Third Point posted a 2.7 percent gain in October and is now up 18.4 percent for the year, according to the hedge fund firm’s October monthly report, seen by Institutional Investor.
This compares with a 0.9 percent loss for the S&P 500 last month and a 21 percent increase year-to-date. Third Point is approaching its best results since 2021, when it was up 23.9 percent. Virtually all of the firm’s October results were thanks to the equity book’s fundamental and event-driven segment, according to the report.
The three top performers for the month were semiconductor maker Taiwan Semiconductor Manufacturing, LPL Financial Holdings, and Siemens Energy. The biggest detractors were life sciences company Danaher Corp., Bath & Body Works, and Microsoft.
The fundamental and event-driven strategy accounted for most of the full-year gains, although credit kicked in 2.8 percent and private companies 2.5 percent.
The biggest winner for the first ten months of the year is an undisclosed private position. It is followed by energy company Vistra Corp., whose stock is up 220 percent in 2024 — significantly better than Nvidia. Rounding out the top five are Meta Platforms, TSMC, and Pacific Gas & Electric. The biggest detractor from performance this year is Bath & Body Works.
Third Point recently sold another round of four million shares of Bath & Body Works, cutting its stake to eight million shares, or 3.65 percent of the total outstanding. Altogether this year, Third Point has shed nearly six million shares of the company. As a result, the hedge fund dropped from being the third-largest shareholder to the seventh-largest. The stock also fell from being Third Point’s sixth-largest U.S. common stock long position to 12th. Last year, Third Point had threatened to launch a proxy fight with the company.
Third Point’s other significant detractors this year are Advance Auto Parts, an undisclosed short position, Swiss commodities trading and mining company Glencore, and DuPont.
Heading into November, Third Point’s net long exposure in the equity book remained at about 75 percent. The five largest long positions were PG&E, Amazon, TSMC, Danaher, and UBS. UBS replaces Covestro, a producer of polyurethane and polycarbonate raw materials, among the top five. The stock was the fourth-largest long at the end of September.
Third Point established its position in UBS in the first quarter of 2023 before the bank completed its large acquisition of then-troubled Credit Suisse. “We see the rescue of CS as a transformative deal for UBS at a highly compelling price and with downside protected terms,” Loeb told clients in his first-quarter 2023 client letter.