Billionaire Andreas Halvorsen’s Viking Global Cuts Losses and Dumps Southwestern Energy and Teva Pharmaceutical, Still Bullish on Bank of America

On the other hand, Viking closed its stake in Southwestern Energy Company (NYSE:SWN), having sold 42.26 million shares it had disclosed in its 13F for the end of September. The position was sold as Southwestern was the biggest loser in Viking’s portfolio during the fourth quarter.

“Southwestern, along with many other natural gas equities, underperformed considerably in October due to weakness in the spot price for gas and high levels of gas storage. In spite of the recent, strong recovery in the near-term commodity price, the equities have remained depressed due to an expected pickup in domestic production over the medium to long term,” Viking said.

Nevertheless, the investment in Southwestern Energy Company (NYSE:SWN) generated profits over the full 2016, but the fund exited the position to pursue more attractive investments. Other investors seem generally more bullish on Southwestern, as our data show that the number of investors long the stock jumped by seven to 44 during the fourth quarter. These funds held over 12% of the company’s outstanding stock heading into 2017.

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) represented Viking’s largest detractor last year, affecting the returns of both VGE and VLF by 1.8%. Viking had held over 19.68 million shares of Teva at the end of September, but closed the stake in the following three months. In its third-quarter letter to investors, Viking said that it had added Teva to its portfolio following news that it would acquire Allergan’s generic business. The investor was confident that the deal would result in a “best-in-class” generic drugs business and that the market underestimated Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)’s potential for revenue growth.

“However, we learned about several headwinds during the [third] quarter, including invalidation of a key patent for Teva’s largest franchise, Copaxone, potentially opening it up to generics competition sooner than expected, and the disclosure that the company was claiming fraud in its $2.3 billion acquisition of a Mexican drugmaker. In addition, Teva’s stock traded down following the news that Mylan, its largest publicly traded peer, was facing public criticism over how it priced its largest product, EpiPen,” Viking said.

Overall, Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) saw the hedge fund sentiment decline during the fourth quarter, as the number of funds from our database bullish on the company fell to 39 from 54, while the aggregate value of their holdings slid to $2.39 billion from $4.25 billion.

Disclosure: none