By Matt Hogan

Paul Singer and Elliott Management released its quarterly 13F filing with the SEC on February 14th which highlighted a number of stocks that the firm’s buying and selling.

With seven positions making up more than half of its $16 billion portfolio, I take a closer look at the firm’s listed holdings below.

How Paul Singer Unlocks Value

Singer started out in convertible arbitrage but is now better known for investing in distressed debt. When it comes to investing in companies he is an activist investor and likes to restructure companies if he believes value can be unlocked. He is not afraid to use litigation to support his strategy. Singer has a history of buying stakes in companies and then forcing a takeover by another company – at a higher price.

The following examples illustrate the methods Elliot uses to generate returns:

Singer bought 8% of Compuware in 2012, before making a bid to buy the entire company. Although he didn’t ultimately buy the company, he managed to restructure it and bid the share price up in the process.

At Alcoa, Elliot bought a large enough stake to secure three board seats. It then forced a restructuring and break up of part of the business. By the time Elliot sold its stake the fund had netted a 104% return.

In the case of Mentor Graphics Corp, Elliot bought a 9% stake before pushing for a takeover by Siemens. Elliot netted 68% in the process.

When Akzo Nobel NV rejected a takeover bid from PPG Industries Inc, Elliot sued the company to try to oust its chairman. Eventually, Elliot agreed to a partial restructuring before selling its stake.

Elliot is currently trying to stop a takeover of NXP Semiconductors by Qualcomm. They wanted Qualcomm to pay more for the company, or for NXP to find a better offer elsewhere.

These examples illustrate how Paul Singer treats each investment as a campaign. The goal of each campaign is to influence events to increase the value of his stake. He doesn’t win every time, but he wins often enough to keep his shareholders very happy.

Elliott Management’s Latest Form 13F Filing

On February 14th, Paul Singer’s firm Elliott Management filed its quarterly Form 13F regulatory filing. I reviewed the filing to gain a glimpse into the firm’s large portfolio.

Elliott Management’s stock portfolio totals $16.0 billion according to the latest filing. The list value of stock holdings is down -5.8% when compared to the last quarter. As a benchmark, the S&P 500 was up 6.1% over the same period.

Quarter-over-Quarter Turnover (QoQ Turnover) measures the level of trading activity in a portfolio. Elliott Management’s QoQ Turnover for the latest quarter was 23.9%, so the firm appears to trade a significant percent of its portfolio each quarter.

Elliot Mangement’s Largest Holdings

The Ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed below at the Elliott Management page. The following table summarizes the firm’s largest holdings reported in the last filing:

Ticker Name Holding ($mil) % Of Portfolio
QQQ POWERSHARES QQQ TRUST $2,302.8 14.5%
NXPI NXP SEMICONDUCTORS N V $1,924.7 12.1%
ARNC-W ARCONIC INC $1,392.5 8.8%
HES HESS CORP $1,016.8 6.4%
BTU PEABODY ENERGY CORP NEW $834.4 5.3%
XOP SPDR SERIES TRUST $719.1 4.5%
CTXS CITRIX SYS INC $624.0 3.9%

The seven positions above represent 55.5% of the fund’s total portfolio. PowerShares QQQ Trust, Series 1 (ETF) (Nasdaq: QQQ) is the largest position held by Elliot Management. It is an exchange-traded fund based on the Nasdaq-100 Index. The index includes 100 of the largest nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization.

Elliott Management’s 7 Largest Purchases

I also used finbox.io to find Elliott Management’s largest buys last quarter. Here’s the list of the biggest stock purchases determined by comparing the last two filings:

Ticker Name Purchased ($mil) % Of Portfolio
QQQ POWERSHARES QQQ TRUST $559.3 14.5%
IWM ISHARES TR $551.1 3.5%
MD MEDNAX INC $132.3 0.8%
AKAM AKAMAI TECHNOLOGIES INC $130.1 0.8%
UNIT UNITI GROUP INC $122.3 0.8%
CVG CONVERGYS CORP $106.2 0.7%
QEP QEP RES INC $100.5 0.6%

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