Billionaire Paul Singer’s Top Picks for 2016

#4 Allergan plc (NYSE:AGN)

– Shares Owned by Elliott (as of December 31): 2.02 Million

– Value of Elliott’s Holding (as of December 31): $631.41 Million

Elliott Management was very bullish on Allergan plc (NYSE:AGN) during the December quarter, as the activist fund boosted its stake in the company by 1.36 million shares quarter-over-quarter to 2.02 million shares. The total number of billionaires tracked by Insider Monkey with long positions in the Botox-maker increased to 29 from 26 during the fourth quarter. Allergan and Pfizer Inc. (NYSE:PFE) announced a mega tax inversion deal in November 2015, which will create the world’s largest drugmaker. A number of financial hubs, including RBC Capital Markets, believe that the multi-billion dollar merger is unlikely to fail, which means that investors can monetize on the gap between Allergan’s current share price and the deal price. Specifically, the shares of Allergan are currently trading at a 16% discount to the value of the merger, which assigns Allergan’s stock a value of approximately $334 per share. Andreas Halvorsen of Viking Global cut his stake in Allergan plc (NYSE:AGN) by 1.22 million shares during the October-to-December period, to 5.98 million shares.

#3 Alcoa Inc. (NYSE:AA)

– Shares Owned by Elliott (as of December 31): 67.10 Million

– Value of Elliott’s Holding (as of December 31): $662.28 Million

The billionaire activist investor initiated a new position of 67.10 million shares in Alcoa Inc. (NYSE:AA) during the last three months of 2015, which was valued at $662.28 million. According to a 13D filed earlier this month, the aluminum producer and Mr. Singer and his team reached an agreement under which the size of the company’s Board of Directors was increased to 15 members, with Ulrich Schmidt, Sean O. Mahoney, and John C. Plant joining the Board. Let us remind you that Alcoa plans to separate the upstream aluminum production and midstream production side of its business from its higher-value businesses, creating two independent, publicly-traded companies. In a separate 13D filing submitted with the SEC in the second half of 2015, Mr. Singer called Alcoa’s shares “dramatically undervalued by the public market” and also saluted the company’s spinoff intentions. The shares of Alcoa are 17% in the red year-to-date, extending their one-year loss to 48%. Ken Griffin’s Citadel Advisors LLC owns 5.66 million shares of Alcoa Inc. (NYSE:AA) as of the end of 2015.