With Stock Returns Of Over 205% in the Last Year, This Fund Is Proof That Hedge Funds Aren’t Going Anywhere

Bristol-Myers Squibb Co (NYSE:BMY)

Sessa Capital initiated a position in Bristol-Myers Squibb Co (NYSE:BMY) during the final quarter of 2016 by purchasing call options underlying 1.95 million shares of the company. The fund became even more bullish on the company during the first-quarter of this year, when it upped its call options stake by 136% to underlie 4.62 million shares. At the end of the first-quarter, this position alone accounted for almost 40% of the value of the fund’s 13F portfolio, being worth $251.44 million.

Shares of the New York-based pharma major took a big hit in August of last year after it revealed that a phase 3 trial of its immunotherapy drug Opdivo, which was meant to slow disease progression in previously untreated patients with lung cancer, had failed to achieve its primary endpoint. Following this revelation, several analysts downgraded Bristol-Myers Squibb Co (NYSE:BMY)’s stock over the following few days, which led it to slide further. However, the stock has been mostly range-bound since the beginning of last October and is currently trading down by 7.56% year-to-date.

Earlier this year, rumors were making the rounds on the Street that drug giant Pfizer Inc. (NYSE:PFE) could make a bid for Bristol-Myers. These rumors were partially fueled by a note published on March 26 by Credit Suisse analyst Vamil Divan highlighting the synergies and benefits to Pfizer if such a deal were to take place. However, after Pfizer CEO Ian Read indicated earlier this month that the company is not looking to make an acquisition in the near-term, those rumors have been put to rest for now. A day after Mr. Read made his statement on May 3, analysts at BMO Capital Markets downgraded BMY to ‘Underperform’ from ‘Market Perform’ while keeping their target price on it intact at $47.

PJT Partners Inc (NYSE:PJT)

Although Sessa Capital reduced its stake in PJT Partners Inc (NYSE:PJT) by 4,600 shares during the first-quarter, the company still remained its top stock pick at the end of that period, with the value of the holding amounting to $51.54 million. PJT Partners Inc (NYSE:PJT)’s stock is up by over 25% this year and has returned 36.58% since the end of the fourth-quarter of 2015, when the fund initiated its stake in the company.

PJT Partners became a separate publicly traded entity in October 2015 after the Blackstone Group LP (NYSE:BX) spun-off its financial and strategic advisory services and fund placement businesses. Since its existence as a separate company, it has been headed by veteran investment banker Paul J. Taubman, who according to the Bloomberg Pay Index, was the highest paid Wall Street executive in 2015 with annual compensation of $164 million. For its most recent quarter, the niche investment bank reported EPS of $0.38 on revenue of $121 million, beating analysts’ consensus estimates by $0.08 and $16 million, respectively. On May 11, analysts at Bank of America upgraded the stock to ‘Buy’ from ‘Neutral’ and also upped their price target on it to $45 from $39, suggesting potential upside of 15.85%.

We’ll check out another favored stock of high-flying Sessa Capital on the final page of this article.