Here’s Why Hedge Funds Like Valeant Pharmaceuticals Intl Inc (VRX)

While the above mentioned hedge funds were bullish on Valeant, there were also a significant number of funds like Jeffrey Ubben‘s ValueAct Capital and Stephen Mandel’s Lone Pine Capital that trimmed their exposure to Valeant during the second quarter. However, considering the fact that most of these hedge funds had initiated a position in Valeant a long time ago and Valeant’s stock rose over 65% during the first six months of the year, one can assume that this selling was for profit booking purposes.

Right now everything seems to be going in favor of Valeant with most of the analysts that cover the stock being heavily bullish on it and the company continuing to do what it does best – making strategic acquisitions. It recently announced the acquisition of Sprout, a biopharmaceutical company that developed the first FDA approved female libido pill, for $1 billion and Synergetics USA (NASDAQ:SURG), a small company that supplies precision surgical devices, for $6.50 per share in cash. Keeping all these positives in mind and also considering that the stock has run up significantly in the past few years,  we think that investors who bought the stock some time ago must hold on to it. However, investors that want to get into it at present levels should only invest a part of their capital right now and wait for a better entry point to invest the rest amount.

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