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.

Here are nine more compelling dividend stocks
Dividend stocks as a group handily outperform their non-dividend paying brethren. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers