John Paulson's Top 5 Buys of 3rd Quarter

GuruFocus.com
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- By Holly LaFon

John Paulson (Trades, Portfolio), whose next move may be a tax-saving physical relocation, disclosed Wednesday that he added nine positions to John Paulson (Trades, Portfolio) & Co.'s portfolios in the third quarter.


Paulson held 58 long positions valued around $5.34 billion at the end of the quarter, filings show. The five largest he added during the period were: CA Inc. (CA), Dell-VMWare Tracking Stock (DVMT), Nielsen Holdings PLC (NLSN), Dun & Bradstreet Corp. (DNB) and Pandora Media Inc. (NYSE:P).

Paulson also retained his stake in the SPDR Gold Trust (GLD), which runs to 9.12% of his holdings. Moreover, he maintained his positions in basic materials stocks, which mostly encompass gold miners and account for 6% of holdings.

Paulson has long-running penchant for gold, but his dissatisfaction with his returns in the sector led him in September to team with other gold investors to form the Shareholders Gold Council with the aim to influence management of gold companies. The birth of the group came a year after Paulson & Co. partner Marcelo Kim's presentation at the Denver Gold Forum that called for changes in the operations of gold miners.

Paulson's wealth and prominence skyrocketed when he made almost $4 billion in the financial crisis, primarily by buying credit default swaps as the subprime mortgage market failed. In more recent years, the firm he founded in 1994 has struggled. Bloomberg has reported that assets under management declined to around $9 billion from their peak of $38 billion in 2011.

The New York-based billionaire may make another financially driven decision soon. According to several outlets, he wants to move to Puerto Rico, where relocating U.S. citizens can avoid federal taxes on certain passive investment income.

Largest new buys

CA Inc. (CA)

Paulson purchased 5.45 million shares of CA Inc., giving it 4.5% of the portfolio. The stock's third-quarter price averaged $43 per share.

CA Inc. has a market cap of $18.59 billion; its shares were traded around $44.44 with a P/E ratio of 45.81 and P/S ratio of 4.60. The trailing 12-month dividend yield of CA Inc. is 2.30%. The forward dividend yield of CA Inc. is 2.30%. CA Inc. had an annual average earnings growth of 3.50% over the past 10 years.

Dell-VMWare Tracking Stock

Paulson purchased 1.95 million shares of the company, giving it 3.55% of the portfolio. The stock's third-quarter price averaged $95.

Dell-VMWare Tracking Stock has a market cap of $20.94 billion; its shares were traded around $105.05 Thursday with a price-earnings ratio of 26.86 and price-sales ratio of 2.50.

Nielsen Holdings PLC

Paulson purchased 3.5 million shares of the company, giving it 1.81% portfolio weight. The stock's third-quarter share price averaged $27.

Nielsen Holdings PLC has a market cap of $9.16 billion; its shares were traded around $25.79 on Thursday with a price-earnings ratio of 28.99 and price-sales ratio of 1.39. The trailing 12-month dividend yield of Nielsen Holdings PLC is 5.35%. The forward dividend yield of Nielsen Holdings PLC is 5.39%. Nielsen Holdings PLC had an annual average earnings growth of 9.40% over the past five years.

Dun & Bradstreet Corp.

Paulson purchased 420,000 shares of the company, giving it 1.12% portfolio weight. The stock's third-quarter share price averaged $136.

Dun & Bradstreet Corp. has a market cap of $5.28 billion; its shares were traded around $142.25 on Thursday with a price-earnings ratio of 22.73 and price-sales ratio of 2.94. The trailing 12-month dividend yield of Dun & Bradstreet Corp. is 1.46%. The forward dividend yield of Dun & Bradstreet Corp. is 1.47%. Dun & Bradstreet Corp. had an annual average earnings growth of 2% over the past 10 years.

Pandora Media Inc.

Paulson purchased 4,066,600 shares of the company, giving it 0.72% portfolio weight. The stock's third-quarter share price averaged $8.

Pandora Media Inc. has a market cap of $2.43 billion; its shares were traded around $9.01 on Thursday with a price-sales ratio of 1.54.

See John Paulson (Trades, Portfolio)'s portfolio here.

Read more here:

4 Stocks John Paulson and Paul Tudor Jones Agree On

5 Undervalued Stocks With Positive Earnings Estimates

John Paulson Adds 7 New Stocks to Portfolio
This article first appeared on GuruFocus.


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