at 17.5% (December 1996 inception) compared to 7.5% for S&P 500.New Stakes:Alibaba Group Holdings (BABA): BABA is a large 7.34% of the US long portfolio established this quarter at prices between $87 and $94. The stock currently trades at $111. Alibaba investment thesis is summarized in their Q3 2014 letter: the main idea is that Aliyun (cloud computing), 48% interest in China Smart Logistics, and AliPay are under-appreciated sources of value.Bed Bath & Beyond (BBBY): BBBY is a medium-sized 2.27% of the US long portfolio position established this quarter at prices between $57.38 and $67.33. The stock currently trades outside that range at $72.31.eBay Inc. (EBAY): EBAY is a top-five position at 2.92% of the US long portfolio. The stake was established this quarter at prices between $50 and $56.63 and the stock currently trades at $54.42. eBay saw significant super-investor interest as both Carl Icahn and Seth Klarman added stakes this quarter.Shire plc (SHPG): SHPG is a 2.23% of the US long portfolio position established this quarter at prices between $232 and $263. The stock currently trades below that range at $210. Note: In July AbbVie (ABBV) agreed to acquire SHPG in a $55B transaction but the deal was called off in October.Parker Hannifin Corp. (PH), Energizer Holdings (ENR), Crown Holdings (CCK), and Sunedison Inc. (SUNE): These are small (less than 2% of the portfolio each) positions established this quarter. The 1.69% PH stake was purchased at prices between $110 and $127 and the stock currently trades above that at $132. ENR is a 1.41% position established in the $115 to $125 price-range and it currently trades at $126. CCK is a very small 0.72% stake purchased at prices between $44.52 and $51.47 and the stock currently trades at $48.78. SUNE is a 1.30% position established at prices between $18.88 and $24.05 and the stock currently trades at $22.86. Note: David Einhorn has established a fairly large 5.92% position in the high-teens price-range in SUNE.  The stock experienced a ~35% price-spike last week following the acquisition announcement of First Wind Holdings.Stake Disposals:American International Group (AIG): At the end of 2012, AIG was a huge stake at 12% of the US long portfolio. 18.5M shares were purchased during that year at prices between $23 and $35. The original purchase thesis was focused on two short-term factors: 1) the “forced-selling” dynamic at play due to treasury exit, and 2) increased demand due to index weighting increase as a consequence of the government exit. By Q1 2014, the position was sold down to 7M shares. The bulk of that selling happened in Q1 & Q2 2013 at prices between $35 and $45. Last quarter, the stake was reduced by another ~14% at prices between $49.40 and $55.70 and this quarter the remaining ~4% position was eliminated at prices between $51.98 and $56.33. The stock currently trades at $54.59. Loeb harvested large long-term gains from this position.Ashland Inc. (ASH): ASH was a 1.34% of the US long portfolio position. It was increased last quarter at prices between $94 and $109. The original position was established in Q1 2014 at prices between $89 and $100. This quarter saw an about-turn as the position was eliminated at prices between $99 and $109. The stock currently trades at $113. The activity indicates a bearish bias.Citrix Systems (CTXS): CTXS was a 1.54% of the US long portfolio position established in Q1 2014 at prices between $52.72 and $63. Last quarter, the stake was reduced by ~22% at prices between $54.50 and $65 and this quarter the remaining position was sold at prices between $62.55 and $72.68. The stock currently trades at $65.22.FMC Corporation (FMC): FMC was a 1.36% of the US long portfolio position established last quarter at prices between $70.62 and $78.45 and disposed of this quarter at prices between $57.19 and $71.38. The stock currently trades at $56.50.Rackspace Hosting Inc. (RAX): RAX was a fairly large 3% of the US long portfolio position established last quarter at prices between $26.28 and $38.28 and sold off this quarter at prices between $29.50 and $40. The stock currently trades at $44.92.T-Mobile US (TMUS): TMUS was a 3.31% of the US long portfolio position established in Q4 2013 at $25 per share as a result of the company’s secondary offering. The buy-thesis was that despite regulatory issues, a combination of TMUS with either Sprint (S) or Dish Networks (DISH) was the only real alternative to the duopoly of AT&T (T) and Verizon (VZ).  The original position was increased by ~25% in Q1 2014 at prices between $29.50 and $33.64. Last quarter, the stake was reduced by just over 15% at prices between $28.10 and $34.86 and the position was eliminated this quarter at prices between $28.44 and $33.91. The stock currently trades at $28.52.Hertz Global (HTZ): The 2.96% HTZ position was first purchased in Q4 2013 at prices between $21.35 and $28.50. The position was marginally reduced last quarter. This quarter, the entire remaining stake was eliminated at prices between $25.39 and $31.56. The stock currently trades at $23.77. The quick about-turn indicates a clear bearish bias.Astrazeneca plc (AZN) Calls, Finisar Corporation (FNSR), & Walgreen Company (WAG): These were very small (less than ~1% of the US long portfolio each) positions dropped this quarter. As the position sizes were too small, the activity does not indicate a clear bias.Stake Increases:Actavis plc (ACT): ACT is a top-three position at 7.96% of the US long portfolio. It was established in Q1 2014 at prices between $168 and $227. The stake was increased by ~15% this quarter at prices between $203 and $248. The stock currently trades above that range at $260. The activity indicates a clear bullish bias. The stock has returned just over 50% so far this year and it experienced a price-spike earlier this month after they announced the acquisition of Allergan Inc. (AGN).Amgen Inc. (AMGN): The small 0.65% AMGN stake established last quarter was increased by almost 200% this quarter to a medium-sized 2.14% position at prices between $115 and $144. The stock currently trades at $163. The buy thesis is based around the idea that efficient capital allocation along with splitting the company into a mature business and growth business should unlock tremendous value over the next two years ($249 price-target).Anheuser Busch (BUD): BUD is a 2.54% of the US long portfolio position established in Q1 2014 at prices between $94 and $107. The stake was increased by ~30% last quarter at prices between $105 and $116 and another ~14% this quarter at prices between $107 and $116. The stock currently trades at $115. The activity indicates a bullish bias.Avago Technologies (AVGO): AVGO is a 1.65% of the US long portfolio position that was reduced by half last quarter at prices between $58.53 and $72.07. The position was established in Q1 2014 at prices between $52.49 and $65.31. This quarter, the pattern reversed as the stake was increased by almost two-thirds at prices between $69.38 and $89.52. The stock currently trades at $90.24.Coca Cola Enterprises (CCE): CCE has been in the portfolio since 2012. The original position was substantially increased in Q3 2013 with the purchase of around 2.2M shares at prices between $35 and $41. The stake had seen only minor adjustments since. This quarter saw a ~27% increase at prices between $44.36 and $48.77. The stock currently trades at $43.72 and the stake is at 2.16%.Dow Chemical (DOW): DOW is currently Third Point’s largest individual stock position at a whopping 17.60% of the US long portfolio. The original stake was established in Q4 2013 at prices between $38.30 and $45. Last quarter, the position was increased by just over 180% at prices between $46.95 and $53.15 and this quarter saw an additional one-third increase at prices between $51 and $55. The stock currently trades at $52.84. It is an activist stake and Loeb has said that a “combination of closures, modifications brownfield investments, and divestitures” will be required in Dow’s petrochemical assets to harness the full potential. Over the last one-year, the stock has returned around 33% but the ten-year return is depressing at just ~8%.H&R Block (HRB): HRB is a 1.58% of the US long portfolio position established in Q1 2014 at prices between $28 and $32. It was increased by ~23% last quarter at prices between $27.40 and $33.52 and marginally this quarter. The stock currently trades at $33.24.Sensata Technologies (ST): ST is a 2.56% of the US long portfolio position established in Q1 2014 at prices between $36.78 and $42.90. The stake was increased by ~62% last quarter at prices between $41.59 and $46.78 and another two-thirds this quarter at prices between $45.15 and $49.76. The stock currently trades at $49.65.Anadarko Petroleum (APC) & Calls: The original APC stake established in early 2013 was more than doubled in Q3 & Q4 2013 at prices between $78 and $97. Since then the position has been kept relatively steady. Last two quarters have seen minor increases. The stock currently trades at $93.28.American Airlines Group (AAL) & EQT Corporation (EQT): These two positions were increased substantially this quarter. The 1.12% AAL stake was increased by almost 30% at prices between $35 and $43.70 and the stock currently trades at $43.31. The 1.59% EQT position was increased by 360% at prices between $91 and $107 and the stock currently trades at $95.02. The significant buying indicates a bullish bias toward these businesses.Stake Decreases:Ally Financial (ALLY): ALLY is a huge 11.13% of the US long portfolio position established last quarter as a result of its IPO in April. Loeb started investing in ALLY in 2011 through unsecured debt and preferred securities. This quarter saw a ~8% trimming at prices between $22.60 and $25. He currently holds around 8.75% of the shares outstanding. The stock started trading at around $24 and currently trades at $23.46.Cheniere Energy (LNG): LNG is a very small 0.73% of the US long portfolio position that was reduced by almost two-thirds this quarter at prices between $70 and $85. The stake was established in Q4 2013 at prices between $34 and $45. Last quarter, the position was reduced by 25% at prices between $54 and $72. The stock currently trades at $74.42. Loeb is realizing short-term gains from this position.Enphase Energy (ENPH): ENPH has been in the portfolio since its 2012 IPO - the position had remained untouched ever since. This quarter saw a ~16% reduction at prices between $8.55 and $17.39. Third Point’s investment in the company goes back to January 2007 when they sponsored the company’s entire first round of Series B funding of $4.5M for a 42% stake. The current stake is at ~14% of the company. Loeb revealed that at the time of IPO, the investment already had a ~20% IRR. Since then, the stock has returned ~56%. It has been a volatile stock trading as low as $2 in November 2012. It currently trades at $11.48.Fedex Corporation (FDX): FDX stake was first established in Q3 2013 when 2M shares were purchased at prices between $98 and $117. Last quarter, the position was reduced by half at prices between $131 and $152 and this quarter saw another 25% reduction at prices between $145 and $162. The stock currently trades at $174. Loeb is harvesting short-term gains from this position.Masco Corporation (MAS): MAS is a 2.22% of the US long portfolio position established in Q1 2014 at prices between $20.74 and $23.63. It was increased by ~80% last quarter at prices between $19.54 and $22.89. This quarter saw minor selling. The stock currently trades at $24.07.Williams Companies (WMB): WMB is a small 0.95% of the US long portfolio position first purchased in Q4 2013 at prices between $35 and $39. The stake was increased by ~18% in Q1 2014 at prices between $38 and $43. Last quarter saw an about-turn as the position was reduced by 25% at prices between $40 and $59 and this quarter the pattern continued with a ~60% reduction at prices between $54 and $59.44. The stock currently trades at $55.48.YPF S A (YPF): YPF is a 1.58% of the US long portfolio position. It was established in Q1 2014 at prices between $21.05 and $33.08 and increased by over 135% last quarter at prices between $27.90 and $35.95. This quarter, the stake was reduced by ~40% at prices between $30.97 and $38.91. The stock currently trades at $34.31.CF Industries (CF): The 2.44% CF position was purchased in Q1 2014 at prices between $225 and $265. Last two quarters have seen some selling as the original stake has been reduced by ~21% at prices between $235 and $280. The stock currently trades at $278.Constellation Brands (STZ) & Calls: The 2.10% STZ position was first purchased in 2012 and has only seen marginal activity since. This quarter saw a ~5% increase.Kept Steady:Dollar General (DG): DG was first purchased in 2012 and the position has wavered since. The stake is at 2.81% of the portfolio currently. The position saw a one-third increase last quarter at prices between $53.50 and $62.82 and the stock currently trades at $67.45. Dollar General is currently involved in a hostile takeover of Family Dollar (FDO).Roper Industries (ROP) & Liberty Global (LBTYA) (LBTYK): ROP and LBTYK are medium-sized 2.18% and 2.49% of the US long portfolio positions respectively. The ROP stake was purchased in Q1 2014 at prices between $132 and $142 and the stock currently trades at $158. LBTYK has been in the portfolio since 2011. The stock currently trades at $45.42.Sotheby’s (BID): BID is a 2.73% of the US long portfolio position first purchased in Q1 2013 at prices between $32 and $40. The bulk of the current position was purchased in Q3 2013 at prices between $39 and $51. It is an activist stake and on October 2nd, 2013 Dan Loeb wrote a letter to Sotheby’s chairman asking him to step down. The main point of the letter was that the company’s upper management and board interests are not aligned with shareholders. The stock currently trades at $41.93. For investors attempting to follow Third Point, BID is a very good option to consider for further research.IAC Interactive (IACI): IACI is a 1.51% of the US long portfolio position established last quarter at prices between $62 and $70 and kept steady this quarter. The stock currently trades at $64.99.Intrexon Corporation (XON): XON is a very small 0.62% of the US long portfolio positon left untouched this quarter.The 13F portfolio also shows the following minute (less than 0.5% of the portfolio each) stakes: BioFuel Energy (BIOF), FleetCor Technologies (FLT), Moelis & Company (MC), and Molson Coors Brewing Co. (TAP).The spreadsheet below highlights changes to Loeb’s US stock holdings in Q3 2014:"