In this article, we discuss the top 15 stock picks of billionaire Dan Loeb.
Dan Loeb is an American billionaire, activist investor, and hedge fund manager best known as the founder and CEO of Third Point, a New York-based hedge fund. Known for his bold activist strategies, sharp letters to corporate boards, and remarkable investment acumen, Loeb has become one of the most influential figures in the hedge fund industry. His ability to identify undervalued companies, implement changes to unlock value, and deliver strong returns for investors has solidified his reputation as a financial powerhouse. He was born in 1961 in California. Coming from an affluent family, his father was a partner at a prominent law firm, and his mother was a historian. Loeb attended the University of California, Berkeley, where he initially studied at the business school before transferring to the College of Letters and Science. He graduated with a degree in economics in 1983.
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Loeb’s early career in finance saw him working at Warburg Pincus in private equity and later at Citigroup in risk arbitrage. These roles provided him with the foundation to understand markets, value creation, and capital allocation. In 1995, Loeb launched Third Point LLC with $3.3 million in capital, including $300,000 of his own money. The firm initially operated as a scrappy startup but quickly grew in prominence thanks to Loeb’s exceptional returns and his willingness to engage in public activist campaigns. As of the end of the third quarter of 2024, Third Point manages over $7.4 billion in 13F securities. Third Point has delivered double-digit annualized returns since its inception, with Loeb’s keen investment instincts driving its success. Loeb takes large, concentrated positions in companies he believes can be turned around.
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For this article, we selected stocks by combing through the 13F portfolio of Third Point at the end of the third quarter of 2024. These stocks are also popular among other hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Dan Loeb of Third Point
Billionaire Dan Loeb’s Top Stock Picks
15. Roper Technologies, Inc. (NASDAQ:ROP)
Number of Hedge Fund Holders: 40
Third Point’s Stake: $133.5 million
Roper Technologies, Inc. (NASDAQ:ROP) provides software, engineered products and solutions. There are several compelling factors that make this company a strong investment. Firstly, as per the reports for the third quarter of 2024, revenue increased 13% to $1.76 billion; organic revenue increased 4%. This reflects that the company’s core business is expanding independently and its increased customer demand, which is a strong indicator of sustainable growth. Moreover, GAAP net earnings increased 6% to $368 million; adjusted net earnings increased 7% to $499 million. This demonstrates the improved core performance of the company and its sustainable earnings, which serves as a positive signal for consistent financial health. Secondly, the company plans to acquire Transact Campus for a net purchase price of $1.5 billion, including a $100 million tax benefit resulting from the transaction. The net purchase price represents approximately 14 times the expected 2025 EBITDA. Moreover, the company plans to acquire Procare Solutions for a net purchase price of approximately $1.75 billion, including a $110 million tax benefit resulting from the transaction.
14. CRH plc (NYSE:CRH)
Number of Hedge Fund Holders: 80
Third Point’s Stake: $190.1 million
CRH plc (NYSE:CRH) is an international group of diversified building materials businesses whose headquarters is in Dublin, Ireland. The following elements demonstrate why this company is an excellent investment choice. Firstly, as per the report for the third quarter of 2024, the total revenues were 7% ahead of the third quarter of the prior year, benefitting from the acquisition of Adbri in July 2024 and partly offset by the divestiture of the European Lime operations. Additionally, Adjusted EBITDA was 24% ahead of the prior year, driven by good commercial management, lower energy costs, operational efficiencies and contributions from acquisitions, which are positive indicators for investors looking for operational strength. Moreover, the company has completed 12 acquisitions for a total consideration of $1.4 billion, compared with $0.4 billion in the same period of 2023. Americas Materials Solutions completed seven acquisitions, Americas Building Solutions completed three acquisitions, and Europe Materials Solutions completed two acquisitions. This could lead to enhanced revenue streams, improved market share, and long-term value creation.
13. Cinemark Holdings, Inc. (NYSE:CNK)
Number of Hedge Fund Holders: 37
Third Point’s Stake: $194.9 million
Cinemark Holdings, Inc. (NYSE:CNK) provides extraordinary out-of-home entertainment experiences as one of the largest and most influential theatrical exhibition companies in the world. This company presents a solid investment opportunity, supported by the following points. Firstly, the report for the third quarter of 2024 showed that the total revenue for the period increased 5.4% to $921.8 million compared with $874.8 million for the prior quarter. This shows growth in business performance, driven by higher ticket sales and the potential for sustained positive performance, which could lead to favorable returns and increased shareholder value. Secondly, the company has achieved multiple all-time domestic records across box office, premium formats, and food and beverage sales throughout the holiday period, reflecting strong consumer demand and operational success.
12. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Third Point’s Stake: $216.7 million
Apple Inc. (NASDAQ:AAPL) is a consumer electronics firm. There are several compelling factors that make this company a strong investment. Firstly, as per the reports for the third quarter of 2024, the company generated nearly $27 billion in operating cash flow, which reflects strong financial health. And, the company returned over $29 billion to shareholders, demonstrating the company’s commitment to maximizing shareholder value. Secondly, the company’s commitment to a $100 million pledge, including a first-of-its-kind education hub for HBCUs and an Apple Developer Academy in Detroit, reflects a long-term strategy for talent development. This would drive future innovation, enhance brand loyalty, and support sustainable growth. Moreover, the company commits to protecting the planet by focusing on recycled and renewable materials, clean electricity, and low-carbon shipping. This vision for 2030 would bring net emissions to zero across the company’s entire carbon footprint.
11. Brookfield Asset Management Ltd. (NYSE:BAM)
Number of Hedge Fund Holders: 22
Third Point’s Stake: $251.1 million
Brookfield Asset Management Ltd. (NYSE:BAM) is an asset management firm focused on property, renewable energy, infrastructure, and private equity. This company presents a solid investment opportunity, supported by the following points. To begin, as per the report for the third quarter of 2024, fee-bearing capital reached $539 billion, marking an increase of nearly $100 billion or 23% year-over-year. This growth was driven by $135 billion of inflows over the last 12 months, growth in the company’s public affiliates, and the acquisition of partnership stakes in leading partner managers. Secondly, the company has plans to enhance BAM’s corporate structure and position BAM for broader equity index inclusion, particularly those in the US. This would simplify the corporate structure of the asset management business, making it easier for investors to understand and value the security.
10. Live Nation Entertainment, Inc. (NYSE:LYV)
Number of Hedge Fund Holders: 44
Third Point’s Stake: $256.2 million
Live Nation Entertainment, Inc. (NYSE:LYV) offers entertainment services like concerts, ticketing, sponsorship, and advertising, among others. The following elements demonstrate why this company is an excellent investment choice. The company’s concert operations drive strong financial performance as depicted in the report for the third quarter of 204. For instance, the highest ever-concert profitability with adjusted operating income was $474 million, up 39%, and margins of 7.2%, up more than two hundred basis points. In addition, double-digit increases were reported in on-site spending per fan at major festivals (over 100k fans) and up 9% at amphitheaters (same artist comparison) year-to-date. This reflects the success of Venue Nation’s events and stronger consumer spending on-site.
9. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 158
Third Point’s Stake: $309.1 million
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. This company presents a solid investment opportunity, supported by the following points. To begin, the report for the fourth quarter of 2024 solidifies the position of the company as a leading company in the semiconductor industry. For instance, TSMC reported revenues of approximately $26.4 billion, a 38.8% increase year-over-year. Secondly, the company marked a significant milestone in sustainable manufacturing with the inauguration of the Taichung Zero Waste Manufacturing Center. During the ceremony, TSMC also signed a Memorandum of Understanding (MOU) on carbon capture with the Ministry of Environment. This would help the company prioritize and invest in the circular economy, accelerating development momentum to create a better planet for future generations. Moreover, TSMC has signed a memorandum of understanding with Amkor Technology to collaborate and bring advanced packaging and test capabilities to Arizona, further expanding the region’s semiconductor ecosystem.
8. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Third Point’s Stake: $311.9 million
Meta Platforms, Inc. (NASDAQ:META) engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. There are several compelling factors that make this company a strong investment. The first is growing user engagement across the platform, as depicted in the report for the third quarter of 2024. For instance, daily active people (DAP) was 3.29 billion on average for September 2024, an increase of 5% year-over-year. This indicates strong retention and user activity, showcasing the platform’s expanding reach. Moreover, Ad impressions increased by 7% year-over-year. This demonstrates the platform’s ability to attract more advertisers and deliver more targeted ads. Secondly, the development of Metaverse, an immersive digital environment, through its Reality Labs Division is another great initiative. The launch of the Meta Quest virtual reality headset and investment to build the virtual space will solidify its position in this ever-evolving digital world.
7. Intercontinental Exchange, Inc. (NYSE:ICE)
Number of Hedge Fund Holders: 84
Third Point’s Stake: $334.9 million
Intercontinental Exchange, Inc. (NYSE:ICE) operates regulated exchanges and is based in Georgia. The following attributes highlight why this company presents a compelling case for investment. To begin with, an 11% year-over-year increase in Total Open Interest (OI) was witnessed in the report for the third quarter of 2024, indicating a growing number of active contracts, suggesting increased investor interest. In addition, the 2% rise in Average Daily Volume (ADV) showed steady trading activity. Record high 4Q24 ADV of 22% and 2024 ADV of 24% reflected strong market momentum and higher trading volumes throughout the year. Secondly, the company has announced the listing of a new futures contract for Maryland Compliance Non-Black Liquor Renewable Energy Credit Tier 1. This addition would enhance the company’s environmental future offerings, fulfilling the demands for renewable energy credits.
6. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Third Point’s Stake: $374.4 million
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. The investment potential of this company is underscored by these key elements. Starting with, robust financial growth is witnessed as depicted in the report for the fourth quarter of 2024. For instance, LinkedIn revenue increased by 10%, reflecting strong platform growth. In addition, dynamic products and cloud services revenue increased by 16%, driven by Dynamics 365 revenue growth of 19%, showing successful expansion in enterprise solutions. Secondly, the company has acquired Activision Blizzard, which is expected to enhance Microsoft’s gaming portfolio, with Xbox content and services revenue increasing by 61% in the fourth quarter of fiscal year 2024.
5. Bath & Body Works, Inc. (NYSE:BBWI)
Number of Hedge Fund Holders: 36
Third Point’s Stake: $376.2 million
Bath & Body Works, Inc. (NYSE:BBWI) operates as a specialty retailer of home fragrances, body care, and soap and sanitizer products. The following are some factors that make Bath & Body Works a great investment choice. Firstly, a robust increase in net sales is witnessed in the report for the third quarter of 2024. For instance, the company reported net sales of $1,610 million, an increase of 3% compared to net sales of $1,562 million for the quarter ended October 28, 2023, indicating a positive signal of growth in the company’s core operation. The company’s agile business model and predominantly US-based supply chain have enabled it to increase sales. Additionally, the company is committed to environmental sustainability, as outlined in its Environmental, Social, and Governance (ESG) strategy. Bath & Body Works targets 50% of packaging to be recyclable, reusable, or compostable by 2025, and 100% by 2030.
4. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 97
Third Point’s Stake: $376.4 million
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company. The investment potential of this company is underscored by these key elements. Starting with, the report for the third quarter of 2024 showed great financial results as net income from ongoing operations was $1,855 million and ongoing operations adjusted EBITDA was $1,444 million. This reflects solid profitability and operational efficiency. Additionally, the Board authorized an additional $1 billion of share repurchases, which is expected to be utilized by year-end 2026. This signals a strategic effort to enhance shareholder returns over the next few years. Secondly, the company has entered into a definitive agreement with affiliates of Nuveen Asset Management and Avenue Capital Management to acquire their combined 15% equity interest in Vistra Vision. This will result in Vistra being the sole owner of its Vistra Vision subsidiary, which includes its zero-carbon nuclear, energy storage, and solar generation assets, as well as its retail business.
3. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 98
Third Point’s Stake: $542.1 million
Danaher Corporation (NYSE:DHR) is a Washington-based conglomerate with interests in professional, medical, industrial, and commercial products and services. This company stands out as an exceptional investment opportunity due to the following factors. First, the report for the third quarter of 2024 showed business expansion and stable underlying operations driving positive growth. For instance, revenues increased 3.0% year-over-year to $5.8 billion, and non-GAAP core revenue increased 0.5%. In addition, reported operating cash flow was $1.5 billion, and non-GAAP free cash flow was $1.2 billion, demonstrating strong cash generation and efficient cash utilization. Secondly, Danaher Diagnostics LLC and Danaher Ventures LLC, two subsidiaries of Danaher Corporation, have announced that they have formed an investment partnership with Innovaccer, a leading healthcare artificial intelligence (AI) company, seeking to accelerate the adoption of precision diagnostics both by clinicians and population health teams, facilitating value-based care.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Third Point’s Stake: $689.4 million
Amazon.com, Inc. (NASDAQ:AMZN) engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. This company’s appeal as an investment opportunity lies in several key aspects. Firstly, as per the report for the third quarter of 2024, free cash flow less principal repayments of finance leases and financing obligations increased to $44.9 billion for the trailing twelve months, compared with $15.9 billion for the trailing twelve months. This reflects the company’s position to reduce debt, reinvest, and return value to shareholders. In addition, reported operating cash flow increased 57% to $112.7 billion for the trailing twelve months, compared with $71.7 billion for the trailing twelve months, highlighting the company’s ability to fund operations and investments. Secondly, the company has announced investments in the Delivery Service Partner program of $2.1 billion in North America to support safety programs, training, incentives, and more. The company also plans to invest 25 billion yen in Japan to support last-mile delivery innovation and safety and technology for drivers.
1. PG&E Corporation (NYSE:PCG)
Number of Hedge Fund Holders: 49
Third Point’s Stake: $983.6 million
PG&E Corporation (NYSE:PCG) is a California-based company that deals in electricity and natural gas. The following attributes highlight why this company presents a compelling case for investment. To begin with, the report for the third quarter of 2024 shows a positive picture of the company’s finances. For instance, reported GAAP earnings were $0.27 per share for the third quarter of 2024, compared to earnings of $0.16 for the same period in 2023. This increase reflects strong operational performance and reassures investors about the company’s potential for sustainable returns. Moreover, the company has added $1 billion to the 2024-2028 capital plan in response to growing customer demand. Secondly, the retail customers of the company have received 100% greenhouse gas-free electricity, making the company’s portfolio of electricity sources one of the world’s cleanest. Also, PG&E has brought online more than 2,100 megawatts of new battery storage capacity to help integrate renewable energy sources and enhance reliability.
While we acknowledge the potential of PG&E Corporation (NYSE:PCG) as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a stock that is more promising than PG&E Corporation (NYSE:PCG) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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