"Tracking John Paulson’s Paulson & Company Portfolio – Q1 2017 Update"
"John Paulson’s U.S. long portfolio decreased from $7.93B to $7.53B this quarter.Paulson & Company's largest three positions are and Shire plc, Allergan plc, and Mylan NV.Paulson added T-Mobile & Dish Network while reducing Allergan plc, Mylan NV, Teva Pharmaceuticals, and Extended Stay America.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 05/15/2017. Please visit our  to get an idea of his investment philosophy and our  for the fund’s moves during Q4 2016.This quarter, Paulson’s US long portfolio decreased ~5% from $7.93B to $7.53B. There are 100 13F securities in the portfolio although only 32 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 plc, Mylan NV, SPDR Gold ETF, and Teva Pharmaceuticals and they add up to ~40% of the portfolio. The largest holding is Shire plc at 9.55% 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:Harman International (HAR) and B/E Aerospace (BEAV): These two were merger-arbitrage positions established last quarter. In November last year, Samsung agreed to acquire Harman International in a $112 per share all-cash deal and the deal closed in March this year. Rockwell Collins (COL) agreed to acquire B/E Aerospace in a $62 per share cash-and-stock deal ($34.50 cash) in October last year and that deal closed last month.Note: BEAV had a previous roundtrip: BEAV is a ~0.5% of the portfolio stake purchased in Q1 2016 at prices between $38 and $47 and reduced by two-thirds the following quarter at prices between $42.50 and $50. The stake was disposed in Q3 2016 at prices between $45 and $52.Hewlett Packard Enterprise (HPE): HPE was a ~1% portfolio position purchased in Q3 2016 at prices between $12.50 and $17.50. Last quarter saw a ~50% selling at prices between $15.50 and $19.25 and the disposal this quarter was at prices between $16.50 and $19. The stock is now at $18.53.Note: The prices quoted above are adjusted for the spin-merger with Computer Sciences Corporation. HPE holders received 0.086 shares of DXC Technology (DXC) for each share held.Dell Technologies (DVMT) and VMWare (VMW): DVMT was a very small ~0.75% of the portfolio stake established in Q3 2016. The VMWare (VMW) tracking stock came about as a result of Dell’s deal for EMC Corporation. Paulson had ~10.5M shares of EMC for which he received ~1M shares of DVMT in the ration 1:0.111 along with $24.05 per share in cash. The elimination this quarter happened at prices between $54.50 and $65. A ~1% position in VMW was also disposed of this quarter.New Stakes:T-Mobile US (TMUS) & Dish Network (DISH): These are fairly large ~3% portfolio stakes established this quarter. The 3.55% portfolio stake in TMUS was purchased at prices between $56.60 and $65 and the stock is now just above that range at $66.37. DISH is a 2.91% portfolio position established at prices between $58 and $64 and the stock currently goes for $63.53.Note: A merger rumor involving T-Mobile & Dish Network got some press earlier this year. Sprint (S) is also in the mix.Brookdale Senior Living (BKD): BKD is a very small 0.90% portfolio position purchased this quarter at prices between $11.90 and $16.30 and the stock is now at $14.02.Stake Decreases:Shire PLC ADR (SHPG): SHPG is currently the largest position at 9.55% of the US long portfolio. It was 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. The following quarter saw a whopping ~170% increase at prices between $232 and $263. In Q2 2015, the pattern reversed: ~15% reduction at prices between $227 and $260. Q2 & Q3 2016 also saw a combined ~40% reduction at prices between $165 and $207. The stock currently trades at $189. Last two quarters have seen a combined ~14% trimming at prices between $162 and $207. Paulson is realizing long-term gains.Allergan plc (AGN): AGN was a minutely small 0.29% of the US long 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: ~23% reduction at prices between $253 and $323. Q2 2016 saw another ~26% selling at prices between $202 and $278. There was a ~8% trimming last quarter and that was followed with a ~22% selling this quarter at prices between $211 and $250. The stock is currently at $219 and the stake is still Paulson’s second-largest at 9.33% of the portfolio.Mylan Inc. (MYL): MYL is a top-three position at 9.04% of the portfolio. The original stake was purchased in Q1 2010 at prices between $17 and $23. Q1 2013 saw a 25% reduction at prices between $27.50 and $31 and the following quarter saw another one-third reduction at prices between $29 and $32. Q4 2014 saw an about-turn: ~20% increase at prices between $45 and $59 and that was followed with a ~47% increase in Q2 2015 at prices between $58 and $76. The stock trades currently at $37.94. There was a ~20% selling this quarter at prices between $35.50 and $45.50.Teva Pharmaceuticals (TEVA): TEVA was a very small 0.55% of the US long portfolio stake established in Q2 2015 at prices between $59 and $67. It was increased to a fairly large 5.28% position the following quarter at prices between $55 and $72. Q2 2016 saw a ~19% reduction at prices between $48.50 and $57 and that was followed with a ~30% selling this quarter at prices between $32 and $38. The stock is now at $29.88.Mallinckrodt PLC (MNK): MNK is a 4.44% of the US long portfolio position established in Q3 2013 at prices between $42 and $47. Q2 & Q3 2014 saw a combined 55% increase at prices between $60 and $90. There was some selling in H1 2015: ~28% reduction at prices between $94 and $130. Q4 2015 saw the patter reverse: ~31% increase at prices between $53 and $77. The stock currently trades at $41.05. Last four quarters have seen a combined ~16% reduction at prices between $43 and $81.Note 1: Paulson controls ~7.5% of the business.Note 2: MNK, a July 2013 spinoff from Covidien plc started trading at around $42. Covidien plc in turn was acquired by Medtronic (MDT) in January 2015.Extended Stay America (STAY): STAY is a 4.23% of the US long portfolio position. The stake came about as a result of the firm’s IPO in November 2013. STAY currently trades at $17.81 compared to the IPO offering price of $20.  Q4 2015 had seen a ~11% trimming at prices between $16 and $19 and that was followed with another ~12% reduction in Q3 2016 at ~$14. There was a ~25% reduction last quarter at prices between $13 and $17 and that was followed with a ~30% selling this quarter at $17.81. Paulson is harvesting long-term gains.Note 1: Regulatory filings since the quarter ended show Paulson owning 9.84M shares of STAY. This is compared to 20.09M shares in the 13F. They sold ~10M shares at $17.23. Paulson still controls 5.1% of the business.Note 2: 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. At the time of the 11/2013 IPO, the firms already made more than three times their investment.American International Group (AIG): AIG is a ~3.8% of the US long portfolio stake established in Q1 2015 at prices between $49 and $56. Q4 2015 saw a ~20% reduction at prices between $57 and $64 and the following quarter saw another ~20% reduction at prices between $49 and $58. There was a ~50% further selling last quarter at prices between $57 and $67 and that was followed with a minor ~5% trimming this quarter. The stock currently trades at $61.20.Akorn Inc. (AKRX): The 2.68% AKRX position was first purchased in Q4 2015 at prices between $22 and $37.50 and increased by ~225% the following quarter at prices between $18.50 and $38.50. The stock is now at $33.21. Last four quarters have seen minor trimming.Note: Paulson controls ~6.7% of Akorn Inc.Novagold (NG): NG is a small 1.43% 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 last quarter. The stock is currently at $4.21. There was marginal trimming this quarter.Note: Paulson has a high cost-basis on NG and controls ~7% of the business.Endo International plc (ENDP): A very small ENDP stake was increased by almost 200% in Q1 2016 at prices between $28 and $61. Q2 & Q3 2016 had seen a combined ~18% reduction at prices between $17 and $43. The stock is now at $11.88 and the stake is at 1.16% of the portfolio. There was a marginal further reduction in the last two quarters.International Seaways (INSW): INSW is a spinoff from Overseas Shipholding Group (OSG) that started regular-way trading in December last year at ~$15 per share. It is now at $20.92. There was marginal trimming this quarter.Note: Paulson controls ~12.5% of International Seaways.Office Depot (ODP): ODP is a very small 0.88% stake. It was doubled in Q2 2016 at prices between $3 and $8. The stock is now at $5.03. This quarter saw a minor ~7% trimming.Note: In May 2016, a merger deal with Staples (SPLS) was scuttled by a federal judge.Agnico Eagle Mines (AEM), Bank of America (BAC) warrants, Oasis Petroleum (OAS), Randgold Resources (GOLD), and TIM Participacoes (TSU): These are very small (less than ~1% of the portfolio each) stakes were further reduced this quarter.Stake Increases:Time Warner Inc. (TWX: The ~4% of portfolio merger-arbitrage stake purchased last quarter saw a minor ~5% increase this quarter. AT&T (T) reached a deal last October to acquire Time Warner in a $107.50 half-cash half-stock deal. The stock currently trades at $97.63.NXP Semiconductors (NXPI), Mead Johnson (MJN), and Alexion Pharmaceuticals (ALXN) & Calls: These three were minutely small (less than 0.5% of the portfolio each) positions as of last quarter. All three saw substantial increases this quarter. NXPI stake saw a ~200% increase to a 1.56% portfolio position at prices between $96 and $104 and it is now at $108. MJN stake was increased by roughly 37-times to a 1.40% portfolio position at prices between $69.50 and $89 and the stock currently goes for $89. The very small 0.86% ALXN stake also saw a ~250% increase at prices between $118 and $145 and it is now just below that range at $114.Note: NXPI & MJN are merger-arbitrage stakes. NXPI is getting acquired by Qualcomm (QCOM) for $110 per share and MJN by Reckitt Benckiser (RBGLY) for $90 per share (both all cash).Kept Steady:SPDR Gold Trust (GLD): GLD was Paulson’s largest position by far at ~19% of the US long 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 ~$119. Last quarter also saw a ~9% trimming. The remaining stake is still a top five stake at ~7% of the portfolio.Valeant Pharmaceuticals (VRX): VRX 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 another ~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 $13.52 and the stake is at ~2.84% of the portfolio. There was marginal trimming in Q3 2016 and a minor increase last quarter.Note: Paulson controls 5.6% of Valeant Pharmaceuticals.Caesars Acquisition (CACQ) and Caesars Entertainment (CZR): Paulson has significant ~10% ownership stakes in each of CACQ and CZR. Q3 2016 had seen minor trimming.Realogy Holdings (RLGY): RLGY is a 1.89% of the US long portfolio position that was reduced by two-thirds over the six quarters thru Q2 2016 at prices between $28 and $49. The original investment was made prior to the October 2012 IPO. The stock currently trades at $29.94.Note: Paulson controls ~3% of Realogy Holdings.AngloGold Ashanti (AU): AU is a 1.83% 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 further one-third reduction at prices between $7 and $14. Q2 2016 saw another ~20% reduction at prices between $13 and $18. The stock currently trades at $11.59.Note: Paulson controls ~3% of AngloGold Ashanti.Synergy Pharmaceuticals (SGYP): The 1.49% SGYP position saw a ~150% increase in Q2 2016 at prices between $2.50 and $4. There was a ~13% reduction in the following quarter at ~$5.60 and the stock currently trades at $3.92. There was a marginal reduction last quarter.Note: Paulson controls 13.4% of the business.Bank of America (BAC) warrants and William Lyon Homes (WLH): These are very small (less than ~1% of the portfolio each) stakes kept steady this quarter.Although the relative position sizes are minute, the following 13F stakes are significant as Paulson has sizable ownership: Cobalt International Energy (CIE), Enzymotec Ltd. (ENZY), International Tower Hill Mines (THM), and Trilogy Metals (TMQ).The spreadsheet below highlights changes to Paulson’s US stock holdings in Q1 2017:Regulatory Filings thru 2/20/2017: 13G/As on 2/14/2017: AKRX - 8.7M shares - ~7%. CIE - 31.1M shares - 7.5%. VNDA - 0. VRX - 19.4M shares - 5.6%. MNK - 8M shares - 7.5%. TMQ - 14.4M shares - 13.3%. CACQ - 13.1M shares - 9.5%. NG - 22.3M shares - ~7%. LIVN - 310K - 0.63%. POST - 0. AU - 12.8M shares - 3.13%. CZR - 14.4M shares - 9.8%. ENZY - 4.2M shares - 18.5%. SGYP - 24.1M shares - 13.4%. 12/30/2016 13D - THM - 55.5M shares - 34.2%. 12/20/2016 - 13D - STAY & ESH Hospitality (2) - 28.6M shares - 14.6%. 12/12/2016 - 13D - INSW - 3.7M shares - 12.6%."