These Billionaire Michael Price’s Stock Picks Can Destroy Your Portfolio

Billionaire Michael Price is an American value investor and hedge fund manager who founded MFP Investors, a New York-based investment fund, in 1988. Mr. Price has a net worth of $1.2 billion, according to Forbes. He has been listed in the Time magazine as one of the 25 most influential people in America. However, his hedge fund’s performance has not been impressive.  According to the backtests performed by Insider Monkey’s research team, during 2000-2012, MFP Investors inched down by 0.82% per month, compared to 0.29% per month returned by S&P Index in the same period. This shows that the fund lagged the index by 1.17 percentage points per month.

With this in mind, let’s take a closer look at some of the largest positions in MFP Investors’ equity portfolio as of the end of September.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

Michael Price of MFP Investors

MFP Investors reported ownership of 193,560 shares of General Motors Company (NYSE:GM) worth $6.15 million as of the end of the third quarter. The stock has appreciated by over 7% year-to-date. On Wednesday, Investment firm Instinet reiterated its ‘Neutral’ rating on General Motors (NYSE:GM’s stock and raised its price target to $34 from $32. The company recently has announced plans to start testing autonomous vehicles on public roads in Michigan after the approval of SAVE Act legislation to support self-driving cars. In other news, General Motors said on Monday that it would close five of its US assembly plants due to an oversupply of Sedans. A total of 62 hedge funds tracked by Insider Monkey were bullish on General Motors Company (NYSE:GM) at the end of September, down by three over the quarter.

At the end of the third quarter, there were 145,000 shares of E I Du Pont De Nemours And Co (NYSE:DD) in MFP Investors’ 13F portfolio, worth $9.71 million. On Wednesday, a US Jury in Ohio ordered Du Pont De Nemours And Co (NYSE:DD) to pay a man $2 million after his claims to have developed testicular cancer from exposure to a toxic chemical leaked from one of the company’s plants were found valid. This is the third time since October 2015 when DuPont is ordered to pay money in compensatory damages. The company is accused of dumping the hazardous chemical called ‘C-8’ in nearby waters of its plants, causing excessive contamination of the environment. This chemical is the primary cause of testicular and kidney problems. The stock is up by over 13% year-to-date. Jonathon Jacobson’s Highfields Capital Management owned 7.81 million shares of E I Du Pont De Nemours And Co (NYSE:DD) at the end of September. It was one of the 36 funds from our database that held shares of the company.

We will see the rest of MFP’s positions of the third quarter on the next page.