Lookback: Miller Value Partners 2019 Mallinckrodt PLC (MNK) Thesis

If you are looking for the best ideas for your portfolio you may want to consider some of Miller Value Partners top stock picks. Miller Value Partners, an investment management firm, is bullish on Mallinckrodt Plc (NYSE:MNK) stock. In its Opportunity Equity Q3 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Mallinckrodt Plc (NYSE:MNK) stock. Mallinckrodt Plc (NYSE:MNK) is a pharmaceutical company.

On October 21, 2019, Miller Value Partners had released its Opportunity Equity Q3 2019 investor letter. The investment firm said that Mallinckrodt Plc (NYSE:MNK) was one of the biggest detractors to its performance in Q3 2019. Mallinckrodt Plc (NYSE:MNK) stock has posted a return of -91.9% in the trailing one year period, underperforming the S&P 500 Index which returned 15.4% in the same period. This suggests that the investment firm was wrong in its decision.

Miller Opportunity Equity fund posted a return of -1.81% in the third quarter of 2019, underperforming the S&P 500 Index which returned 1.70% in the same quarter. Let’s take a look at comments made by Miller Value Partners about Mallinckrodt Plc (NYSE:MNK) stock in the Q3 2019 investor letter.

“Mallinckrodt plc (MNK) continued to decline over the quarter, losing 73.8%, as opioid litigation continued to weigh on the stock. The stock drastically dropped after Bloomberg reported that the company had hired restructuring advisers, although nothing has come of it so far. The company then announced a settlement to resolve the track 1 opioid cases in two Ohio counties with a $24M cash payment and $6M in generic product donations. The company lost an appeals court bid to revive patent-infringement claims over Praxair’s generic version of INOmax. The company announced positive Phase 3 Data for both Terlipressin and Stratagraph over the quarter as well as positive read outs from their Phase 4 Acthar studies in MS and RA.”

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In Q1 2020, the number of bullish hedge fund positions on Mallinckrodt Plc (NYSE:MNK) stock decreased by about 10% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in Mallinckrodt’s growth potential. Our calculations showed that Mallinckrodt Plc (NYSE:MNK) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.