Billionaire Bill Ackman Buys More Valeant Shares, Starboard Value Gradually Jettisons Darden Restaurants Inc. (DRI) Stake and Two Other Moves

Billionaire Bill Ackman is not giving up on Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) just yet. According to a Schedule 13D filing, Pershing Square currently owns 30.71 million shares of the specialty pharmaceutical and medical device company, which constitute 9.0% of its total outstanding shares. This denotes an increase of 1.62 million shares from the position disclosed through a 13D filing submitted at the end of December. Valeant represents Ackman’s largest equity holding as of the end of September, which has hit his fund’s performance quite dramatically last year. The increased political attention on drug pricing, regulatory scrutiny, criticism from short sellers, and the termination of a key distribution arrangement stand behind the disastrous performance of Valeant’s shares. The stock is down 42% over the past 12 months, after having lost nearly 8% thus far in 2016. Nonetheless, Pershing Square believes that “Valeant became a smaller and, in our view, even more attractive investment”, as revealed by its most recent letter to investors. Valeant Pharmaceuticals Intl Inc. (NYSE:VRX)’s forward P/E multiple of 7.18 proves the truth of Bill Ackman’s words, but it remains to see whether the billionaire’s investment thesis will turn out to be accurate on this occasion. For comparison, the Drug Retail industry has a forward P/E of 16.3, while the S&P 500 benchmark follows a ratio of 15.87. A total of 88 smart money investors from our system were invested in the struggling company at the end of September, accumulating approximately 29% of its total shares. Jeffrey Ubben’s ValueAct Capital is another major shareholder of Valeant Pharmaceuticals Intl Inc. (NYSE:VRX), holding 14.99 million shares as of September 30.