5 Favorite Stocks of Dan Loeb’s Third Point

3. PG&E Corporation (NYSE:PCG)

Third Point’s Stake Value: $934,780,000

Percentage of Third Point’s 13F Portfolio: 6.52%

Number of Hedge Fund Holders: 59

PG&E Corporation (NYSE:PCG) operates via its primary subsidiary, Pacific Gas and Electric Company, supplying electricity and natural gas to customers across California. Billionaire Dan Loeb held 77 million PG&E Corporation (NYSE:PCG) shares in the fourth quarter of 2021, worth $934.7 million, representing 6.52% of his total 13F holdings. 

PG&E Corporation (NYSE:PCG)’s revenue for the year in 2021 stood at $20.6 billion, up from $18.4 billion in 2020. The net loss in 2021 came in at $102 million, a significant rebound compared to a loss of $1.3 billion in the preceding year. In its 2022 guidance, PG&E Corporation (NYSE:PCG) expects GAAP earnings ranging between $0.89 to $1.23 and non-GAAP core earnings per share of $1.07 to $1.13, versus consensus of $1.12.

On April 12, Mizuho analyst Paul Fremont raised the price target on PG&E Corporation (NYSE:PCG) to $18 from $16 and kept a Buy rating on the shares after the company announced a settlement agreement in the Kincade and Dixie fires. 

According to the fourth quarter database of Insider Monkey, 59 hedge funds were bullish on PG&E Corporation (NYSE:PCG), with stakes exceeding $4 billion, compared to 54 funds in the prior quarter, holding stakes in the company worth $3.8 billion. Edward A. Mule’s Silver Point Capital owned a prominent position in PG&E Corporation (NYSE:PCG), with 32.4 million shares valued at roughly $394 million. 

Here is what GoodHaven Capital Management has to say about PG&E Corporation (NYSE:PCG) in their Q4 2020 investor letter:

“During the period we purchased a new holding – PG&E Corporation – the California based utility (PCG). We expect that contrarian special situations will continue to (opportunistically) be an important part of the portfolio. After all, we bought PCG – which has filed Ch. 11 twice related to prior exposure to wildfire liabilities and staggering mismanagement – right in the middle of California’s recent heavy wildfire season. Our thinking here is that the reorganized utility has new regulatory protections that significantly reduces wildfire liability exposure, an above average rate growth profile and potentially much better management – they were searching for a new CEO when we made our investment. We purchased the stock at a high single digit forward earnings multiple, a discount to its peers that trade in the mid to high teens. Shortly after our purchases PG&E hired the well regarded Patti Poppe as their new CEO – we like this decision.”