Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Shire PLC (ADR), Allergan, Inc., Time Warner Cable Inc: John Paulson’s Top Merger Picks

Page 1 of 2

John Paulson‘s Paulson & Co has been having it rough for the past two years, as far as stock picking goes. A sour bet on Whiting Petroleum Corp (NYSE:WLL), failed investments in Fannie Mae and Freddie Mac, and the failure of AbbVie Inc. (NYSE:ABBV) to acquire Shire PLC (ADR) (NASDAQ:SHPG) were the highlights of its disastrous moves in 2014. However, Paulson’s fund seems to be making a turnaround at the start of this year, which makes it worthwhile to look at his top five picks heading into 2015, according to his latest 13F filing with the SEC.

largest hedge funds in the world

John Paulson is perhaps most famous for his bets against subprime mortgages in light of which the assets of Paulson & Co peaked at $38 billion in 2011. As of January 1, 2015 the assets under management amounted to $17.8 billion due to losses and investor withdrawals in the last two years. Founded in 1994, Paulson & Co specializes in event-driven investing which involves profiting from arbitrage opportunities such as merger arbitrage, bankruptcy reorganizations and distressed credit. The company has eight funds under its management with the Paulson Advantage Fund being the flagship fund. Currently, 42.6% of the fund’s investments are in the health care sector.

After the fund increased its holding in Shire PLC (ADR) (NASDAQ:SHPG) by 169% in the third quarter in expectation of the merger deal with AbbVie Inc. (NYSE:ABBV) to materialize, it reduced the stake by 7% in the fourth quarter due to termination of the deal. The shedding of 717,696 shares of Shire in the last quarter has left the fund’s stake in the company at 8.33 million shares, valued at $1.77 billion. The position forms a significant 9.73% of the portfolio value.

Shire PLC (ADR)

Other investors who have also put their hopes in Shire for substantial returns going into 2015, including Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, and Samuel Islay of Orbimed Advisors. The funds have 1.28 million and 1.17 million shares valued at $273 million and $249 million respectively.

Allergan, Inc. (NYSE:AGN) is another one of Paulson & Co’s top picks, as it forms 6.99% of the fund’s portfolio value. Paulson added 992,800 additional shares to the position during the fourth quarter, which now stands at 6.37 million shares, valued at nearly $1.35 billion. The move also marked an 18% increase on the previously held position.

Allergan, Inc. (NYSE:AGN)

Allergan, Inc. (NYSE:AGN)’s stock is up nearly 9% year-to-date. The Botox manufacturer is set to be acquired by Actavis plc (NYSE:ACT) in light of the $66 billion takeover bid that fended off Bill Ackman of Pershing Square and Valeant Pharmaceuticals Intl Inc (NYSE:VRX), who had made their own attempt to takeover the company.

In its fourth quarter earnings report Allergan beat revenue estimates by $10 million, by posting a top line figure of $1.91 billion. Earnings per share (EPS) also beat the estimates by $0.34 and stood at $2.17.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!