Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks or identifying undervalued stocks in general. However, some billionaires like Larry Robbins of Glenview Capital Management did not perform particularly well last year, as his fund lost 17% in 2015. Truth be told, Glenview Capital was one of the worst performing hedge funds in the entire industry last year. Nonetheless, Mr. Robbins is widely-known for his successful bets in the healthcare space, so the following article will discuss the hedge fund activity surrounding one of this billionaire’s top stock picks as of the end of the December quarter, as well as reveal Mr. Robbins’ thoughts on this stock.
Is CIGNA Corporation (NYSE:CI) a bargain? The smart money is becoming less confident. The number of bullish hedge fund positions retreated by 9 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as China Telecom Corporation Limited (ADR) (NYSE:CHA), Raytheon Company (NYSE:RTN), and Suncor Energy Inc. (USA) (NYSE:SU) to gather more data points.
In July 2015, CIGNA Corporation (NYSE:CI) and Anthem Inc. (NYSE:ANTM) sealed a merger agreement, under which the latter health insurer will acquire the former for $103.40 in cash and 0.5151 shares of Anthem for each share of CIGNA. The multi-billion dollar deal will create the largest health insurance company in the United States should the merger receive regulatory approval. The deal has already been approved by four out of 26 states, those being Alabama, Tennessee, Nevada and Montana. The remaining 22 states and federal regulators are currently in the process of reviewing the deal, which is anticipated to close in the second half of 2016. In the meantime, shares of CIGNA are trading at a discount of 18% to the aforementioned cash-and-stock deal, which values CIGNA at approximately $172 per share.
Now, we’re going to take a look at the new action encompassing CIGNA Corporation (NYSE:CI), as well as discuss Mr. Robbins’ thoughts on his fund’s investment in the company.