HomeBusinessInvesting3 Stocks David Rolfe And Daniel Loeb See Value In

3 Stocks David Rolfe And Daniel Loeb See Value In


  • The investors both have positions in UnitedHealth, Alphabet
    and Microsoft

Although 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 couple holdings in common.

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

In contrast, Rolfe’s St. Louis-based 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 earnings, revenue and dividend growth, are highly profitable and have strong management teams.

According to GuruFocus’ Aggregated Portfolio, a Premium feature based on 13F filings, the two gurus both had positions in UnitedHealth Group
Inc. (UNH, Financial), Alphabet Inc. (GOOGL, Financial) and Microsoft Corp. (MSFT, Financial) as of the end of the first quarter.

Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.

UnitedHealth Group

During the three months ended March 31, Loeb curbed his investment in UnitedHealth Group (UNH, Financial) by 50%, while Rolfe boosted his holding by 24.09%. They have a combined equity portfolio weight of 8.62% in the stock.

The Minnetonka, Minnesota-based company, which provides health care plans and services, has a $476.46 billion market cap; its shares were trading around $512.40 on Tuesday with a price-earnings ratio of 22.90, a price-book ratio of 5.45 and a price-sales ratio of 1.40.

The GF Value Line
suggests the stock is fairly valued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.

At 95 out of 100, the GF Score indicates the company has high outperformance potential. While it received high ratings for profitability, growth and financial strength, the value and momentum ranks are more moderate.

The company also has a predictability rank of five out of five stars. According to GuruFocus research, companies with this rank return an average of 12.10% annually over a 10-year period.

GuruFocus estimates Loeb has gained 21.07% on the investment, which he has had since the fourth quarter of 2020. Rolfe has yielded a 16.96% return since establishing the position in the third quarter of 2021.

Gurus with significant positions in the stock include the Vanguard Health Care Fund (Trades, Portfolio), Dodge & Cox, Andreas Halvorsen (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Jeremy Grantham (Trades, Portfolio) and Ruane Cunniff (Trades, Portfolio).


Loeb entered a 4.75 million-share stake in Alphabet (GOOGL, Financial) during the quarter, while Rolfe boosted his position by 11.89% to 355,124 Class A shares. Together, they have a combined equity portfolio weight of 14.31% in the stock.

The communications services company headquartered in Mountain View, California, which owns the Google
search engine, YouTube and a number of other businesses, has a market cap of $1.56 trillion; its Class A shares were trading around $122.39 on Tuesday with a price-earnings ratio of 27.26, a price-book ratio of 5.97 and a price-sales ratio of 5.57.

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

The GF Score of 100 implies the company has high outperformance potential on the back of solid ratings for financial strength, profitability, growth, value and momentum.

Alphabet also has a 4.5-star predictability rank. GuruFocus data shows companies with this rank return, on average, 10.60% annually.

GuruFocus says Loeb has gained an estimated 23.10% on the investment so far, while Rolfe has seen a return of approximately 88.38% on his long-held position.

Other gurus with large positions in Alphabet’s Class A stock include Ken Fisher (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Dodge & Cox, Chase Coleman (Trades, Portfolio), the Harbor Capital Appreciation Fund (Trades, Portfolio), Bill Nygren (Trades, Portfolio), Philippe Laffont (Trades, Portfolio) and Hotchkis & Wiley.


Loeb trimmed his Microsoft stake by 11.02% during the quarter, while Rolfe shaved off 11.21%. The gurus have a combined equity portfolio weight of 10.75% in the stock.

The Redmond, Washington-based software company, which is known for its Windows operating system and Office suite of products, has a $2.61 trillion market cap; its shares traded around $350.98 on Tuesday with a price-earnings ratio of 38.03, a price-book ratio of 13.41 and a price-sales ratio of 12.62.

Based on the GF Value Line, the stock appears to be fairly valued currently.

The GF Score of 95 means the company has high outperformance potential, driven by strong ratings for three of the criteria as well as more moderate momentum and value ranks.

Microsoft also has a 3.5-star predictability rank. GuruFocus found companies with this rank return an average of 9.3% annually.

Over its lifetime, GuruFocus data shows Rolfe has gained around 62.31% on his investment, while Loeb has recorded a return of 25.70%.

With a 0.53% stake, Bill Gates (Trades, Portfolio)’ foundation trust is Microsoft’s largest guru shareholder. Other top guru investors include Fisher, Dodge & Cox, PRIMECAP, Coleman, Harbor Capital, Baillie Gifford (Trades, Portfolio) and Al Gore (Trades, Portfolio)’s Generation Investment.

Portfolio composition

Loeb’s $6.11 billion equity portfolio, which was composed of 46 stocks as of the three months ended March 31, is most heavily invested in the health care, utilities, consumer defensive and technology spaces.

Rolfe’s $590 million equity portfolio, which is composed of 37 stocks, is most heavily invested in the technology, financial services and consumer cyclical sectors.


I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

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