CQS Cayman’s Top Stock Picks For This Quarter

#2 Allergan plc Ordinary Shares (NYSE:AGN)

 – Shares held by CQS Cayman LP (as of March 31): 525,000

 – Value of Holding (as of March 31): $4.17 million

Moving on, CQS Cayman increased its stake in Allergan plc Ordinary Shares (NYSE:AGN) by 154% during the first quarter. However, the fund would seriously be questioning its thesis behind that decision in the last few weeks as Allergan plc Ordinary Shares (NYSE:AGN)’s stock has plummeted significantly during the second quarter. While the fall of the stock started in March itself when investors got concerned that the Pfizer-Allergan merge would most likely fall through, the decline intensified when the company along with Pfizer Inc. (NYSE:PFE) announced the termination of their $160 billion merger on May 6. Since mid-March, Allergan has lost nearly one-third of its market capitalization. Most analysts feel this recent drop has made Allergan’s stock extremely cheap considering the strong drug pipeline of the company and its sound balance sheet, which will be debt free after the sale of Allergan’s generics business to Teva Pharmaceuticals (NYSE:TEVA) gets completed. Stephen J. Errico‘s Locust Wood Capital Advisers inched up its stake in the company by 3% to 145,316 shares during the first quarter.

#1 Carnival Corp (NYSE:CCL)

 – Shares held by CQS Cayman LP (as of March 31): 525,000

 – Value of Holding (as of March 31): $4.17 million

With CQS Cayman LP increasing its stake in Carnival Corp (NYSE:CCL) by 90% during the first quarter, the company ended up becoming the fund’s top stock pick at the end of March. Carnival Corp (NYSE:CCL) was recently in the news after its ship Adonia made port in Havana on May 2, becoming the first U.S. cruise ship to do so in more than 50 years. However, this hasn’t had any impact on the company’s stock, which has been on a downtrend ever since the company reported better-than-expected fiscal first quarter results, on March 30. While analysts had expected EPS of $0.32 on revenue of $3.63 billion for the quarter, it reported EPS of $0.39 on revenue of $3.65 billion. Carnival Corp currently pays a quarterly dividend of $0.35 per share, which translates into an annual dividend yield of 2.84% based on its last trading price. Hedge funds that reduced their stake in the company during the first quarter included David Harding‘s Winton Capital Management, which brought its holding down by 23% to 742,562 shares.

Disclosure: None