Here’s How Andreas Halvorsen’s Viking Global Managed A Terrific Q4

#1 Allergan plc Ordinary Shares (NYSE:AGN)

– Shares Owned by Viking Global (as of September 30): 7.2 million

– Value of Holding (as of September 30): $1.96 billion

Allergan plc Ordinary Shares (NYSE:AGN) has consistently ranked as the most popular stock among funds covered by us for the past few quarters. At the end of the third quarter, 151 hedge funds covered by us, (including 26 funds managed or founded by billionaires) disclosed owning a stake in the company. The conviction of all these investors, including Viking Global which increased its stake in the company by 6% during the quarter, paid off handsomely during the fourth quarter as the shares of Allergan plc Ordinary Shares (NYSE:AGN) shot up by 15% during that period.

A large part of the gains that the stock made came in October after rumors emerged that pharmaceutical giant Pfizer Inc. (NYSE:PFE) was interested in buying the company. On November 24, those rumors were confirmed when Pfizer Inc. (NYSE:PFE) announced that it would be merging with Allergan in a $160 billion ‘inversion deal’ and shift its headquarter to Ireland. The deal has received a lot of flak from industry regulators and lawmakers due to its reliance on financial engineering. However, industry experts and analysts feel that barring the financial engineering part, the deal will prove to be beneficial as it will bring together the medical benefits of the drugs that are being developed by both the companies and help the companies to lower their R&D costs.

Ahead of the merger, shares of Allergan are currently trading at a forward price-to-earnings multiple of 17.73, low for the stock of a healthcare company that is about to get acquired. On January 12, analysts at Leerink Swann reiterated their ‘Buy’ rating and $350 price target on the stock. Samuel Islay‘s Orbimed Advisors was one of the few funds that reduced its stake in the company during the third quarter; it sold 68,000 shares and brought down its holding to 1.44 million shares.

Disclosure: None