Valeant Could Face Subpeona But Here’s Why You Should Buy It Anyway

Hedge funds tracked by Insider Monkey love Valeant Pharmaceuticals Intl Inc (NYSE:VRX), as they owned 29.10% of its outstanding shares on June 30, a notable figure for a company with a market cap of over $70 billion (at the time). 98 investment firms in our database held $22.02 billion in Valeant shares at that time, ranking it behind only Wells Fargo & Co (NYSE:WFC) in terms of the most money invested in a stock by the funds we track. If we discount the Buffett effect in Wells Fargo, we could say it’s the stock with the greatest amount of balanced ownership in our database. Likewise, billionaires had more money invested in Valeant than in any other healthcare stock, including Allergan PLC (NYSE:AGN).

One of those bullish investors is billionaire Andreas Halvorsen, who had this to say about Valeant in his fund Viking Global’s first quarter letter to investors:

“Similar to Valeant’s other core business platforms, the gastrointestinal space is characterized by strong organic growth prospects, a relatively favorable reimbursement outlook, and limited competition from larger pharmaceutical companies. We remain excited about Valeant and believe that the long-term earnings power of the company is significantly above consensus estimates. Valeant is among our top 20 holdings.”

Bill Ackman recently took a huge position in Valeant as well, citing its string of acquisitions and ability to efficiently integrate them into its existing operations as huge selling points of the company. Jeffrey Ubben’s ValueAct Capital also held a massive position in Valeant on June 30 of 14.99 million shares worth over $3.33 billion. John Paulson’s Paulson & Co. held an even 9.0 million shares.

Given the continued strong growth of the company and the utmost belief in it by many of the best money managers in the world, we believe the current selloff amounts to a prime buying opportunity.

Disclosure: None