Why You Should Avoid These Stock Picks of Billionaire John Paulson

American International Group Inc. (NYSE:AIG) is the biggest financial stock holding of the fund, which owns more than 9 million shares worth $537 million at the end of September. Though the insurance giant ran into financial problems during the Lehman crisis, it has recovered well since that time and currently trades around its 52-week high. American International Group Inc. (NYSE:AIG) chief investment officer Doug Dachille has said that regulation has become excessive and “extremely inconvenient” over the last eight years. He also said that the Federal Reserve will only hike rates twice in 2017 and not three times as per its current projection.

At the end of the third quarter, 82 smart money managers in our system held $6.99 billion worth of AIG shares, comprising 12.3% of the company’s float on September 30. Israel Englander’s Millennium Management was one of the biggest buyers of American International Group Inc. (NYSE:AIG) during the third quarter, adding 1.33 million shares of the company to its portfolio.

VMware, Inc. (NYSE:VMW) is one of the world’s largest virtualization and cloud infrastructure solutions providers. Paulson & Company held 1.9 million shares of the stock on September 30, with a value of $140 million. The fund reduced its position in the stock by 58,065 shares during the third quarter, though it remained the biggest technology holding of the fund. VMware, Inc. (NYSE:VMW) has nearly doubled its revenue over the last 5 years, driven by strong adoption of its cloud solutions. The company recently announced that it would repurchase $500 million of its shares. Citadel Advisors sold its entire stake of 2 million shares of WMW during Q3.

Anand Parekh’s Alyeska Investment and Steve Cohen’s Point72 Asset Management also liquidated their entire holdings of VMware, Inc. (NYSE:VMW) during the September quarter. While the number of funds that we track which owned VMware, Inc. (NYSE:VMW) increased by 2 to 43 during the third quarter, the total value of their holdings declined to $1.79 billion from $1.97 billion.

PC giant Hewlett Packard Enterprise Co (NYSE:HPE) was Paulson & Company’s second-largest technology holding at the end of Q3, constituting 1.47% of the fund’s 13F portfolio. The position was a new one, with Paulson buying 5.9 million shares with a value of $135.7 million during the quarter. During its most recent quarter, Hewlett Packard Enterprise Co (NYSE:HPE) reported in-line earnings of $0.36 per share with revenue of $12.51 billion. Full year 2017 EPS guidance of $1.55-$1.65 was also in-line with the market’s expectations.

The hedge funds in our system collectively turned bullish towards the stock in Q3, with the number of funds owning it increasing to 71 from 63 and the value of their holdings also increasing by 39% to $3.78 billion. Citadel Advisors was the biggest buyer of Hewlett Packard Enterprise Co (NYSE:HPE) during the third quarter, closely followed by Daniel Och’s OZ Management. JANA Partners and Gotham Asset Management also grew more bullish on the stock, buying 2.7 million and 2.5 million shares respectively.

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