Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares are around 9% in the green after the Wall Street Journal’s Dana Mattioli posted on twitter that TPG and Takeda had made a takeover offer for Valeant in recent weeks. The offer was supposedly a combined takeover approach, but didn’t place a firm price on the bid. It came before Valeant installed Joseph Papa as the CEO and there are now no talks between the companies. Valeant’s board wants to give Papa more time to turn around the company. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) has a lot of debt and also a lot of valuable assets.
Valeant Pharmaceuticals has been hit by major problems, which caused many smart money investors to dump their shares. Nevertheless, Valeant Pharmaceuticals Intl Inc (NYSE:VRX) was in 71 hedge funds’ portfolios at the end of the first quarter of 2016, compared to 83 hedge funds in our database with VRX positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Expeditors International of Washington (NASDAQ:EXPD), Shaw Communications Inc (USA) (NYSE:SJR), and Fortune Brands Home & Security Inc (NYSE:FBHS) to gather more data points.
To most market participants, hedge funds are assumed to be slow, old investment tools of years past. While there are over 8000 funds trading at the moment, Our experts choose to focus on the masters of this club, about 700 funds. These investment experts administer bulk of the smart money’s total asset base, and by tailing their best equity investments, Insider Monkey has uncovered a number of investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Of the funds tracked by Insider Monkey, Pershing Square, managed by Bill Ackman, held the most valuable position in Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Pershing Square had a $567.8 million position in the stock, comprising 6.4% of its 13F portfolio at the end of March. The second most bullish fund manager wass Jeffrey Ubben of ValueAct Capital, with a $394.3 million position; 3.9% of its 13F portfolio is allocated to the stock. Other peers that are bullish contain John Paulson’s Paulson & Co, Boykin Curry’s Eagle Capital Management and Jonathan Auerbach’s Hound Partners.
Judging by the fact that Valeant Pharmaceuticals Intl Inc (NYSE:VRX) has witnessed bearish sentiment from the smart money, logic holds that there exists a select few hedge funds that elected to cut their positions entirely in the fourth quarter. On the next page, we are going to take a closer look at some of those funds.