In the most recent quarter, billionaire John Paulson, the president and portfolio manager of hedge fund Paulson & Co, made several key changes to his portfolio. Paulson, one of Trump’s economic advisors, is no doubt hoping to revive the fortunes of his flailing $9.23 billion fund which has over half its stocks in the healthcare sector.
Based on the most recent 13F forms submitted by the fund to the SEC, we can see where Paulson decided to invest, and where not to invest, in the last quarter (Q3). The most notable changes in Paulson’s holdings include reductions to his Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Synergy Pharmaceuticals Inc (NASDAQ:SGYP), and Endo International plc (NASDAQ:ENDP).
As this TipRanks’ graph shows at -32.78% the fund’s measured performance is significantly lower than both the S&P 500 and the average hedge fund portfolio, after performance tanked in 2015 and 2016:
Indeed, the fund’s average return last year came in at -19.67%. Performance in the last quarter was up, although it is hard to be positive when returns are still in the red at -0.48%.
Valeant Pharmaceuticals Intl Inc
Paulson shaved his holding of controversial VRX stock in Q3 by -1.05% to 18,871,000 shares worth $463 million, in other words just over 5% of his portfolio. Since the last quarter, the stock has dropped a drastic 43%. VRX announced its Q4 results on Jan 23 revealing a $1.22 billion quarterly loss as the company struggles to get rid of its Salix gastrointestinal business. It has now forecast adjusted EPS for 2017 of $5.5 down from the $7 previously forecast. However, some hedge fund managers (Chris Davis and Francis Chou for example) are seeing this as a buying opportunity while Bill Ackman continues to cling to his $530m holding.
Out of the 12 analysts polled in the past 3 months, 1 rates Valeant stock a Buy, 8 rate the stock a Hold and 3 recommend to Sell. With a return potential of 43%, the stock’s consensus target price stands at $19.82.
Synergy Pharmaceuticals Inc
Paulson also cut his Synergy Pharma holding by -12.71%. His holding now has a reported value of $133.5 million (1.45% of his portfolio). Since the last quarter, the stock has actually made a gain of 4.54%. Analysts are very bullish on SGYP: the analyst consensus rating on TipRanks is strong buy while the average analyst price target suggests a 93% upside potential to the current share price. Syngery recently announced FDA approval of its drug Trulance (plecanatide) which treats chronic idiopathic constipation (CIC). It is estimated that CIV affects as many as 33 million Americans and around 14% of the global population.
Out of the 6 analysts polled in the last 3 months, 5 are bullish on Synergy Pharmaceuticals stock, while 1 remains neutral. With a return potential of nearly 105%, the stock’s consensus target price stands at $11.17.
Endo International plc
Goodbye Endo. Paulson reduced his Endo holding by -11.19%. Now the holding has a reported value of $160.27 million. The stock has dropped close to -40% since the last quarter. Despite this market consensus is fairly bullish on Endo with the average analyst price target on TipRanks coming in at 87% above the current share price of $12.17. Indeed, in the last quarter hedge fund guru Ray Dalio initiated a $17.88 million position in Endo. The pharmaceutical company has just announced that it has reached a proposed settlement with US regulators over allegations that it paid rivals (such as Impax Laboratories) to delay the introduction of generic versions of its painkillers Opana ER and Lidoderm.
The overwhelmingly majority of analyst still say Endo is a “buy.” The average forecast is for the stock to hit $92 in the coming months, according to data compiled by TipRanks, a site that tracks and ranks analysts on their predictions.
Top Performing Hedge Funds
The 61-year-old hedge fund manager, who became famous in 2007 when he made billions betting against the housing market, is ranked #192 out of 207 hedge funds tracked by financial accountability engine TipRanks. To see which stocks the top-performing hedge fund managers are holding click here.