In this article, we will discuss the 5 best stocks to buy according to John Paulson. If you want to read our detailed analysis of Paulson’s history, investment philosophy, and hedge fund performance, go directly to the 10 Best Stocks to Buy According to John Paulson.
5. Viatris Inc. (NASDAQ: VTRS)
Paulson’s Stake Value: $160,351,000
Percentage of John Paulson’s 13F Portfolio: 3.68%
Number of Hedge Fund Holders: 58
Viatris Inc. (NASDAQ: VTRS) is a global pharmaceutical company, which develops, licenses, produces, and trades brand and generic drugs. The company was founded in 1961 and is ranked fifth on the list of 10 best stocks to buy according to John Paulson. Viatris currently has a $16.82 billion market capitalization.
On June 15, Citi analyst Navann Ty initiated a coverage on Viatris Inc. (NASDAQ: VTRS) with a “Neutral” rating and a price target of $16. On May 10, Viatris announced a quarterly dividend of $0.11 per share. The company also posted earnings for the first quarter of 2021. It reported earnings per share of $0.92, beating market predictions by $0.12. In addition, the revenue for the first three months of 2021 was $4.4 billion, up 69.9% YoY, beating the estimates by $200 million.
Paulson & Co holds 11.48 million shares in Viatris Inc. (NASDAQ: VTRS), worth over $160 million, representing 3.68% of their portfolio.
Mittleman Brothers, in its first quarter 2021 investor letter, mentioned Viatris Inc. (NASDAQ: VTRS). Here is what the fund has to say about Viatris in its letter:
“Our other new position in Q1 (in addition to AMA Group) is Viatris (VTRS), which is the old stock of the generic drug manufacturer Mylan Labs after it merged with Pfizers’s Upjohn unit late last year, via a tax-efficient Reverse Morris Trust. VTRS’s current market capitalization of ~$17B is less than 6x its estimated FCF of $3B (before restructuring costs) estimated for 2022, and the current enterprise value of $40B is only 6.4x EBITDA of $6.25B. Consider that Mylan Labs stock (MYL, predecessor to VTRS) was nearly $67/share on a $40B buy-out offer from Teva in 2015. Mylan rejected that seemingly very reasonable bid. In merging with Pfizer’s spin-off of Upjohn, Viatris became an equal (in sales, about $17B for each company) to the largest player in generic pharmaceuticals globally, Teva, Mylan’s former suitor. Viatris is an orphan, but its pedigree is tarnished (the reputation of Mylan’s management in rejecting the Teva bid, and other mistakes, still lingers), even though the new CEO and CFO come from Pfizer, the Chairman and President from Mylan remain. Also, ETFs that owned Pfizer had to sell the VTRS shares that they received, which added considerable forced selling.”
