13F Watch: Rising Profile for Activist Investors
Activist investors have raised their profiles significantly in recent years. According to Activist Insight, there were 237 activist campaigns launched in 2013 (71% against companies in the United States), up from less than 30 in 2000. And while activists used to fly mostly under the radar, many have now embraced new media platforms as a way to make their cases heard. Carl Icahn has been proven himself to be especially adept at exploiting new messaging channels, frequently taking to Twitter, and creating a website to promote his holdings and advance good governance practices.
The prominent investors whose portfolios we highlight below don’t all fit the activist mold, but a common bond is that they are not afraid to take significant positions — their top five long positions, on average, accounted for well over half of their portfolios’ value — and their moves are closely watched.
Here’s a quick recap of the notable changes made during the fourth quarter of 2013 by some widely followed portfolio managers:
- Bill Ackman (Pershing Square Capital): Ackman added to his positions in Burger King Worldwide (BKW) and Air Products & Chemicals (APD), and trimmed positions in Canadian Pacific Railway (CP), General Growth Properties (GGP), and Procter & Gamble (PG). At the end of 2013, Ackman’s top holdings remained Canadian Pacific Railway (CP), Air Products & Chemicals (APD), Beam (BEAM), which has agreed to be acquired by Suntory Holdings, Burger King Worldwide (BKW), and General Growth Properties (GGP).
- Bruce Berkowitz (Fairholme Funds): Berkowitz reported new stakes in Fannie Mae (FNMA) and Freddie Mac (FMCC), added to existing positions in Bank of America (BAC), Chesapeake Energy (CHK), and Sears Holdings (SHLD), and reduced stakes in American International Group (AIG), St Joe (JOE), Leucadia National (LUK), Berkshire Hathaway (BRK/B). At the end of the year, American International Group (AIG), Bank of America (BAC), Sears Holdings (SHLD), Leucadia National (LUK), and St Joe (JOE) remained Fairholme’s top holdings.
- Warren Buffett (Berkshire Hathaway): Berkshire disclosed new positions in Goldman Sachs (GS), and Liberty Global (LBTYA), and added to stakes in Wells Fargo (WFC), Exxon Mobil (XOM), DaVita HealthCare Partners (DVA), USG (USG), US Bancorp (USB), General Electric (GE), and Wal-Mart Stores (WMT). Buffett also sold out of his position in DISH Network (DISH) and GlaxoSmithKline (GSK), and reduced stakes in Suncor Energy (SU), ConocoPhillips (COP), Liberty Media (LMCA), Stars (STRZA), and Moody’s (MCO). Top holdings at the end of 2013 remained Wells Fargo (WFC), Coca-Cola (KO), International Business Machines (IBM), American Express (AXP), and Procter & Gamble (PG).
- David Einhorn (Greenlight Capital): Einhorn’s largest new positions included Anadarko Petroleum (APC), EMC (EMC), Take-Two Interactive Software (TTWO), McDermott International (MDR), and BP (BP). He also added to positions in Micron Technology (MU), Tempur Sealy International (TPX), ING US (VOYA), Amdocs Limited (DOX), and IAC/InterActiveCorp (IACI). NVR (NVR) was sold from the portfolio, while positions in NCR (NCR), Einstein Noah Restaurant Group (BAGL), Aetna (AET), and Delphi Automotive (DLPH) were reduced. Top holdings at the end of the year included Apple (AAPL), Micron Technology (MU), General Motors (GM), Marvell Technology Group (MRVL), and Cigna (CI).
- Jeremy Grantham (GMO): GMO’s largest new positions included ICICI Bank (IBN), XRS (XRS), LSI (LSI), KKR Financial (KFN), and LinnCo (LNCO). Notable sells included Vodafone Group (VOD), Cummins (CMI), Leap Wireless International (LEAP), Elan (ELN), and Grupo Televisa (TV). At the end of the year, GMO’s top holdings included Google (GOOG), Microsoft (MSFT), Oracle (ORCL), Johnson & Johnson (JNJ), and Chevron (CVX).
- Carl Icahn (Icahn Associates): Icahn established a new position in Hologic (HOLX), and added to his stakes in Talisman Energy (TLM), Apple (AAPL), and Nuance Communications (NUAN). Take-Two Interactive Software (TTWO) was sold out of the portfolio, and his position in Netflix (NFLX) was reduced. At the end of the year, top holdings included CVR Energy (CVI), Apple (AAPL), Federal-Mogul (FDML), Forest Laboratories (FRX), which has since agreed to be acquired by Actavis (ACT), and Chesapeake Energy (CHK).
- Seth Klarman (Baupost Group): Klarman added new positions in Fidelity National Financial (FNF), Kindred Biosciences (KIN), and Alon USA Partners (ALDW), and added to stakes in Idenix Pharmaceuticals (IDIX), PBF Energy (PBF), BP (BP), Via Sat (VSAT), and Theravance (THRX). Positions were eliminated in Oracle (ORCL), Central Pacific Financial (CPF), Ituran Location and Control (ITRN), and reduced in Rovi (ROVI), Enzon Pharmaceuticals (ENZN), and Micron Technology (MU). Top holdings at the end of the year included Micron Technology (MU), Theravance (THRX), Via Sat (VSAT), BP PLC (BP), and Idenix Pharmaceuticals (IDIX).
- Dan Loeb (Third Point): Loeb’s largest new positions established during the quarter included Dow Chemical (DOW), T-Mobile US (TMUS), Hertz Global Holdings (HTZ), Williams Companies (WMB), and Cheniere Energy (LNG). Notable sells from the portfolio included CF Industries Holdings (CF), Thermo Fisher Scientific (TMO), Tibco Software (TIBX), Twenty-First Century Fox (FOXA), and Disney (DIS). At the end of the year, top holdings included American International Group (AIG), FedEx (FDX), Dow Chemical (DOW), Sothebys (BID), and Yahoo! (YHOO).
- Howard Marks (Oaktree Capital): Marks largest new positions included Surgical Care Affiliates (SCAI), Contango Oil & Gas (MCF), Tata Consultancy Services (TCS), Baidu (BIDU), and Trina Solar (TSL). Notable deletions included Cumulus Media (CMLS), Orbotech (ORBK), Baltic Trading (BALT), Goldcorp (GG), and HDFC Bank (HDB). Top holdings at the end of the year included Masonite International (DOOR), First BanCorp/Puerto Rico (FBP), EXCO Resources (XCO), Dynegy (DYN), and Delphi Automotive (DLPH).
- Nelson Peltz (Trian Partners): Peltz initiated a position in Allegion (ALLE), added to positions in Mondelez (MDLZ), PepsiCO (PEP), and (TIF), and reduced stakes in (GNC) and Ingersoll-Rand (IR). Top holdings at the end of 2013 included Mondelez (MDLZ), PepsiCO (PEP), Ingersoll-Rand (IR), Wendy’s (WEN), and Legg Mason (LM).
- Barry Rosenstein (Jana Partners): Rosenstein’s largest new positions during the fourth quarter included Cameron International (CAM), Juniper Networks (JNPR), Allegion (ALLE), Sansiri Public Company Limited (SIRI), and Mondelez (MDLZ). Notable sells from the portfolio included Agrium (AGU), Verisign (VRSN), Copart (CPRT), News Corp (NWSA), and Hologic (HOLX). At the end of 2013, top holdings included Ashland (ASH), Oil States International (OIS), Equinix (EQIX), Walgreen (WAG), and QEP Resources (QEP).
- David Tepper (Appaloosa Management): Tepper’s largest new positions included American Airlines Group (AAL), Halliburton (HAL), Eastman Chemical (EMN), Baidu (BIDU), and CBS (CBS). Notable sells from the portfolio included Hertz Global Holdings (HTZ), Bank of America (BAC), SanDisk (SNDK), Lincoln National (LNC), and Ashland (ASH). At the end of the year, top holdings included Citigroup (C), Goodyear Tire & Rubber (GT), Google (GOOG), HCA Holdings (HCA), and United Continental Holdings (UAL).
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