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Horizon Pharma PLC (HZNP), Apple Inc. (AAPL): How Billionaire Mark Kingdon’s Picks Performed in Q1

Kingdon Capital Management, a New-York based hedge fund, was founded by Mark E. Kingdon in 1983. Prior to this, he worked for AT&T and Century Capital Associates. Mark Kingdon attended Columbia College and then entered Harvard Business School. The fund posted a return of 16.6% per year, from its inception until 2011.

Horizon Pharma

Insider Monkey tracks the moves of hedge funds and billionaire investors in order to identify actionable investment opportunities in real time. Our research has shown that hedge funds are extremely talented at identifying small-cap investment opportunities. In our back tests ranging from 1999 through 2012, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Total Return Index by nearly a percentage point per month. We have also been sharing this list of hedge funds’ favorite small-cap stocks since the end of August 2012. These stocks returned 137.7% through Tuesday, vs. a gain of 57% for the S&P 500 ETFs (read the details here).

Based on its latest 13 F filing, Kingdon had over 119 long positions, out of which 90 stocks have a more than $1.0 billion in market capitalization, the position in which returned 12.07% in the first quarter of 2015. The fund’s equity portfolio is mainly invested in healthcare and technology sectors, which comprise 31% and 17% respectively. Mark Kingdon’s top five picks delivered an average return of 24% during the first quarter of 2015, surpassing S&P 500 ETF (SPY)’s performance of 0.9% during the same period. The top 10 positions of the fund accounted for 31.66% of the portfolio with Visteon Corp (NYSE:VC), Tyson Foods, Inc. (NYSE:TSN), and Horizon Pharma PLC (NASDAQ:HZNP) representing  the top equity positions at the end of last year.

Horizon Pharma PLC (NASDAQ:HZNP), an Ireland-based specialty Biopharmaceutical company, engaged in developing products for arthritis, inflammation and orphan diseases, represents a 3.4% of stake in the fund’s portfolio. Mark Kingdon increased his exposure to the company by 183% in the fourth quarter of 2014, owning over 6.1 million shares valued at $78.3 million. The investment paid off, with the company delivering spectacular returns of 101.5% during the first quarter of 2015. Analysts remain bullish on the company supported by the firm’s recent news of acquiring Hyperion Therapeutics Inc (NASDAQ:HPTX) for $1.1 billion. Moreover, Horizon’s management expects Hyperion’s orphan disease drugs RAVICTI and BUPHENYL to add $100 million to the company’s adjusted EBITDA, including cost synergies of more than $50 million for 2016. The majority of analysts have a ‘Buy’ rating on Horizon Pharma PLC (NASDAQ:HZNP)’s stock, with JMP Securities and Piper Jaffray recently upgrading the stock price target to $31.00 with ‘Market Perform’ and ‘Overweight’ ratings respectively. Other large shareholders of Horizon Pharma PLC (NASDAQ:HZNP) are James Flynn’s Deerfield Management and Kevin Kotler’s Broadfin Capital holding 11.7 million shares and 8.9 million shares respectively.

Kingdon Capital also held 545,000 shares of Apple Inc. (NASDAQ:AAPL) worth $60.17 million. The company’s stock appreciated by 13.17% returns during the first quarter of 2015. Apple Inc. (NASDAQ:AAPL) has released for sale its Watch earlier this month and analyst’s believe that the pre-orders have already crossed the one million mark, and will boost the company’s revenues in the near future. However, the demand was so high that new orders have been pushed to July. Carl Icahn’s Icahn Capital is one of the top shareholders of Apple Inc. (NASDAQ:AAPL) with 52.76 million shares valued at $5.82 billion held as of the end of 2014.

CDK Global Inc (NASDAQ: CDK), a global provider in the technology and digital marketing, and advertising solutions for the automotive retail industry, constituted 2.5% of the fund’s portfolio. The fund owns 1.4 million shares valued at $56.97 million, as of the fourth quarter of 2014. The company went public in September 2014, after being spun-off from Automatic Data Processing (NASDAQ:ADP). CDK Global Inc (NASDAQ:CDK)’s stock rallied 52.16% since its IPO, and delivered 15% during the first quarter of 2015. The company forecasts a revenue growth of over 7%-8% in 2015, as compared to $1.97 billion revenue in 2014. Net earnings are expected to grow in the range of 6% – 8% in 2015, as compared to $1.29 per share in 2014. Jeffrey Tannenbaum’s Fir Tree has a large exposure to CDK Global Inc (NASDAQ:CDK), the position amassing 6.01% of its portfolio and containing 14.2 million shares.

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