Billionaire Activist Paul Singer Is Terrible At Investing In These Stocks

International Business Machines Corp. (NYSE:IBM)

– Shares Covered by Call Options Owned by Elliott Management (as of September 30): 350,000
– Value of Elliott Management’s Holding (as of September 30): $55.60 Million

Paul Singer’s activist fund cut its IBM call options position in half during the third quarter, after initiating it during the second quarter. Shares pushed towards their 52-week high in the third quarter, which likely allowed the fund to successfully close some of its calls. After trading flatish for several months, shares have again rallied this month, pushing year-to-date gains to 21%.

International Business Machines Corp. (NYSE:IBM)’s CEO recently stated that the company intends to hire as many as 25,000 workers in the U.S over the next 4 years, and called on the Trump government to update the Perkins Career and Technical Education Act in early-2017 after it takes power, to heighten federal support for vocational training. Warren Buffett remains a firm supporter of IBM, owning 81.23 million shares of it on September 30.

Marathon Petroleum Corp (NYSE:MPC)

– Shares Covered by Call Options Owned by Elliott Management (as of September 30): 1 Million
– Value of Elliott Management’s Holding (as of September 30): $40.59 Million

Elliott Management opened both a new long position of 3.13 million shares and a new position of call options covering 1 million shares of Marathon Petroleum Corp (NYSE:MPC) during the third quarter. The positions appear to have been well-timed, as shares of MPC are well above their third-quarter level.

However, fellow activist investor Carl Icahn believes the refining industry could be at great risk from the unregulated trading of Renewable Identification Numbers, or fuel credits, which has greatly increased costs to refiners, regardless of oil prices. Icahn compared the potential implications of RIN trading to the chaos that resulted from mortgage-backed securities trading, which led to the financial crisis.

QUALCOMM, Inc. (NASDAQ:QCOM)

– Shares Covered by Put Options Owned by Elliott Management (as of September 30): 1.03 Million
– Value of Elliott Management’s Holding (as of September 30): $70.83 Million

Lastly is QUALCOMM, in which Singer’s fund maintained its put options covering 1.03 million of the company’s shares, which it initiated during the second quarter. The position has not worked out for the fund as of yet, as shares jumped by about 17% in July and haven’t looked back, leaving them well above Elliott Management’s entry point. Despite the 34% year-to-date gains, QUALCOMM, Inc. (NASDAQ:QCOM) remains an attractive dividend stock, with its forward yield standing at 3.16%. It was also an extremely popular stock among the funds that we follow during Q3, with the number of funds long QUALCOMM jumping to 69 on September 30 from just 48 on June 30.

Disclosure: None