Pfizer Inc. (NYSE:PFE) is Healthcor’s third choice and another new position, which could indicate it feels a merger between Pfizer and Gilead is a possibility in the coming year, something that has been rumored in recent months, but is becoming less and less likely as Gilead’s market cap continues to blow up. Healthcor purchased 3.22 million shares of Pfizer during the fourth quarter, which proved to be the perfect time to get on board, as Pfizer has rebounded from its 52-week low in the middle of October to gain over 25% since then. Pfizer was also just behind Gilead among funds we track, with 11.7% fund ownership. Among them were Fisher Asset Management with 31.20 million shares at the end of 2014, and AQR Capital Management, with 13.93 million shares.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) comes in fourth, and is yet another new position, with 650,000 shares. Also a top pick of billionaire Andreas Halvorsen, Valeant was at the center of merger talks last year, as Bill Ackman’s Pershing Square took a large position in Allergan, Inc. (NYSE:AGN) and tried to convince them to sell themselves to Valeant. While that deal eventually fell through on a better offer being made by Actavis plc (NYSE:ACT), Valeant continued to be a potential merger candidate heading into 2015, with Zoetis Inc (NYSE:ZTS) considered a possibility, with Ackman taking a liking to that company near the end of the year.
In late February, Valeant did indeed announce an acquisition, agreeing to purchase Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) for $158 cash per share. The acquisition sent Valeant’s shares through the roof, up 41.12% year-to-date. Jeffrey Ubben, who now sits on Valeant’s Board of Directors is one of the biggest winners of that deal, as his fund Valueact Capital held 19.38 million shares of Valeant at the end of 2014, valued at $2.77 billion. Those shares have since appreciated by more than $1 billion.
Lastly is Agilent Technologies Inc (NYSE:A), which Healthcor owns a sizable number of call options on, with those options being the fifth-most valuable position in its portfolio. Healthcor had 1.80 million call options valued at $73.69 million if exercised, an increase of 260% from the previous quarter. Healthcor owned a small long position on Agilent of 239,500 shares at the end of 2014, which had been trimmed by 78% during the fourth quarter. Agilent dove to $41 from $55 at the end of October as the company was forced to revise downward its guidance for the fourth time in the past year at the time. Agilent has rebounded slightly since then, now trading at $42.47, but may have some work to do for Healthcor to be able to call in and profit from those options. Daniel S. Och also had a large stable of call options on Agilent, with 6.09 million options at the end of 2014, an increase of 481% from the end of the third quarter.
Disclosure: None
