Actavis plc (NYSE:ACT) is next, with Loeb owning 3.45 million shares worth $693.68 million at the close of 2014, a 20% increase from the previous quarter. The $83 billion pharmaceutical company, one of the largest generic drug makers in the world, just issued one of the largest corporate-bond offerings in history at $21 billion, as it gathers cash to pay for its $66 billion purchase of botox maker Allergan, Inc. (NYSE:AGN), whose name it will adopt once the companies merge. Actavis has been a successful investment for Loeb, who first entered the position in the first quarter of 2014, with shares are up nearly 50% since the end of that quarter.
eBay Inc (NASDAQ:EBAY) is next, which Loeb first entered in the third quarter of 2014, with a 4.5 million share stake. The timing was right, as $70 billion e-commerce company eBay announced its intentions to spin off its PayPal division right at the end of that quarter, after repeated pressure from activist Carl Icahn. Shares spiked, though they would dip again by the middle of October when Apple launched Apple Pay, a dangerous new competitor to PayPal. Loeb said in an investor letter at the time that the dip marked “an interesting entry point” for investors. Loeb doubtlessly took advantage himself, having more than doubled his previous stake to 10.0 million shares worth $254.84 million by the end of the year. Shares of eBay have since rebounded strongly, up 23.39% since mid-October.
Phillips 66 (NYSE:PSX) is a new position Loeb initiated during the fourth quarter, with 5 million shares valued at $358.50 million. The $42 billion midstream, chemicals, and refining company has endured the oil price crisis much better than the majority of its peers, up 2.85% since the start of 2014, while the sector as a whole was battered, with energy stocks on the S&P 500 suffering a collective 10% loss in 2014. Phillips 66 now represents about half of Loeb’s entire investment in energy equities, showing his particular trust in this company, which sports a high growth outlook in 2015, and a very reasonable price to earnings ratio of 9.
Citigroup Inc (NYSE:C) brings up the rear of this list, also checking in as a new position for Loeb with 5.0 million shares valued at $270.55 million at year’s end. It was an interesting time to buy into the $163 billion financial services company, and may have indicated Loeb’s confidence that the company would pass the important Federal Reserve stress test that it failed last year, which prevented it from increasing dividends or buying back shares. Citigroup did indeed pass the test this week, and also announced the sale of its profitable U.S sub-prime lending business OneMain Financial to Springleaf Holdings Inc (NYSE:LEAF), which sent that company’s shares up over 30% and Citigroup’s down slightly, as investors scratched their heads at the decision, though analysts believe it’s a positive step towards focusing Citi’s efforts on its core business.
Disclosure: None
