CBS Corporation (NYSE:CBS) has also made the list, with PointState holding a stake of 4,669,760 shares worth $218 million at the end of the quarter, up from $9.5 million one quarter earlier. Up more than 30% year-to-date, CBS Corporation (NYSE:CBS)also has spinoff plans of its outdoor advertising segment, and after selling its Asian and European assets; the remaining U.S. business will be spun into a REIT. The exact details of such a transaction are not known, but it’s quite possible that existing CBS Corporation (NYSE:CBS) shareholders could receive a one-to-one share transfer, in addition to a special dividend of some kind; either scenario would warrant PointState’s investment dollars, and the markets generally agree.
The recent 13F also has PointState holding 3,934,302 shares of ADT Corp (NYSE:ADT), valued at $192.6 million. Though it is down by more than 11% in 2013, ADT has potential moving forward. The company is in the midst of the early phase of its $2 billion buyback, and its presence in the home security space is a net positive as the housing market continues to rebound. ADT’s mobile-linked security system, Pulse, has finally started to reward the company’s bottom line, as recent financials indicate subscriber penetration rates are improving. These factors, in combination with a particularly undervalued cash hoard—at 9 times free cash flow—should give bulls enough of a reason to sleep at night.
Finally, we come to HollyFrontier Corp (NYSE:HFC); the fund reported a position of 3,465,995 shares worth $178.3 million as of March 31, 2013, up from 2,179,014 shares, worth $280.5 million at the end of 2012. A forward P/E near 8 times year-ahead earnings, HollyFrontier is abnormally cheap. Like Cheniere Energy, Inc. (NYSEMKT:LNG), a key advantage that HollyFrontier has on the profitability front is location. With oil refineries primarily in the Western U.S., HollyFrontier’s operations are closer to shale reserves in states like California, Colorado and North Dakota in comparison to peers that operate in the Gulf—lower transportation costs.
It remains to be seen how natural gas exportation might affect HollyFrontier in the long-term, but it’s worth noting that Wall Street sees upside of 20% from current levels. Shares have already popped 75% over the past year.
Final thoughts
In short, each of the top positions in PointState’s 13F portfolio is driven by a factor that’s unique to each company. With energy players Cheniere Energy, Inc. (NYSEMKT:LNG) and HollyFrontier, investors can snatch up companies that look set to face lower costs than their peers in the coming years, while CBS Corporation (NYSE:CBS) and News Corp (NASDAQ:NWSA) are two attractive media spinoff situations. The former’s REIT adventure looks a bit more beneficial, though we’ll be watching 21st Century Fox as well. ADT is more of a pure investment play, but even it has a bullish buyback program driving some market participants to get in on the action.
Disclosure: none
