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Billionaire John Paulson Boosts Stakes in Endo Pharmaceuticals, Akorn; Plus Top Three New Positions

Famous for his bet against subprime mortgages at the height of the US housing bubble, John Paulson was just another hedge fund manager prior to that. Using Credit Default Swaps, Paulson made roughly $4 billion personally in 2007. Three years later he made a killer betting on gold, which netted him $4.9 billion. Forbes estimates Paulson’s current net worth at $9.8 billion. He founded Paulson & Co in 1994 with an initial fund injection of $2 million. Now the fund manages close to $19.4 billion worth of assets, with the equity portfolio carrying an estimated market value of $13.5 billion at the end of the first quarter. Paulson & Co is heavily invested in health care stocks, which account for more than half of the portfolio. In this article we’ll take a look at two moves in the pharmaceutical companies and three new additions made by Paulson and his team during the first quarter.

At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).

John Paulson
John Paulson
Paulson & Co

Pharma Stocks “Deeply Oversold”

During the first quarter, Paulson nearly tripled his investment in Endo International plc (NASDAQ:ENDP), a major pharmaceutical company. According to its recent 13F filing, his fund, Paulson & Co, holds approximately 9.52 million shares valued at $268 million. “Specialty pharmaceutical names are deeply oversold and we believe there is significant upside from this point onwards,” said Armel Leslie, a spokesman for Paulson & Co. Jacob Gottlieb is also optimistic about the prospects of Endo International plc (NASDAQ:ENDP), having boosted his fund’s investment in the compan by 30%. Visium Asset Management reportedly holds 6.68 million shares worth some $188 million. The stock fell by 85% since it reached its all-time high of $96.58 a year ago, as Endo International plc (NASDAQ:ENDP) faced increased competition in the market. Recent revelations about the use of fraudulent pharmacy tactics have also put pressure on the stock. The company has recently slashed its 2016 earnings guidance by 23% to a range of $4.50 to $4.80 per share, while revenue projections were cut by roughly 11% to a range of $3.87 billion to $4.03 billion.

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