Special Situations will focus on investing ideas of the road less travelled. Topics may include companies with logical takeover targets, ones affected by pending legislation and or regulatory action and oversold stocks due to investors circumstantial reactions. A good example of this was the plunge of airline stocks last summer fueled by fears of the spread of Ebola. A possible threat hyped by the media but never came to fruition.
Source: Flickr via user flazingo.
The healthcare sector is going through an unprecedented period of consolidation lately due to a multitude of factors, including the Affordable Care Act, the patent cliff, the advent of several ground-breaking new classes of drugs, and the retirement of the so-called "baby boomers" that has ratcheted up demand for nearly all forms of medical services.
Investors fortunate enough to be holding shares in companies that been on the buyout side of the M&A ledger have been making out like bandits for the most part. As such, there's a healthy interest in the investment community regarding which healthcare companies -- especially in the high-flying biotech industry -- might be the next buyout target. To shed some light on the matter, we asked three of our healthcare contributors to chime in with their thoughts. Here is what they had to say:
by The Motley Crew, trove.com
Paul Singer’s Elliott Associates has filed a 13G with the U.S. Securities and Exchange Commission, reporting ownership of 8.66 million shares of Mitel Networks Corporation (NASDAQ:MITL), which marks an increase of 4.77 million shares from the fund’s previous position revealed in the 13F filing for the second quarter. In this way, Elliott currently owns 6.7% of the high-tech company’s outstanding stock.
Elliott Associates is a New York-based hedge fund founded by Paul Singer in 1977, which makes it one of the oldest hedge funds under continuous management. Elliott Associates, in consort with hedge fund Elliot International, forms the well-known Elliott Management Corporation, which oversees more than $23 billion in assets under management. Elliott Associates employs an activist investing approach, usually acquiring stakes in distressed or undervalued companies and pushing for changes so as to unlock shareholder value. As stated by the fund’s most recent 13F filing, Elliott Associates manages a public equity portfolio with a market value of $7.13 billion as of June 30.
By GENE GUZUN in Hedge Funds News
Selected articles and analyst reports on less covered topics to include companies with logical takeover targets in special situations space. Click here to register and get Free Investment Reports.
Michael Hintze’s CQS Cayman LP has filed its 13F with the SEC for the period of June 30. Hintze established the investment advisory firm in 1999 and the firm employs a fundamental bottom-up approach to choosing investments. According to the 13F filing, the investment manager has a public equity portfolio worth $1.66 billion, indicating a decline of 22.13% in overall portfolio value compared to the prior reporting period. CQS Cayman is most heavily invested in the consumer discretionary (which includes travel), information technology, and healthcare sectors. Its top ten equity investments account for 44.81% of the overall portfolio value. We decided to find out the latest investment positions of Michael Hintze as of the end of the second quarter and found that the investment advisory firm has placed significant bets on the travel industry, with major positions in JetBlue Airways Corporation (NASDAQ:JBLU), Carnival Corp (NYSE:CCL), and Ryanair Holdings plc (ADR) (NASDAQ:RYAAY). We’ll take a look at these investments below.
by Prakash Pandey, insidermonkey.com
When Sprout Pharmaceuticals received FDA approval for its flibanserin drug earlier this week, it was really just a matter of time before the company either held a public offering of stock or was acquired. Today it looks like acquisition is the choice.
The Wall Street Journal reported Thursday morning that Canada-based Valeant Pharmaceuticals International Inc. (NYSE: VRX) is preparing to pay $1 billion for the closely held Sprout. An unnamed source told the Wall Street Journal that Valeant’s offer would pay all cash in two payments, the first $500 million this year and a second $500 million next year. Sprout said in its press release on Tuesday that its flibanserin drug will be available by prescription on October 17 under the brand name Addyi.
Valeant lost out last year on its bid for Allergan when Actavis offered pay $219 a share for the Botox maker. At the time, Valeant said that it would concentrate on “delivering strong organic results and evaluating acquisition opportunities as we always have: prudently, in a disciplined manner, and in the best interests of our shareholders.