This week, we’ve learned quite a bit about hedge fund manager John Paulson.
For one, we learned he loves pianos. That’s why Paulson & Co. bought venerable artisan piano-maker Steinway (LVB) earlier this week — marking the hedge fund’s first outright buyout.
We’ve also learned what stock stakes Paulson has thrown his money at. “Smart money” names from Warren Buffett to Bill Ackman all filed their 13Fs this week, and Paulson was no exception.
Let’s take a quick look at his investment activity in the most recent quarter:
|Cooper Tire & Rubber||CTB||5,000,000|
|William Lyons Homes||WLH||3,322,666|
William Lyons Homes (WLH), for one, has struggled this year as housing’s red-hot first-half run inevitably cooled off in recent months. Still, as InvestorPlace IPO expert Tom Taulli recently noted, the company’s fundamentals are strong.
The stake in Cooper Tire & Rubber (CTB) is especially interesting. As long as Paulson bought his 5 million shares before June 11 (remember, the quarter for this filing ended June 30), he made out like a bandit. CTB jumped around 41% that day after news broke that Apollo Tyres was buying out the company. The deal is under investigation right now, but that doesn’t affect the gains Paulson has likely already pocketed.
A similar story can be told for Smithfield Foods (SFD), which soared in late May after being acquired by Chinese company Shuanghui. Meanwhile, Paulson let go of food producer H.J. Heinz (HNZ), likely taking his profits after the company jumped on the Berkshire Hathaway (BRK.B) acquisition.
Here are other companies he exited last period:
Then, there was a pile of names he merely reduced his stake in. His new T-Mobile US (TMUS) holdings, for instance, came along at the same time he sold just about all of his Sprint Nextel (S) shares.
Meanwhile, on top of dropping WFC, several financials were pared back dramatically, including Hartford Financial Services (HIG) and all common shares of Capitol One (COF) — although he held onto some W shares.
|Hartford Financial Services||HIG||-45.5%|
|Ryman Hospitality Properties||RHP||-47.9%|
|SPDR Gold Shares||GLD||-53.1%|
|Capitol One Financial||COF||-100%*|
|* Common shares|
Finally, Paulson also upped a few positions. The biggest one: His firm dramatically increased its holding of Cobalt International Energy (CIE).
On top of that, it also more than doubled the number of shares it owned of small-cap biopharma name Shire (SHPG). Since the end of June — when this 13F was filed — the stock has already gained nearly 17%, which is more than four times the broader market.
Plus, Freeport-McMoRan Copper & Gold (FCX) has made a similar run in that time period, while Family Dollar (FDO) and Cablevision (CVC) are also handily beating the market of late.
|Cobalt International Energy||CIE||+1,743%|
|Freeport-McMoRan Copper & Gold||FCX||+72%|
|Family Dollar Stores||FDO||+49%|
All in all, Paulson seems to be making the right moves lately.
And yes, buying a piano-maker because you love pianos counts as one of them.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.