In this article, we discuss 10 new stock picks of billionaire Dan Loeb. If you want to skip our detailed analysis of these stocks, go directly to 5 New Stock Picks of Billionaire Dan Loeb.
Dan Loeb is an American activist investor and hedge fund manager, who founded Third Point in 1995, which is a New York-based hedge fund focused on event-driven value investing. As per the 13F filings from Q3 2021, Third Point’s portfolio is worth $18.3 billion. With a top ten holdings concentration of 56.87%, Dan Loeb’s Third Point invests primarily in the utilities and telecommunications, information technology, healthcare, finance, consumer discretionary, and communications sectors.
Dan Loeb, a Columbia University graduate, has a distinct approach to investing. He seeks out distressed companies, stripping them of inefficient management practices, and returning them to a profitable position for shareholders. Dan Loeb, via Third Point, invests in public equity, fixed income, and ADR markets worldwide.
The hedge fund bought 12 new stocks in Q3 2021, made additional purchases in 18 equities, sold out of 25 securities, and reduced stakes in 12 companies. The top buys of Dan Loeb’s Third Point in the third quarter included Amazon.com, Inc. (NASDAQ:AMZN), SentinelOne, Inc. (NYSE:S), and Activision Blizzard, Inc. (NASDAQ:ATVI). Whereas, the fund reduced holdings in Uber Technologies, Inc. (NYSE:UBER), Intel Corporation (NASDAQ:INTC), and JD.com, Inc. (NASDAQ:JD).
The most notable holdings in the third quarter portfolio of billionaire Dan Loeb include The Walt Disney Company (NYSE:DIS), Meta Platforms, Inc. (NASDAQ:FB), and Microsoft Corporation (NASDAQ:MSFT).
Dan Loeb of Third Point
Our Methodology
We used the Q3 2021 portfolio of billionaire Dan Loeb’s Third Point for this analysis, selecting the 10 newest additions to the hedge fund’s 13F securities. The stocks are ranked according to the stake value of Third Point in each holding.
New Stock Picks of Billionaire Dan Loeb
10. Blue Whale Acquisition Corp I (NASDAQ:BWC)
Third Point’s Stake Value: $19,922,000
Percentage of Third Point’s 13F Portfolio: 0.10%
Number of Hedge Fund Holders: N/A
Blue Whale Acquisition Corp I (NASDAQ:BWC) is a blank check company that is focused on acquiring top-notch growth companies in the media, entertainment, and technology sectors. Blue Whale Acquisition Corp I (NASDAQ:BWC) is affiliated with Mubadala Capital, the asset management subsidiary of Mubadala Investment Company PJSC, a prominent global investor based in Abu Dhabi, with over $243 billion in assets under management. Blue Whale Acquisition Corp I (NASDAQ:BWC) priced its initial public offering of 20 million units at $10.00 per unit on August 4, 2021.
Dan Loeb’s Third Point acquired a stake in Blue Whale Acquisition Corp I (NASDAQ:BWC) in the third quarter of 2021, buying 2 million shares worth $19.9 million, representing 0.10% of the fund’s total Q3 securities.
9. Sema4 Holdings Corp. (NASDAQ:SMFR)
Third Point’s Stake Value: $21,214,000
Percentage of Third Point’s 13F Portfolio: 0.11%
Number of Hedge Fund Holders: 34
Sema4 Holdings Corp. (NASDAQ:SMFR) is headquartered in Connecticut and functions as a health information company, assisting with improving diagnosis, treatment, and prevention of disease through data analysis and an intelligence platform driven by artificial intelligence. Billionaire Dan Loeb purchased a $21.2 million stake in Sema4 Holdings Corp. (NASDAQ:SMFR) in Q3 2021, which represents 0.11% of his total 13F portfolio for the period.
On January 18, Sema4 Holdings Corp. (NASDAQ:SMFR) agreed to acquire OPKO Health, Inc. (NASDAQ:OPK)’s wholly-owned subsidiary, GeneDx. Sema4 Holdings Corp. (NASDAQ:SMFR) will make an upfront cash payment of $150 million plus 80 million in Sema4 Holdings Corp. (NASDAQ:SMFR) shares. The deal also includes additional $150 million revenue-based milestone payments over the next two years, payable in cash or Sema4 Holdings Corp. (NASDAQ:SMFR) shares. The total aggregate consideration, including potential milestones, is approximately $623 million.
Sema4 Holdings Corp. (NASDAQ:SMFR) shares on January 10 jumped 9% after the company announced that it expects Q4 total revenues of $50 million-$52 million, as compared to its prior guidance of $46.6 million-$49.6 million.
Goldman Sachs analyst Matthew Sykes initiated coverage of Sema4 Holdings Corp. (NASDAQ:SMFR) with a Buy rating and a $12 price target on November 19. The analyst said that the company is a “top player” in germline and reproductive testing, and is expanding into the “large” oncology market.
According to Insider Monkey’s Q3 data, 34 hedge funds were long Sema4 Holdings Corp. (NASDAQ:SMFR), with stakes equaling $483.7 million. Deerfield Management is the largest stakeholder of the company, with 13.8 million shares worth $105.1 million.
In addition to The Walt Disney Company (NYSE:DIS), Meta Platforms, Inc. (NASDAQ:FB), and Microsoft Corporation (NASDAQ:MSFT), Sema4 Holdings Corp. (NASDAQ:SMFR) is one of the stocks to look out for according to billionaire Dan Loeb.
8. Archer Aviation Inc. (NYSE:ACHR)
Third Point’s Stake Value: $22,200,000
Percentage of Third Point’s 13F Portfolio: 0.12%
Number of Hedge Fund Holders: 28
Archer Aviation Inc. (NYSE:ACHR) is a California-based urban air mobility company, which manufactures and operates electric vertical takeoff and landing aircrafts to carry passengers. Dan Loeb’s Third Point purchased 2.50 million shares of Archer Aviation Inc. (NYSE:ACHR) in the third quarter of 2021, worth $22.20 million, representing 0.12% of his total Q3 securities.
On January 18, Barclays analyst David Zazula lowered the price target on Archer Aviation Inc. (NYSE:ACHR) to $5.50 from $10 and kept an Equal Weight rating on the shares. The analyst sees Archer Aviation Inc. (NYSE:ACHR)’s first flight hover accomplishment as “tangible evidence of management meeting aggressive plan expectations”. However, despite the company’s “impressive hires and positive momentum” for the business, he reduced the price target to match increased dilution risk “as equity markets appear less accommodating.”
According to the third quarter database of Insider Monkey, 28 hedge funds were long Archer Aviation Inc. (NYSE:ACHR), with stakes totaling $173.5 million. Highbridge Capital Management held the leading stake in Archer Aviation Inc. (NYSE:ACHR), with 2.2 million shares worth $21.6 million.
7. Rocket Lab USA, Inc. (NASDAQ:RKLB)
Third Point’s Stake Value: $24,195,000
Percentage of Third Point’s 13F Portfolio: 0.13%
Number of Hedge Fund Holders: 26
Headquartered in California, Rocket Lab USA, Inc. (NASDAQ:RKLB) is an aerospace company, focused on developing rocket launch and control systems for the space and defense industries, catering to customers in the commercial, civil, defense, and academic sectors.
In the third quarter of 2021, billionaire Dan Loeb purchased 1.50 million shares of Rocket Lab USA, Inc. (NASDAQ:RKLB), worth $24.1 million, representing 0.13% of his Q3 portfolio.
Rocket Lab USA, Inc. (NASDAQ:RKLB) on February 2 announced it will open a new space systems complex in Littleton, Colorado, to support growing customer demand for flight software, mission simulation, guidance, navigation, and control services.
On January 28, Deutsche Bank analyst Edison Yu said that Rocket Lab USA, Inc. (NASDAQ:RKLB) remains his top pick for 2022 in the space sector. Ahead of the company’s Q4 report, the analyst increased 2022 forecasts to factor in the three recent acquisitions and updated launch schedule. He maintains a Buy rating on Rocket Lab USA, Inc. (NASDAQ:RKLB) with an $18 price target, saying it is the “most promising rocket launch company after SpaceX.”
In Q3 2021, 26 hedge funds were bullish on Rocket Lab USA, Inc. (NASDAQ:RKLB), with stakes totaling approximately $589 million. Corsair Capital Management was one of the prominent stakeholders of Rocket Lab USA, Inc. (NASDAQ:RKLB) as of the close of the third quarter, with 32,696 shares worth $319,000.
Rocket Lab USA, Inc. (NASDAQ:RKLB) is gaining the attention of smart investors, just like The Walt Disney Company (NYSE:DIS), Meta Platforms, Inc. (NASDAQ:FB), and Microsoft Corporation (NASDAQ:MSFT).
6. Membership Collective Group Inc. (NYSE:MCG)
Third Point’s Stake Value: $46,650,000
Percentage of Third Point’s 13F Portfolio: 0.25%
Number of Hedge Fund Holders: 9
Membership Collective Group Inc. (NYSE:MCG) is a London-based company operating a global membership platform of physical and digital networks that connects members worldwide. The community at Membership Collective Group Inc. (NYSE:MCG) uses the MCG platform to work, socialize, connect, and be creative.
In Q3 2021, Membership Collective Group Inc. (NYSE:MCG) was a new arrival in Dan Loeb’s portfolio, with the billionaire buying 3.75 million shares of the company, worth $46.65 million. The stock represents 0.25% of Third Point’s Q3 investments.
Goldman Sachs analyst Stephen Grambling on December 14 downgraded Membership Collective Group Inc. (NYSE:MCG) to Sell from Neutral with a price target of $13, down from $14, telling investors that he sees the company being on a “more prolonged recovery” path compared to the rest of his coverage, given COVID-19 cases increasing in Europe and governments taking more restrictive measures than in North America.
According to the third quarter database of Insider Monkey, 9 hedge funds were bullish on Membership Collective Group Inc. (NYSE:MCG), with stakes totaling $167.5 million. Pelham Capital is the biggest stakeholder of the company, holding 4.5 million shares worth $57.1 million.
Here is what Baron Funds has to say about Membership Collective Group Inc. (NYSE:MCG) in its Q3 2021 investor letter:
“During the quarter, we purchased Membership Collective Group Inc. (“MCG”), a global membership platform centered around club houses in metropolitan areas. Its trademark Soho House brand has 30 Houses with more than 111,000 members globally, 94% average annual retention, and a wait list of over 59,000 people. In addition to the core Soho House brand, the company has additional membership brands including Soho Works, Scorpios Beach Club, The Ned Club as well as adjacent/digital memberships, including Soho Friends and Soho House Digital. We believe MCG has a valuable, unique business model as a scaled global membership platform. Its strong brand, evidenced by its long wait list, leads to very low marketing expenses and high retention, while also driving strong recurring revenue. There are currently 30 Soho Houses open, and 5 to 7 new openings are planned per year, providing a clear line of sight for attractive long-term growth. Over the long term, management believes they can have close to 100 houses globally.
We believe MCG’s growth pipeline, recurring revenue potential, operating leverage, and de-leveraging should drive solid financial growth in the medium term. We expect revenue to grow at a 34% CAGR between 2021 and 2025 as it expands the number of houses, expands other membership programs, and spending per member increases. We also expect EBITDA margins to benefit from the ramp up in new houses (the company targets House-Level Contribution Margins of 20% to 30% by year five) as well as from improving operations of existing houses and leveraging corporate expenses. The combination of strong top-line revenue, expanding EBITDA margins, and the potential for investors to better understand the recurring revenue business model should result in significant shareholder value over time.”
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Disclosure: None. 10 New Stock Picks of Billionaire Dan Loeb is originally published on Insider Monkey.
