Are Hedge Funds Losing Interest in Valeant Pharmaceuticals Intl Inc (VRX)?

Let’s now take a quick look at what Barry Rosenstein of JANA Partners had to say about his firm’s investment in Valeant Pharmaceuticals Intl Inc. (NYSE:VRX). In its third-quarter letter to investors, JANA Partners said that the firm initiated a position in the struggling company in the fourth quarter of 2014 and closed out its entire position in September 2015, claiming that “When the facts do change, we react”. To be more detailed, the letter said the following:

“The situation for Valeant changed dramatically in September, when its drug pricing practices were called into question by Hillary Clinton. Valeant had been under scrutiny for months, and in retrospect we should have been more acutely attuned to the importance of the inquiry into the price increases or certain of Valeant’s drugs by Senator Sanders and Representative Cummings that surfaced in August. We had reduced our Valeant position meaningfully earlier in the spring and summer as it approached our price target, and we felt more comfortable with our smaller position. When Valeant’s business practices were conflated with those or Turing, whose founder painted himself and his company (and by extension Valeant) as a nearly perfect political target, we recognized that Valeant’s business model would be forced to change in ways we could neither anticipate nor forecast and decided to exit completely, thereby avoiding an approximate 40% further drawdown in the stock”.

How have hedgies been trading Valeant Pharmaceuticals Intl Inc (NYSE:VRX)?

At Q4’s end, a total of 83 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 6% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Pershing Square holds the most valuable position in Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Pershing Square has a $1.69 billion position in the stock, comprising 13.5% of its 13F portfolio. Sitting at the No. 2 spot is ValueAct Capital, managed by Jeffrey Ubben, which holds a $1.52 billion position; 10.6% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism consist of John Paulson’s Paulson & Co, Peter Adam Hochfelder’s Brahman Capital and Andreas Halvorsen’s Viking Global.