How Mets owner Steve Cohen ‘plays defense’ during stock market slump

How Mets owner Steve Cohen ‘plays defense’ during stock market slump

Mets owner Steve Cohen has adopted a defensive stock-picking strategy that’s plowing into safe havens including oil and casino properties as he looks to hedge against the slumping market, according to a report.

The 65-year-old hedge-fund magnate, who has an estimated net worth of $11.9 billion, has recently been focusing on so-called high-yield stocks, which are equities whose dividend yield is higher than the yield of any benchmark average, such as the US Treasury’s 10-year note.

Such stocks tend to outperform low-yield and no-yield securities during bear markets because investors consider them to be less risky.

On the face of it, it looks like a departure for Cohen, who as the head of the Point72 Asset Management has earned a reputation for making big, risky bets on volatile stocks.

During the first quarter of this year, Cohen’s fund bought up 633,800 shares of VICI Properties, a New York-based real estate investment trust, or REIT, that specializes in casinos, hotels, and racetracks, according to securities filings.

Cohen is the owner of the Point72 Asset Management hedge fund.
Cohen is the owner of the Point72 Asset Management hedge fund.
Sipa USA via AP

VICI was created in 2017 as part of a spin-off from Caesars Entertainment after that company went into an $18 billion bankruptcy. VICI owns 10 resorts on the Las Vegas Strip encompassing 1.2 million square feet of casino space, more than 40,000 hotel rooms, and 6 million square feet of convention space.

In total, VICI’s portfolio includes 43 casinos; 450 restaurants, bars, and clubs; and four major golf courses. In April, VICI announced that it completed a $17.2 billion acquisition of MGM Growth Properties.

Shares of VICI Properties rose by nearly 2% as of 3 p.m. on Thursday. At almost $30 a share, Cohen’s stake in VICI amounts to some $18 million, according to the finance site TipRanks.

Cohen has upped his investments in high-yield dividend stocks.
Cohen has upped his investments in high-yield dividend stocks.
AFP via Getty Images

Cohen is also betting on BP, the world’s largest oil and gas producer whose market capitalization has been valued at $104 billion.

The Mets boss bought an additional 3,276,969 shares of BP. Cohen had already bought half a million shares of the company before his latest investment — bringing the value of his stake in the company to some $122 million.

Shares of BP rose around 1% on Wednesday. BP stock was trading at around $32.40 per share as of 3 p.m. on Wednesday.

Like most energy companies, BP posted impressive profits despite divesting from a 20% stake in the Russian firm Rosneft in the wake of President Vladimir Putin’s invasion of Ukraine.

In the first quarter of this year, BP reported a net profit of more than $6 billion — easily beating analyst estimates of $4.1 billion.

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