In this article, we present the list of the top 6 stocks billionaire John Paulson is selling off. You can skip our comprehensive analysis of Paulson & Co.’s history, investment philosophy, and hedge fund performance, and go directly to Billionaire John Paulson is Selling These 3 Stocks.
American billionaire hedge fund manager John Alfred Paulson is the CEO of Paulson & Co., an investment management company he established in New York in 1994. When the credit bubble peaked in 2007, John Paulson made his fortune betting against subprime mortgages.
In July 2020, Reuters reported that John Paulson had decided to quit managing money for external customers and converted his company into a family office. He now joins a number of well-known fund managers, including Carl Icahn, George Soros, and Stanley Druckenmiller, who have all returned outsiders’ money and released themselves from the demands of sending quarterly client letters, explaining complex positions to clients, and remaining tethered to the office. Forbes estimates that Paulson is worth $3 billion as of September 16.
On August 12 last year, in an interview with David Rubenstein of Bloomberg Wealth, Paulson called cryptocurrencies a bubble. In the interview, Paulson termed gold as a good hedge against inflation. Surprisingly enough, Paulson dumped SPDR Gold Shares (NYSE:GLD) completely during Q2 when the US inflation rate was one of the highest, touching its four-decade high of a 9.1%. In the same interview, he was asked about the best investment idea if one wants to invest $100,000. His answer was to buy their own home. According to Paulson, if you take that $100,000, pay 10% down, and secure a $900,000 mortgage, you can purchase a home for $1 million. Home prices increased by 20% in July 2022, according to a report. Therefore, if you put $100,000 down to buy a home for $1 million and it went up 20%, you would have made $200,000 on your $100,000 investment. The house will increase in value and the return on your equity investment will increase the longer you wait.
Paulson & Co. Investors’ Portfolio
John Paulson’s 13F portfolio value decreased from $3.25 billion to $2.03 billion in the second quarter. For the portfolio date of 2022-06-30, Paulson & Co. disclosed 32 total holdings in their most recent 13F filing with the SEC. The top three positions are at 43% of the portfolio. The hedge fund has a top 10 holdings concentration of 78.64%, with the health care sector comprising 36.52% of the portfolio. Paulson & Co.’s largest holding is Horizon Therapeutics PLC (NASDAQ:HZNP), with shares held of 6.19 million.
Some of the notable holdings of Paulson as of the end of the second quarter include Occidental Petroleum Corporation (NYSE:OXY), Bausch Health Companies Inc (NYSE:BHC) and Barrick Gold Corp (NYSE:GOLD).
Our Methodology
For this study, we used John Paulson’s Paulson & Co. Q2 2022 portfolio. We picked the stocks that Paulson’s fund entirely exited during the three-month period ending June 30.
Billionaire John Paulson is Selling These 6 Stocks
06. VanEck Oil Services ETF (NYSEArca:OIH)
VanEck Oil Services ETF (NYSE:OIH) is a 100% oilfield service exchange-traded fund. Over the next five years, it is anticipated that the demand for oil and gas will either stay the same or increase. The drilling and completion of new wells are required to maintain production levels as the existing reservoirs’ productivity is on a decline. Drill rig counts are rebounding, which suggests that energy producers are spending more money on new wells, leading to rising oilfield services income. VanEck Oil Services ETF (NYSE:OIH) is a great bet on recovering oilfield services.
VanEck Oil Services ETF (NYSE:OIH) has gained 16% in value as compared to the S&P500 return of -19% year to date. Paulson & Co. initiated its stake in VanEck Oil Services ETF (NYSE:OIH) during Q2, 2021, by purchasing 220,000 of its shares worth roughly $48.165 million. Before dumping its complete stake during the most recent quarter, Paulson & Co. held 165,000 shares of VanEck Oil Services ETF (NYSE:OIH), valued at $46.621 million.
05. TIM S.A. (NYSE:TIMB)
A telecommunications business called TIM S.A. (NYSE:TIMB) offers broadband internet access, value-added services, mobile phone and data services, as well as other telecommunications services and products in Brazil. In addition to providing corporate solutions for small, medium, and large businesses, the organization also provides services for individuals. It had 52.6 million subscribers as of December 31, 2021. The corporation has its headquarters in Rio de Janeiro, Brazil.
On June 30, TIM S.A. (NYSE:TIMB) price target was increased to $17 from $16 by Barclays analyst Mathieu Robilliard who maintained an Overweight rating on the stock. Paulson & Co. initially acquired 1.001 million shares of TIM S.A. (NYSE:TIMB) during Q4, 2020, valued at $13.937 million. Before exiting its position during the current quarter, Paulson & Co. held 961,455 shares of TIM S.A. (NYSE:TIMB) in the previous quarter, worth roughly $13.941 million.
04. SPDR Gold Shares (NYSE:GLD)
SPDR Gold Shares (NYSE:GLD) is a US-based SPDR family of exchange-traded funds that currently has a $57.7 billion market capitalization. SPDR Gold Trust is launched and managed by World Gold Trust Services. It provides investors with a cutting-edge, comparatively inexpensive, and safe means of gaining access to the gold market. The largest physically backed gold exchange-traded fund (ETF) in the world is SPDR Gold Shares (NYSE:GLD), which debuted on the New York Stock Exchange in November 2004 and is now traded on NYSEArca since December 13, 2007.
Paulson & Co. initiated its stake for the first time in SPDR Gold Shares (NYSE:GLD) during Q4, 2010. It purchased 31.5 million shares of SPDR Gold Shares (NYSE:GLD) valued at $4.36 billion. Paulson & Co. held 1 million shares of SPDR Gold Shares (NYSE:GLD) in the previous quarter, worth roughly $180.65 million. However, it completely exited its position in SPDR Gold Shares (NYSE:GLD) during Q2.
Even though Paulson sold GLD in Q2, he owns several gold and mining stocks. Some notable defensive names in his portfolio include Occidental Petroleum Corporation (NYSE:OXY), Bausch Health Companies Inc (NYSE:BHC) and Barrick Gold Corp (NYSE:GOLD).
Kinsman Oak Equity Fund, in its Q1 2021 investor letter, mentioned SPDR Gold Shares (NYSE:GLD), and shared its insights on the company. Here is what the fund said:
“SPDR Gold Trust (GLD) – Closed Long Position
We initiated a position in GLD last summer to hedge against potential currency debasement. Our long-term thesis hasn’t changed much since then. The United States continues to run enormous fiscal deficits and we believe the Fed will eventually have to choose between the dollar and the stock market.
We chose to close our GLD position for two reasons. First, gold is inversely correlated to real yields in the short run and behaves like a long duration asset in that regard (Appendix E). The precious metal is correlated to M2 money supply growth only over long periods of time. Second, we are exploring more asymmetric and creative ways to profit from debasement rather than owning the physical metal.”
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Disclosure. None. Billionaire John Paulson is Selling These 6 Stocks is originally published in Insider Monkey.
