Dan Loeb And Keith Meister Both Betting Heavily On These Stocks

Dan Loeb, the founder of Third Point, is a pioneer activist investor, whose flagship fund performed impressively in 2010, returning 41.7%. Keith Meister, also an activist investor, previously worked with billionaire investor Carl Icahn before going on head to found Corvex Capital. Investor George Soros offered $250 million as seed capital to Meister, with his fund launching in March 2011. According to the 13F filings of the two funds for the period of June 30, Third Point had a public equity portfolio with $10.68 billion of holdings, while Corvex Capital’s stood at $9.14 billion. Both funds are known to sport diversified portfolios. After collating data relating to their 13F filings, Insider Monkey spotted some similarities relating to their moves on different stocks. In this article, we focus on three stocks in which both premier funds were betting heavily on in the second quarter; read on to find out what they are.

We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 118% since then and outperformed the S&P 500 Index by around 60 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.

Anheuser Busch Inbev SA (ADR) (NYSE:BUD)

Having highlighted our strategy, let’s now shift our focus to Anheuser Busch Inbev SA (ADR) (NYSE:BUD), in which both Dan Loeb and Keith Meister have large positions in. The 13F filings of these funds show that Third Point was long in the stock with 1.75 million shares valued at $211.17 million at the end of the second quarter, while Corvex Capital held 1.07 million shares with a market value of $129.00 million. While Third Point reduced its stake in the stock by 13% during the quarter, Corvex Capital raised its stake during the quarter by 24%. Anheuser Busch Inbev SA (ADR) (NYSE:BUD)’s share price has not performed well this year, losing 4.04% year-to-date and 10.68% of its share price since the beginning of the third quarter. The company’s second quarter earnings results failed to meet analysts’ consensus estimates, a factor attributed to the recent drop in its share price. Analysts had expected EBITDA growth of 8%, but the company posted just 4% growth. The decline is also attributed to the fact that Anheuser Busch Inbev SA (ADR) (NYSE:BUD) benefited immensely from the FIFA World Cup last year. Soroban Capital Partners, managed by Eric W. Mandelblatt, emerged as the biggest shareholder out of the more than 700 hedge funds that we track, having raised its stake during the second quarter to 7.45 million shares valued at $899.29 million at the end of the quarter.

Yum! Brands, Inc. (NYSE:YUM)

Another stock in which both Dan Loeb and Keith Meister are betting on is the fast food holding company Yum! Brands, Inc. (NYSE:YUM), in which Third Point held a total of 3.58 million shares valued at $322.04 million after boosting its position by 9%. Corvex Capital on the other hand raised its stake in the stock by a whopping 1,685% to become the biggest shareholder of the company among those tracked by Insider Monkey. The fund held a total of 15.29 million shares worth $1.38 billion. The Louisville, Kentucky-based owner of KFC, Taco Bell, and Pizza Hut, among other brands, has walked a bumpy road in China due to the country’s economic slowdown, which has also led to the devaluation of the country’s currency, the yuan. China is a vital market for Yum! Brands, Inc. (NYSE:YUM), accounting for close to half of its revenue. Meister suggested at the Ira Sohn Conference in May that it should consider spinning off its China unit into a separate company. In Yum! Brands, Inc. (NYSE:YUM)’s most recent results, its revenue from China fell by 4% on a year-over-year basis. At the end of the second quarter, Senator Investment Group, led by Doug Silverman and Alexander Klabin, held a total of 3.50 million shares of the stock with a market value of $315.28 million. Billionaire Ken Griffin’s Citadel Investment Group followed with 1.93 million shares worth $173.84 million.

Williams Companies Inc (NYSE:WMB)

In conclusion, let’s consider Williams Companies Inc (NYSE:WMB), in which Third Point initiated a new position of 1.50 million shares valued at $86.09 million in the second quarter, while Corvex Capital held 41.68 million shares worth $2.39 billion, representing its biggest portfolio holding. The Tulsa, Oklahoma-based energy company recently rejected a $53 billion takeover bid by Energy Transfer Equity LP (NYSE:ETE), but its doors remain open to other bids and merger proposals. Shares are now flat for the year after the rejection of the offer, after being up by over 35% at one point. Soroban Capital Partners, led by Eric W. Mandelblatt, also held a long position in the stock of 21.00 million shares valued at $1.21 billion. Billionaire Stephen Mandel‘s Lone Pine Capital was also long in Williams Companies Inc (NYSE:WMB) with 13.94 million shares worth $800.20 million after raising its stake in the stock by 17% during the second quarter.

Disclosure: None