Valeant Pharmaceuticals Intl Inc. (NYSE:VRX)
– Number of shares held by HealthInvest Partners as of March 31: 370,000
– Value of HealthInvest’s holding as of March 31: $9.73 Million
The Stockholm-based investment firm also purchased a 370,000-share position in embattled Valeant Pharmaceuticals Intl Inc. (NYSE:VRX), which was worth $9.73 million on March 31. The shares of the Canadian-based pharmaceutical company have declined by 83% in the past 52 weeks due to strong criticism over exploitative price gouging and questions about the company’s accounting principles. Valeant Pharmaceutical recently completed the internal review of various Philidor and other related accounting matters, but its shares continue to trade at seemingly low levels due to ongoing worries surrounding the company’s business model. Valeant had been growing at a high pace in recent years by acquiring pharmaceutical companies with existing products, after which the company cut expenses through layoffs and downsizing and then raised the prices of acquired drugs. In a fresh letter to investors, HealthInvest Partners said that “Although the criticism of the business model has some merit, we believe the shares may offer substantial upside as Valeant’s market cap now hovers around 3x free cash flow.” Ray Carroll’s Breton Hill Capital reported owning 16,752 shares of Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) through its 13F filing for the March quarter.
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Merck & Co. Inc. (NYSE:MRK)
– Number of shares held by HealthInvest Partners as of March 31: 251,400
– Value of HealthInvest’s holding as of March 31: $13.30 Million
The fund’s 13F filing also revealed that HealthInvest initiated a new stake of 251,400 shares in Merck & Co. Inc. (NYSE:MRK) during the first three months of 2016, which was valued at $13.30 million on March 31. The Swedish investment firm discussed their investment in global health care company Merck & Co. in the investor letter mentioned above, saying that “Merck has experienced three difficult years characterized by declining sales and profits, but this negative development has now come to a halt”. Moreover, the letter said that Merck’s recent lunch of Keytruda, designed and approved for the treatment of advanced melanoma and metastatic non-small-cell lung cancer, as well as the launch of Zepatier, designed for the treatment of adult patients with chronic hepatitis C virus (HCV), “hold a lot of promise”. Shares of Merck are 7% in the green year-to-date and currently change hands at around 15.0-times expected earnings, below the forward P/E multiple of 15.3 for the health care sector and the ratio of 18.5 for the S&P 500 Index. Merck & Co. also pays out a quarterly dividend of $0.46 per share, which equates to a dividend yield of 3.25%. Ken Fisher’s Fisher Asset Management owns 6.70 million shares of Merck & Co. Inc. (NYSE:MRK) as of March 31.
