"Tracking John Paulson’s Paulson & Company Portfolio – Q3 2017 Update"
"John Paulson’s U.S. long portfolio value decreased from $7.38B to $5.57B this quarter.Paulson & Company's largest three positions are SPDR Gold ETF, Shire plc, and Mylan NV.Paulson reduced Teva Pharmaceuticals & Realogy Holdings while increasing Altaba.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 11/14/2017. Please visit our  to get an idea of his investment philosophy and our  for the fund’s moves during Q2 2017.This quarter, Paulson’s US long portfolio value decreased ~25% from $7.38B to $5.57B. There are 54 13F securities in the portfolio although only 31 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 SPDR Gold ETF, Shire plc, Mylan NV, Allergan plc, and T-Mobile US and they add up to ~40% of the portfolio. The largest holding is SPDR Gold ETF at 9.52% 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:American International Group (AIG): AIG was a ~3.5% 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 in Q4 2016 at prices between $57 and $67. The disposal this quarter was at prices between $58 and $66. The stock currently trades at $60.06.Alexion Pharmaceuticals (ALXN) & Calls: ALXN stake saw a ~250% increase in Q1 2017 at prices between $118 and $145. The position was reduced by ~80% last quarter at prices between $98 and $133 and was disposed this quarter at prices between $121 and $147. It is now at $111.VWR Corp (VWR): VWR was a 1.20% portfolio position purchased at prices between $27 and $34 and eliminated this quarter at ~$33. The stock is currently at $33.24.Note: In May, Avantor agreed to acquire VWR for $33.25 per share cash.Loxo Encology (LOXO) and William Lyon Homes (WLH): These are very small (less than ~1% of the portfolio each) stakes disposed this quarter.New Stakes:None.Stake Decreases:Shire PLC ADR (SHPG): SHPG is currently the second-largest position at 8.67% 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. Last four quarters saw another ~33% reduction at prices between $145 and $195. The stock currently trades at $147.Mylan Inc. (MYL): MYL is a top-three position at 8.29% 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 ~50% increase in Q2 2015 at prices between $58 and $76. Last three quarters have seen a one-third selling at prices between $29.50 and $45.50. The stock trades currently at $37.59.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. Last four quarters have seen a combined ~45% selling at prices between $190 and $255. The stock is currently at $175 and the stake is at ~8% of the portfolio.T-Mobile US (TMUS): The 5.76% portfolio stake in TMUS was purchased in Q1 2017 at prices between $56.60 and $65 and increased by ~46% last quarter at prices between $60 and $68. This quarter saw a ~14% trimming. The stock is at $60.02.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 well below those ranges at $14.69 and the stake is at 5.36% of the portfolio. There was a ~5% trimming this quarter.Note: Paulson controls ~6% of Valeant Pharmaceuticals.Time Warner Inc. (TWX: TWX is a ~4.5% of the portfolio merger-arbitrage stake purchased in Q4 2016. 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 $88.72. There was a ~20% selling this quarter.Mallinckrodt PLC (MNK): MNK is a 4.45% 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 pattern reverse: ~31% increase at prices between $53 and $77. Last five quarters had seen a combined ~23% reduction at prices between $40 and $81. The stock currently trades at $22.38. There was marginal trimming this quarter.Note 1: Paulson controls ~7% 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.Synergy Pharmaceuticals (SGYP): The 1.25% 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 $1.95. This quarter saw marginal trimming.Note: Regulatory filings since the quarter ended show them owning 15.3M shares (6.2% of the business) – 8.75M shares sold at $2.82.Office Depot (ODP): ODP is a very small 0.81% stake. It was doubled in Q2 2016 at prices between $3 and $8. The stock is now at $3.28. Q1 2017 saw a minor ~7% trimming and that was followed with a ~12% reduction last quarter. There was another ~20% selling this quarter at prices between $3.95 and $6.20.Teva Pharmaceuticals (TEVA): TEVA was a very small stake established in Q2 2015. 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 in Q1 2017 at prices between $32 and $38. There was another ~40% reduction last quarter at prices between $27.50 and $33 and that was followed with another two-thirds selling this quarter at prices between $15.50 and $33.50. The stock is now at $13.84 and the stake is at ~0.77%.Realogy Holdings (RLGY): RLGY is a 0.59% 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 $26.50. There was a ~16% trimming last quarter at prices between $28 and $32.50 and that was followed with a 75% reduction this quarter at prices between $32 and $35.NXP Semiconductors (NXPI): NXPI stake saw a ~200% increase in Q1 2017 to a 1.56% portfolio position at prices between $96 and $104. There was a ~6% further increase last quarter. The position was almost sold out this quarter at prices between $109 and $113. It is now at ~$116.Note: NXPI is a merger-arbitrage stake. It is getting acquired by Qualcomm (QCOM) for $110 per share cash.Oasis Petroleum (OAS): The very small 0.80% OAS stake saw marginal trimming this quarter.Stake Increases:Dish Network (DISH): DISH is a 4.55% portfolio position established in Q1 2017 at prices between $58 and $64 and increased by ~16% last quarter at prices between $58 and $66. This quarter saw a similar increase at prices between $52 and $66. The stock is currently trading below those ranges at $50.66.Altaba Inc. (AABA) previously Yahoo, and Horizon Pharmaceuticals (HZNP): These two positions purchased last quarter saw increases this quarter. The 4.52% AABA stake was established at prices between $46 and $56 and increased by ~42% this quarter at prices between $54.50 and $67.50. It is now well above those ranges at $71.02. The small 1.27% HZNP position purchase was at prices between $9.65 and $15.75. It was increased by ~13% this quarter. The stock is now at $13.65.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 ~$123. The remaining stake is still the largest at ~10% of the portfolio.Caesars Acquisition and Caesars Entertainment (CZR): Paulson has significant ~10% ownership stakes in each of Caesars Acquisition and Caesars Entertainment. Last month, Caesars Entertainment combined with Caesars Acquisition in a merger. The terms called for Caesars Acquisition shareholders to receive 1.625 shares of CZR for each share held.Vistra Energy (VST) previously TCEH: VST is a ~4% of the portfolio position established last quarter. It exited bankruptcy last December and started trading in May at ~$15 per share. The stock is now at $19.15.AngloGold Ashanti (AU): AU is a ~2% 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 is currently at $9.99.Note: Paulson controls ~3% of AngloGold Ashanti.Novagold (NG): NG is a small 1.63% 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 in Q4 2016. The stock is currently at $3.89.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 $7.54 and the stake is at ~1% of the portfolio. There was a ~9% trimming last quarter.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 $17.17. There was ~6% trimming last quarter at ~$20.Note: Paulson controls ~12% of International Seaways.Extended Stay America (STAY): STAY is now a very small 0.65% 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 $16.46 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 in Q4 2016 at prices between $13 and $17 and that was followed with a ~30% selling in Q1 2017 at $17.81. The position was reduced by ~90% last quarter at prices between $15.76 and $19.80. Paulson harvested long-term gains.Note: 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.Agnico Eagle Mines (AEM), Bank of America (BAC) warrants, Brookdale Senior Living (BKD), International Tower Hill Mines (THM), Randgold Resources (GOLD), and TIM Participacoes (TSU): These are small (less than ~2% of the portfolio each) stakes kept steady this quarter.Note: Paulson has a ~34% ownership stake in International Tower Hill Mines.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), Synthesis Energy Systems (SYMX), and Trilogy Metals (TMQ).The spreadsheet below highlights changes to Paulson’s US stock holdings in Q3 2017:Regulatory Filings thru 8/18/2017: Form 4 – 8/15/2017 – OSG – 117K disposal at $2.25, 10.25M shares remains, 4/A – 7/20 – minor disposal 2k, 7/6 – Form 4& 13D/A – 600K disposed at 2.67, 10.96M shares remain, 14.7% of business. Form 4 – 6/1/2017 – 693K acquired at 0.01, minor disposal, 11M remain. Form 4 – 8/9/2017 – SGYP – 26K disposal at $3.77 – 24.06M shares remains, also 1.25M shares in derivatives. 13D – 8/9/2017 - VRX – 20.8M shares – 6% of business - ~1M shares sold @ $14.66. 6/20 – 13D – 21.8M shares - 6.3% of business. Form 4 – 7/18/2017 – TMQ – 27K disposed at $0.57 – 11.57M shares remain. Form 4 – 6/30/2017 – INSW – 225K disposed at ~20 – 3.46M shares remain. 13D/A – 6/7/2017 – ESH & STAY – 1.8M shares – less than 1% of business."