2 Stocks David Rolfe and Daniel Loeb see eye to eye


  • Loeb and Rolfe both hold positions at UnitedHealth and Disney in the three months ended June 30.
  • They both sold shares of one stock, while buying the other.

Even though gurus Daniel Loeb (Trades, Portfolio), leader of Third Point, and David Rolfe (Trades, Portfolio), head of Wedgewood Partners, have different investment strategies, they still have a few things in common.

Taking an event-driven, value-driven approach to stock picking, Loeb’s New York-based company is known for taking activist positions in underperforming companies with a catalyst that will help unlock shareholder value. .

By contrast, St. Louis-based Rolfe’s firm approaches potential investments with the mindset of a business owner, striving to generate significant long-term wealth by analyzing a handful of… ‘undervalued companies that have a dominant product or service, consistent profits, revenue and dividends. growth, are highly profitable and have strong management teams.

According to GuruFocus’ aggregate portfolio, a Premium feature based on 13F repositories, the two gurus both hold positions within the UnitedHealth Group.
Inc. (UNH, Financial) and The Walt Disney
Co. (DIS, Financial) at the end of the second quarter.

Investors should be aware that 13F filings do not provide a complete picture of a company’s holdings as the reports only include its positions in US stocks and US certificates of deposit, but they can still provide valuable insight. Additionally, reports only reflect trades and holdings as of the most recent portfolio deposit date, which may or may not be held by the reporting company today or even when this article was published.

UnitedHealth Group

In the three months ended June 30, Loeb reduced its investment in UnitedHealth (UNH, Financial) by 5.79%, while Rolfe reduced its stake by 1.15%. They have a combined equity portfolio weighting of 12.47% in the stock.

The Minnetonka, Minnesota-based company, which provides healthcare plans and services, has a market capitalization of $488.08 billion; its shares were trading around $521.42 on Friday with a price-to-earnings ratio of 27.26, a price-to-book ratio of 6.69 and a price-to-sales ratio of 1.64.

The GF value line
suggests that the stock is currently slightly undervalued based on historical ratios, past financial performance and analysts’ future earnings projections.

The company has high outperformance potential with a GF score of 90 out of 100. It scored high points for profitability, growth and financial strength, medium scores for momentum and low points for GF value.

GuruFocus rated UnitedHealth’s financial strength at 7 out of 10. Although the company has issued new long-term debt over the past three years, it is at a manageable level due to adequate interest coverage. The Altman Z-Score of 4.04 also indicates that he is in good standing, even though assets are accumulating at a faster rate than revenue growth. Moreover, value is created as the business grows since the return on invested capital eclipses the weighted average cost of capital.

The company’s profitability scored 9 out of 10 thanks to an expanding operating margin, strong returns on equity, assets and capital that outperform the majority of competitors and a Piotroski F-Score high of 8 out of 9, meaning the conditions are healthy. Due to recording consistent growth in profits and revenue, UnitedHealth has a Perfect Predictability rating of five out of five stars. According to research by GuruFocus, companies in this ranking have an average return of 12.1% per year over a 10-year period.

GuruFocus estimates that Loeb has earned 27.88% on the investment he has held since Q4 2020. Rolfe has generated a return of 22.15% since establishing the position in Q3 2021.

Gurus holding large positions in the stock include Vanguard Health Care Fund (Trades, Portfolio), Dodge & Cox, Ruane Cunniff (Trades, Portfolio), Barrow, Hanley, Mewhinney & Strauss, Jeremy Grantham (Trades, Portfolio) and Spiros Segalas (Professions, Portfolio), among others.


Loeb entered a 1 million share stake in Disney (DIS, Financial) during the quarter, while Rolfe strengthened his position by 16.46% to 2,300 shares. Together, they have a combined equity portfolio weighting of 2.27% in the stock.

The Burbank, Calif.-headquartered media and entertainment giant, which is known for its classic movies and theme parks, has a market capitalization of $194.82 billion; its shares were trading around $108.47 on Friday with a price-to-earnings ratio of 62.12, a price-to-book ratio of 2.06 and a price-to-sales ratio of 2.42.

According to the GF Value Line, the stock is currently significantly undervalued.

The GF score of 77 out of 100 indicates that the company is likely to have average performance in the future. While Disney received high ratings for profitability and GF value and moderate rankings for financial strength and momentum, its growth rating was low.

Disney’s financial strength was rated 5 out of 10 by GuruFocus. In addition to insufficient interest coverage, the low Altman Z-Score of 2.04 warns that the company is under pressure. WACC also eclipses ROIC, so it struggles to create value.

The company’s profitability was rated 8 out of 10. Although margins are shrinking and returns are lower than more than half of its industry peers, Disney has a high Piotroski F-Score of 8. Despite declining earnings per share in recent years, it has a one-star predictability rating. GuruFocus found companies with this rank yield, on average, 1.1% per year.

Data from GuruFocus shows that Loeb has gained around 26.07% on the investment so far, while Rolfe has lost around 22.68% on his stake since inception in the first quarter.

Other gurus with prominent positions at Disney include PRIMECAP Management (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), T Rowe Price Equity Income Fund (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio), Yacktman Asset Management (Trades, Portfolio), Bill Nygren (Trades, Portfolio) and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.

Composition of the portfolio

Loeb’s $4.22 billion equity portfolio, consisting of 58 stocks in the quarter ended June 30, is primarily invested in healthcare, energy and utilities.

Rolfe’s $579 million equity portfolio, comprised of 40 stocks, is primarily invested in the technology, financial services and communication services sectors.

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