In his latest Q4 2022 Letter, Dan Loeb recommends investing in companies that have found ‘religion’. Here’s an excerpt from the letter:
While these results were lackluster, we used market weakness to bring up our exposures, initiate several new positions, and add to others that traded to attractive levels.
Notwithstanding the recent rally in risk assets, which we view as a technical phenomenon, the current environment seems favorable for an investment approach that focuses on companies trading at attractive valuations with catalysts to realize full value.
These include companies undergoing radical transformation because of outside engagement or those having found “religion”. We are looking for companies making significant share repurchases, planning to unlock value via a spin-off, or improving a muddied narrative after being born out of bankruptcy.
If these strategies seem familiar, it is because this style of event-driven investing is our core competency and the foundation upon which our firm was built. Credit remains a mainstay of the portfolio, and both our asset-backed and corporate credit strategies will benefit in the environment we see ahead.
You can read the entire letter here:
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