Why These Billionaire Seth Klarman’s Stock Picks Deserve Your Attention

In Allergan plc (NYSE:AGN), Baupost Group held slightly over 2.0 million shares valued at $461.08 million at the end of September. Allergan reported third-quarter revenues and EPS of $3.62 billion and $3.32, respectively, which were below consensus estimates, despite notable increases in sales of drugs such as Botox and Restasis. In addition, the drug maker expanded its share buyback plan to $15 billion from $10 billion. Following the report, analysts from Leerink, UBS, and RBC Capital slashed their price targets on Allergan to $266 from $294, to $240 from $300, and to $279 from $300, respectively, while keeping their “buy” recommendations. Recently, Allergan has been hit with stock decreases amid news of incoming US President Donald Trump’s plan to crack down on rising drug prices and the US patent regulator’s approval of a request for a review on Restasis’ IP. Year to date, Allergan’s stock suffered a sharp 39% fall, and is recently at record lows not reached since early 2014. Nevertheless, 115 hedge funds tracked by Insider Monkey had investments in Allergan plc (NYSE:AGN) at the end of the third quarter.

Baupost Group obtained a stake in Dell Technologies Inc (NYSE:DVMT) amounting to 6.65 million shares worth $317.99 million at the end of the third quarter, as a result of the $60 billion merger between Dell Inc. and EMC Corp. The transaction, completed on September 7, triggered the conversion of the hedge fund’s holdings in EMC, amounting to about 56.96 million shares worth $1.55 billion as of the end of the second quarter. EMC shareholders such as Baupost received $24.05 per share in cash and around 0.11 shares of Dell Technologies stock for each EMC share they held. Dell Technologies’ stock grew more than 10% since the merger’s completion. Among hedge funds tracked by Insider Monkey, 86 funds held positions in Dell Technologies Inc. (NYSE: DVMT) worth $3.59 billion in aggregate at the end of the third quarter.

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