Five Foreign Stocks Hedge Funds Love

#1 Allergan plc Ordinary Shares (NYSE:AGN)

Investors with Long Positions (as of September 30): 151

Aggregate Value of Investors’ Holdings (as of September 30): $20.47 Billion

The number of funds with long positions in the Dublin-based pharmaceutical company remained unchanged during the third quarter and it ranked as the most popular stock among the funds we track. In the fourth quarter of 2015, the stock gained some 25% as Allergan plc Ordinary Shares (NYSE:AGN) entered into an acquisition agreement with Pfizer. The deal, valued at around $160 billion will create the world’s largest drugmaker in terms of sales. However, since the beginning of the year, the stock slid by 12% amid a broader market decline. One of the largest investors in Allergan at the end of the third quarter was Barry Rosenstein‘s JANA Partners, which held 1.89 million shares, according to its last 13F filing. In a recent investor letter, Rosenstein said:

“We first invested in Allergan (through its predecessor Actavis) in November 2013. Since then, we have watched the company increase per share value through three transformative transactions: the acquisition of Forest Laboratories Inc. (announced February 2014), the acquisition of Allergan, Inc. (announced November 2014), and in July, the announced sale of its generics franchise to Teva Pharmaceutical Industries, Ltd. (TEVA), which we expect to close in the first quarter of 2016. When the TEVA transaction closes, the new Allergan will be a branded pharmaceutical company with six key therapeutic areas and $15 billion of revenues, expected to grow its top line at low double digits and earnings per share at 20 percent per annum. It will also have close to zero net leverage when adjusted for the proceeds from TEVA. The AGN of tomorrow looks nothing like the small generic company of Watson Pharmaceuticals Inc. that Paul Bisaro took the helm of in 2007.”

Disclosure: None