Billionaire John Paulson Has Been Buying Vodafone, Whiting Petroleum, and Digital Realty

Does this 6% dividend yield interest you?

Mar 7, 2014 at 12:52PM

The latest 13F season is commencing, when many money managers issue required reports on their holdings. It can be worthwhile to pay attention, as you might get an investment idea or two by seeing what some major investors have been buying and selling.

For example, consider Paulson & Co., founded in 1994 by investing giant John Paulson. Owned by its employees, the company has specialized in merger arbitrage, among other things, profiting when one company buys or merges with another (or merely announces plans to do so). It has grown into one of the largest hedge-fund companies in the world.

Paulson's latest 13F report shows that it boosted its positions in Whiting Petroleum Corporation (NYSE:WLL) and Vodafone Group (NASDAQ:VOD) significantly, while establishing a new position in Digital Realty Trust (NYSE:DLR).

Whiting Petroleum has been enjoying robust growth, thanks to operations in the Bakken region, and bulls see great potential in its Colorado Niobrara acres -- where its CEO reports a 400% internal rate of return on each drilled well. Its fourth quarter featured a loss due in part to rising costs, but it still met expectations. Year-over-year production grew by double digits, and proved reserves grew by 16%. Whiting expects production growth of 17% to 19% in the coming year. Analysts at RW Baird and the KLR Group boosted their opinions of the stock in February. It's Paulson's ninth-largest holding as of the 13F filing.

Vodafone Group has had an eventful past year, with shareholders approving the sale of its remaining stake in Verizon Wireless to Verizon for $130 billion. Among other things, that bolsters Vodafone's dividend, which is yielding 2.4%. The U.K.-based telecom titan is poised to profit from Europe's rebounding economy, and it's making further investments in Europe and other locations, such as India. Still, bears worry about threats such as the WhatsApp mobile device that permits people to communicate over the Internet for free. (Facebook just bought WhatsApp for an eye-popping $19 billion, making clear how much growth potential some see in it.) Vodafone's shrinking cash flow is another concern. The company is Paulson's second-largest holding, as of the 13F filing.

Digital Realty Trust, yielding a hefty 6%, invests in and operates data centers and is geographically diversified, too, with properties in the U.S., Europe, and Asia. Digital Realty Trust's fourth quarter featured operating revenue jumping 9% over year-ago levels and net income per share surging 43% between 2013 and 2014, with management noting "record leasing results for the fourth quarter and full-year 2013 driven by strong sales execution and large customer requirements to deploy cloud infrastructure and applications." Bears worry whether growth in supply will outpace demand growth in the industry, while bulls are happy about the company's ambitious stock buyback plans. They total up to $500 million, which is significant for a $7 billion company.

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Selena Maranjianwhom you can follow on Twitter, owns shares of Verizon Communications. The Motley Fool recommends Facebook and Vodafone. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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