Billionaire John Paulson’s Top 10 Stock Picks

In this article, we featured billionaire John Paulson's top 10 stock picks. Click here to go ahead and see billionaire John Paulson's top 5 stock picks.
Investing guru billionaire John Paulson, who turned his hedge fund into a family office in 2020, has benefited from his bullish bets on gold and health stocks in 2020 after posting poor returns in recent years. The founder of New York-based hedge fund Paulson & Co is known for generating $ 20 billion in profits for betting against the financial collapse in 2008. Although Paulson won around $ 5 billion on a bet on gold in 2010, his strategy is to invest billions of dollars. Entering the gold markets had a negative impact on the portfolio over the past decade.
John Paulson founded Paulson & Co in 1994 and the hedge fund managed nearly $ 36 billion in assets at its peak. However, assets under management fell to $ 9 billion last year. The fund currently has nearly $ 10 billion in assets under management. The value of its 13F portfolio at the end of September was approximately $ 3.2 billion.
John Paulson aims to invest for the long term. The average time held for the top ten stocks is around 10 quarters. The health sector makes up 44% of the total portfolio, thanks to large holdings in Horizon Therapeutics and Bausch Health Companies. Investments in the materials sector make up 24% of the 13F portfolio, while the weighting in communications services is just over 9%. Paulson & Co has also diversified its portfolio into financial services, consumer discretionary and real estate.
John Paulson from Paulson & Co.
Paulson & Co is known for investing in merger arbitrage, event driven and distressed assets. Prior to Paulson & Co, the investing guru served as a merger and acquisition director for Bear Stearns. In 1980 he received a Masters of Business Administration from Harvard Business School.
While John Paulson's reputation remains intact, the same cannot be said for the entire hedge fund industry, as his reputation has been tarnished over the past decade, when his hedged returns failed to keep up with the market's unsecured returns on indices. On the flip side, Insider Monkeys Research was able to pre-identify a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 88 percentage points since March 2017 (see details here). We were also able to pre-identify a select group of hedge fund holdings that were significantly underperforming the market. We have been tracking and sharing the list of these stocks since February 2017, and they have lost 13% by November 16. You can subscribe to our free newsletter on our homepage to receive our articles in your inbox.
Let's check billionaire John Paulson's top 10 stock picks to see if any of the most famous hedge fund manager's long-term investments worked in 2020.
10. DISH Network Corporation (NASDAQ: DISH)
John Paulson's position in DISH Network Corporation (NASDAQ: DISH) underperformed in 2020 as the pay-TV service provider's stocks fell nearly 10% over the past twelve months. Unfortunately, DISH Network has lost nearly half of its value since John Paulson's hedge fund opened a position in Q1 2017.
The company is currently working on expanding its mobile communications offering. As a result, the company acquired wireless operator Boost Mobile and more than 9 million wireless retail customers in 2020. DISH seeks to innovate in the cellular market with the strategy of building the country's first cloud-native Open RAN-based 5G broadband network.
Other hand funds are also bullish on DISH Network as they were in 60 hedge fund portfolios as of the end of Q3 2020, compared to the all-time high of 58.
9. Discovery, Inc. (NASDAQ: DISCK)
Paulson's position in Discovery, Inc. (NASDAQ: DISCK) also underperformed over the past 12 months, despite a 27% rally last month. The company opened a position at Discovery in 2017, but Discovery's shares have tied by reach for the past three years.
The recent rally in Discovery stock is aided by the company's strategy to get into the streaming services business. Discovery launched its Discovery + streaming service this month with a library of more than 55,000 shows.
Andaz Private Investments, which achieved a return of 14.6% in the first nine months of 2020, presented Discovery positively in an investor letter. Andaz Private Investments stated the following:
“Discovery is extremely undervalued and has a free cash flow return of around 30%. The company also believes its stocks are extremely undervalued, and uses half of that free cash to buy back stocks. At a recent conference, they informed the market that they had successfully and significantly increased prices in their recent upfront (gathering of broadcasters and advertisers). This will most likely result in higher profits and cash flow in the medium term. Discovery continues to gain streak in the US and internationally. "
8. Viatris Inc. (NASDAQ: VTRS)
Viatris Inc. (NASDAQ: VTRS), the result of a merger between Mylan and Pfizers Upjohn, is the eighth largest stock in the Paulson portfolio. Paulson's hedge fund was Mylan's longtime shareholder prior to the merger agreement.
After a sharp rally in December, Viatris shares fell in 2021 on a conservative outlook and a longer-than-expected delay in the dividend announcement. Management expects unchanged sales for 2021 and described the year as a "low point". Management also announced that it would initiate dividends in the second half of 2021. The company had previously announced that it would initiate dividends after the full quarter following the completion of the merger.
7. AngloGold Ashanti Limited (NYSE: AU)
Shares in AngloGold Ashanti Limited (NYSE: AU) also underperformed over the past twelve months, despite a strong rally in the second and third quarters of 2020. The company opened a position in AngloGold in 2009 and currently accounts for 5.73% of total portfolio sales.
AngloGold Ashanti is one of the largest gold mining companies in the world and operates 14 mines and three projects in nine countries. The gold price has been under pressure in recent months after hitting an all-time high in July 2020. As a result, the AngloGold share price fell nearly 30% over the past six months. Even so, the company believes it will be able to offer high dividends to shareholders.
6. Takeda Pharmaceutical Company Limited (NYSE: TAK)
Takeda Pharmaceutical Company Limited (NYSE: TAK) stocks are down 12% over the past twelve months. Paulson & Co has held a stake in Takeda since the first quarter of 2019. It is the sixth largest stock in Paulson's 13F portfolio, accounting for 6.28% of the portfolio.
Despite the sluggish stock performance, the company offers a dividend yield of nearly 5%. Additionally, sales are expected to reach $ 50 billion in 2030, a 50% increase over 2019 sales. The company expects its Wave 1 pipeline, which includes 12 new molecules slated to launch in fiscal 2024, will help generate most of its sales in the years to come.
The company is currently working on an asset disposal program to streamline its businesses in line with future growth strategies. Takeda exceeded its non-core disposal target of $ 10 billion in the first half of 2020. The company plans to use the proceeds to reduce debt and invest in growth opportunities.
Click here to read on and see billionaire John Paulson's top 5 stick picks.
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Disclosure: No position. Billionaire John Paulson's Top 10 Stock Picks was originally published on Insider Monkey. Follow Insider Monkey on Twitter.
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