Top 5 Stocks Billionaire Daniel Loeb Just Bought

Topping the list of Daniel Loeb’s newest stock buys is PG&E Corp (NYSE:PCG), which Third Point opened a massive position in during Q3, acquiring 84.94 million shares valued at over $797 million on September 30. The position is now the largest Third Point has in any stock and gives the fund a 4.2% ownership stake in the utilities company, which emerged from bankruptcy protection at the start of the third quarter.

While this is a new 13F portfolio position for Third Point, the fund has had involvement with the company dating back to late 2018, when PCG’s bonds began trading at distressed levels. Loeb discussed the company in his Q2 2020 investor letter and detailed the rationale behind supporting its reorganization efforts:

“We believed PG&E’s core business remained in a strong position reflecting a classic “good business/bad capital structure” restructuring and made it the firm’s largest distressed position. By early 2020, the company reached an agreement to restructure the business and as part of that exit plan, the company needed to raise approximately $26 billion in new capital including $9 billion in new common equity. The exit financing was used to settle insurance and victims’ claims relating to the 2017 and 2018 wildfires, repay some pre‐and post‐petition creditors, and contribute to the new Wildfire Fund.”

He further remarked on some of the company’s attractive fundamentals relative to its industry, including a valuation that was less than half that of its utilities sector peers, with PCG shares trading at just 8x expected 2022 earnings. Loeb expected that discount to its peers to diminish in time as PCG found a permanent CEO, built up its shareholder base, and ironed out its operational challenges. PCG shares have gained 28.5% since the end of June.

For more timely stock picks from the world’s most successful investors, don’t miss the Top 10 Stocks Billionaire Ray Dalio Just Bought.

Disclosure: None.