In this article, we discuss billionaire John Paulson’s top 5 stock picks. For Paulson’s investment philosophy and his comments on certain stocks, please see Billionaire John Paulson’s Top 10 Stock Picks.
5. Viatris Inc. (NASDAQ: VTRS)
Value: $215,103,000
Percent of John Paulson’s 13F Portfolio: 5.58%
Number of Hedge Fund Holders: 67
Viatris, formerly named Mylan, was formed in November 2020 as a result of the merger between Mylan and Pfizer’s off-patent division Upjohn. The company recently said the FDA approved its first generic version of Symbicort to treat certain patients with asthma or chronic obstructive pulmonary disease. In February, the company said it expects revenue of $17.2 billion to $17.8 billion in 2021, compared to the Street’s consensus of $18.46 billion. For the first fiscal quarter of 2021, it expects a dividend of $0.11 per share.
The company is also getting the attention of the smart money, as 67 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the fourth quarter, up from 48 funds a quarter earlier.
4. SPDR Gold Shares (NYSE: GLD)
Value: $337,859,000
Percent of John Paulson’s 13F Portfolio: 8.76%
Number of Hedge Fund Holders: 62
Billionaire John Paulson remains bullish on gold despite the current volatility as his hedge fund ended the fourth quarter with 1.9 million SPDR Gold shares. The total worth of this stake is $337.9 million. Gold price ticked up on March 17 after the Federal Reserve indicated that it plans to stick to its near-zero interest rate policy at least through 2023.
With a $692.9 million stake in GLD, First Eagle Investment Management owns 3.8 million shares of the ETF as of the end of the fourth quarter of 2020. Our database shows that 62 hedge funds held stakes in SPDR Gold Shares as of the end of the fourth quarter, versus 65 funds in the third quarter.
3. BrightSphere Investment Group Inc. (NYSE: BSIG)
Value: $385,611,000
Percent of John Paulson’s 13F Portfolio: 10%
Number of Hedge Fund Holders: 26
Brightsphere Investment Group Inc. is a Boston-based asset management company that is managing about $140 billion. The company has about 13 offices across the globe, with roughly 550 institutional and sub-advisory clients. In the fourth quarter, the company posted a non-GAAP EPS of $0.47, beating the Street’s estimates by $0.04. Revenue in the quarter fell 13.8% to $178 million, beating the consensus by $3.13 million.
The company is also getting the attention of the smart money, as 26 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the fourth quarter, up from 25 funds a quarter earlier.
2. Bausch Health Companies Inc. (NYSE: BHC)
Value: $537,452,000
Percent of John Paulson’s 13F Portfolio: 13.95%
Number of Hedge Fund Holders: 43
Formerly known as Valeant Pharmaceuticals, Bausch Health Companies is a Canada-based pharmaceutical firm that makes treatments for skin, eye, neurological and gastrointestinal diseases. Bausch Health stock is up 135% over the last 12 months. The company in February said it plans to cut its debt by $100 million through the redemption of outstanding senior secured notes and cash.
John Paulson’s Paulson & Co is one of the 43 hedge funds tracked by Insider Monkey having stakes in BHC at the end of the fourth quarter. The fund owns over 25.8 million shares of the company.
In one of their investor letters, Chou Associates Management highlighted a few stocks and Bausch Health Companies Inc. (NYSE:BHC) is one of them.
Here is what Chou Associates Management said:
“In early August, Bausch Health Companies Inc. announced that it is planning to spin off its eye care business, Bausch + Lomb, into an independent publicly traded company. This will allow the company to concentrate on its gastroenterology, aesthetics/dermatology, neurology and international pharma business.
Chairman and CEO Joseph Papa said, “We’ve looked at the value of our pure health companies like Alcon and Cooper and believe that Bausch + Lomb would compare very favorably when investors have an opportunity to make a judgment about the relative value of the stand-alone business”.
Comparables like Cooper Companies and Alcon Inc. are currently trading between 18 and 20 times EBITDA. If Bausch + Lomb trades at similar multiples as a stand-alone company, the total value of Bausch Health using sum-of-the-parts method, net of debt, should be worth north of $35 per share, as an inference. For a long time we have felt that Bausch was undervalued, but the investors were not giving credit that management has done a good job in running the operations, selling non-core assets, as well as de-leveraging its balance sheet. They felt the process was too slow, we hope the spin-off of Bausch + Lomb unit will be the catalyst that is needed for investors to price the company closer to its intrinsic value.”
1. Horizon Therapeutics Public Limited Company (NASDAQ: HZNP)
Value: $584,574,000
Percent of John Paulson’s 13F Portfolio: 15.17%
Number of Hedge Fund Holders: 55
Topping the list of billionaire John Paulson’s top 10 stock picks is another pharmaceutical company. Horizon Therapeutics makes treatments for rare diseases like thyroid eye disease, and inflammatory diseases like gout. Some of its brands include Tepezza, Krystexxa, Duexis, Vimovo and Ravicti.
As of the end of the fourth quarter, 55 hedge funds in Insider Monkey’s database of 887 funds held stakes in HZNP, compared to 61 funds in the third quarter. VenBio Select Advisor is the biggest stakeholder in the company, with 9 million shares, worth $658.4 million.
You can also take a peek at Joel Greenblatt’s Portfolio and Recent Buys and Billionaire Dan Loeb’s Top 10 Stock Picks.
