We recently published a list of Billionaire Paul Singer's Top 12 Long-Term Stock Picks. In this article, we are going to take a look at where Western Digital Corporation (NASDAQ:WDC) stands against other Billionaire Paul Singer's long-term stock picks.
The world's "most feared investor," Paul Singer, needs no introduction. He has built a reputation on Wall Street for his aggressive and litigious tactics that often generate significant shareholder value. While the 79-year-old billionaire investor is not as flashy or public as other activist investors, he has built a reputation for exploiting weaknesses in various asset classes.
Singer's initial approach to investing was to target companies and even governments while purchasing extremely distressed debt. Therefore, he is best known as a "vulture capitalist" as a result of this tactic. Since then, he has diversified into a number of investment strategies, such as activist investing, portfolio management, and commodity trading.
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Elliott Management is the investment firm that Singer founded in 1977 with $1.3 million. It has grown to become one of the most successful and feared activist hedge funds, with about $19 billion in portfolio value. The firm serves as the management affiliate for hedge funds Elliott Associates L.P and Elliott International Limited. The firm boasts of an annual average return of 14% since inception. Likewise, it has only lost money in the two years since its inception.
Elliott Associates is one of the most tracked hedge funds and it employs an activist investment strategy. It also acquires significant though minority stakes in underperforming and distressed companies or assets with a view of unlocking long-term value. In addition, the firm strives to influence company management through strategic initiatives such as cost cuts, management changes and business sales to maximize shareholder value.
Singer's investment firm also purchased distressed sovereign debt from nations like Argentina and Peru in the 1990s. The investments resulted in multi-million dollar repayments following years of legal disputes. In 2016 Singer received a $2.4 billion payout after warring with Argentina's government over bond payments. A 2018 article in The New Yorker magazine called him a "doomsday investor" for his strategies, including corporate debt plays in companies.
Paul Singer's investment record speaks for itself. His hedge fund, Elliott Management, returned 5.9% in 2022 as the S&P 500 went down 19%. Nevertheless, the firm underperformed in 2023, turning 4.3% compared to a 24% gain for the S&P 500. The underperformance came as Singer remained cautious amid concerns that The US economy was staring at an "extraordinarily dangerous and confusing period".