5 High-Flying Stocks In Dan Loeb’s Portfolio: Cinemark, Corpay, Amazon Lead – Bath & Body Works (NYSE:BBWI), Amazon.com (NASDAQ:AMZN)

Few hedge fund managers command the attention of Wall Street quite like Dan S. Loeb. As the founder of Third Point, a $7 billion hedge fund, Loeb has made his mark with bold activist strategies that challenge the status quo and drive transformation in global companies.

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Portfolio Overview

As of Q3 2024, Third Point’s portfolio is valued at $7.37 billion, comprising 41 investments. The fund gained 5.3% during the quarter, with top holdings including Pacific Gas & Electric Co. PCG at 13%, Amazon.com, Inc. AMZN at 9.3%, and Danaher Corporation DHR at 7.3%. Smaller positions include Vistra Corp. VST and Bath & Body Works, Inc. BBWI, each at 5.1%.

Best Performers: These five stocks have surged over 20% in the last 6 months.

1. Live Nation Entertainment, Inc. LYV escalated around 43%.
2. Amazon surged about 18%
3. Meta Platforms, Inc. META rose roughly 17%
4. Corpay, Inc. CPAY rocketed about 29%
5. Cinemark Holdings Inc CNK increased approximately 60%

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These gains highlight Loeb’s ability to capitalize on growth opportunities across the entertainment, tech, and financial sectors.

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Investment Strategy:

• Loeb is a prominent activist investor who acquires significant stakes in underperforming companies to advocate for improvements in management, operations, or governance, with the goal of enhancing shareholder value. A key example is his 2011 investment in Yahoo, where a 5% stake and strategic push led to transformations and over $1 billion in gains, according to Hedge Fund Alpha.
• Throughout his career, Loeb has focused more on creating spin-offs than investing in existing ones. He recently applied his activist strategy with Sony and Shell to pursue spin-offs, according to CNBC, but was unsuccessful in these efforts.
• Beyond equities, Loeb explores opportunities in credit markets, including distressed debt and corporate bonds, aiming to generate high-risk-adjusted returns by exploiting inefficiencies in those areas. In 2012, Loeb invested in Greek sovereign bonds during the financial crisis, assessing the risk-reward ratio and achieving strong returns, adding to an already successful year, CNBC reported.

Historical Performance: Since launching in 1995, the fund has averaged annual returns of 16%, attracting new investors with consistent positive performance, according to Hedge Fund Alpha.

Loeb’s major successes came during the dot-com bubble and the 2008 financial crisis, with his fund posting a 45% return in 2009 despite a market downturn.

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Third Point’s assets under management reportedly peaked at nearly $18 billion in 2022 before declining to approximately $7 billion, attributed to underperformance during a challenging market period in 2022. By the end of 2023, the fund achieved modest positive returns, indicating some stabilization.

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Image created using artificial intelligence via Midjourney.