Why Dan Loeb Is Betting on Dover
Dan Loeb’s new position in Dover
On Friday, October 20, 2017, billionaire investor Dan Loeb shared that his firm, Third Point, took a new position in Dover (DOV) in 3Q17. After the announcement of his position in this stock, the stock price jumped nearly 6%.
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Dan Loeb wrote in an investor letter, “during the third quarter, we invested in Dover, an industrial conglomerate with a $15 billion market capitalization. Dover has leading share in several highly consolidated end markets, including retail fueling, industrial printing, retail refrigeration equipment, and artificial lift for U.S. onshore energy production.”
Fiscal stimulus and infrastructure and defense spending (SPY) (QQQ) (IWM) would be a great help for this industrial goods company. The stock has returned nearly 23.3% on a year-to-date basis as of October 24, 2017. The Industrial Select Sector SPDR ETF (XLI), which tracks the performance of the industrial sector, rose 14.7% during the same period. On October 25, 2017, Dover was trading at a trailing price-to-earnings multiple of 22.2x, while the industrial sector was at 28.2x.
In the next part of this series, we’ll analyze Third Point’s largest holdings.