Billionaire Dan Loeb has made some interesting moves lately. The founder of the $11 billion hedge fund, Third Point, Loeb’s bets on Greek bonds and Yahoo! helped his flagship fund return 21% in 2012. Let’s see what some of his big moves were last quarter.
Loeb’s selloffs
Loeb’s biggest selloff was his dumping of 710,000 shares of Apple Inc. (NASDAQ:AAPL), which had been 9.3% of Third Point’s portfolio during the third quarter. As has been well-documented, Apple Inc. (NASDAQ:AAPL)’s growth story might be fading. 
Jefferies’ take on the stock is rather intriguing. They believe that iPhone sales will continue slowing, margins will keep compressing, and management’s enthusiasm is fading. I cannot disagree.
Apple Inc. (NASDAQ:AAPL)’s sales have performed well in the past, given its strong brand and loyal customer base. However, Samsung is becoming a formidable opponent as well, and Google Inc (NASDAQ:GOOG) continues to lead the mobile-phone operating system market with over 50% market share.
Another of Loeb’s selloffs was United Technologies Corporation (NYSE:UTX), which had been 2.4% of the fund’s third-quarter portfolio. The company designs, manufactures, and services products that incorporate advanced technologies. United has seen notable weakness due to Europe, and I don’t like the company’s overexposure to the construction and aerospace industries. Another headwind is the company’s dependence on the U.S. government’s defense budget. As well, the company should also see interim pressure related to its Goodrich acquisition and divestiture of several non-strategic assets.
Loeb’s additions
Third Point was active on the additions sides, adding Morgan Stanley (NYSE:MS), Herbalife Ltd. (NYSE:HLF), and Dollar General Corp. (NYSE:DG).
Morgan Stanley is now Third Point’s seventh-largest holding. Morgan basically gets its revenues from two major sources, 40% derived from institutional securities, which includes capital raising and financial advisory, while 50% is derived from global wealth management that encompasses brokerage and investment advisory services.
M&A and investment banking performances remain weak for the company, but stable credit spreads and strong trading activities should buoy the company over the interim. With a 0.8% dividend yield, one of the lowest in the the industry, the bank could be upping its dividend in the near future.
Herbalife Ltd. (NYSE:HLF) was a new 3.1 million-share position and now makes up 1.85% of Third Point’s hedge fund. Herbalife Ltd. (NYSE:HLF)has been under pressure of late by billionaire Bill Ackman, who is openly short the supplement company. Meanwhile, Dan Loeb and Carl Icahn are on the long side.
Recent news shows that Herbalife Ltd. (NYSE:HLF) has reached an agreement with Carl Icahn. The company will increase the size of its board to accommodate Icahn-appointed directors. I would remain cautious on what the ultimate fallout could be from the billionaire battle taking place over whether Herbalife is a pyramid scheme. The company also pays a 3% dividend yield for investors willing to ride out the turmoil.
Third Point added 2.15 million Dollar General Corp. (NYSE:DG) shares last quarter, making the stock 1.72% of the fund’s portfolio. Dollar General, founded in 1939, has amassed an impressive presence across the U.S., with over 10,000 stores. Since its IPO in 2009, the stock is up 110%.
Dollar General is also expected to move beyond consumables, to include health and beauty aid products. What’s more is the discount retailer plans to expand into California and the northeastern U.S. during 2014. Dollar General managed to post EPS of $0.63 last quarter, compared to $0.50 for the same quarter last year, which was on the back of 4% higher same store sales year over year.
Don’t be fooled
I like Morgan Stanley’s prospects, especially after its Smith Barney takeover, and I also like Dollar General given its position in the discount market. But unlike Third Point, I would rather take a “wait and see” approach with Herbalife Ltd. (NYSE:HLF).
The article Billionaire Dan Loeb’s Latest Moves originally appeared on Fool.com and is written by Marshall Hargrave.
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