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Why Akorn, Inc. (AKRX) Shares Spiked Higher

Akorn, Inc. (NASDAQ:AKRX) shares have surged 18% on Friday after Bloomberg reported that its sources say Fresenius SE ‘is weighing a bid’ to buy Akorn. German Fresenius SE is the largest publicly listed health-care provider in Europe and its CEO, Stephan Sturm, has been expanding the company through acquisitions. In 2016, Fresenius bought Spanish health provider Salud Holding SLU for around $6.11 billion and the potential purchase of Akorn would be another ambitious M&A move. If Fresenius did buy Akorn, Inc. (NASDAQ:AKRX), some investors believe Akorn could mesh with Fresenius’ Kabi medicines segment, which currently accounts for around one fifth of sales. With that being said, the Bloomberg report also did say that ‘no final decisions have been made’ and there is always the potential that no bid materializes.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

Of the 742 elite funds we track, 29 funds owned $381.57 million of Akorn, Inc. (NASDAQ:AKRX) and accounted for 14.00% of the float on December 31, versus 28 funds and $500.56 million respectively on September 30. In terms of individual movement, Philippe Laffont‘s Coatue Management intiated a new stake of 1.433 million shares in Q4, good for $31.286 million at the end of December. John Paulson‘s Paulson & Co trimmed its stake slightly, by 4%, in Q4 to 8.686 million shares.

The Bottom Line

Akorn, Inc. (NASDAQ:AKRX) shares have spiked higher due to M&A hopes. For further reading, browse the article ‘11 Biggest Generic Drug Companies In the World‘.

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