Is Biogen (BIIB) A Great Long-Term Buy?

Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, published its “Longleaf Partners Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. Longleaf Partners Fund added 6.18% in the fourth quarter, taking returns for the full year to 23.58%, well ahead of its absolute return goal. However, the S&P 500 rallied 11.03% in the fourth quarter, taking the index’s full-year returns to 28.71%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Longleaf Partners Fund, in its Q4 2021 investor letter, mentioned Biogen Inc. (NASDAQ: BIIB) and discussed its stance on the firm. Biogen Inc. is a Cambridge, Massachusetts-based biotechnology company with a $31.0 billion market capitalization. BIIB delivered a -12.05% return since the beginning of the year, while its 12-month returns are down by -22.77%. The stock closed at $211.01 per share on February 28, 2022.

Here is what Longleaf Partners Fund has to say about Biogen Inc. in its Q4 2021 investor letter:

“Biogen (83%, 2.43%; 5%, 0.10%), a biotechnology company specializing in therapies for the treatment of neurological diseases, was a strong contributor before we exited the position in the first half. We began acquiring shares in January 2021, paying between 9- 11x FCF and a discount to our appraisal, even if the company’s promising drug pipeline turned out to be worth 0. After Biogen’s Alzheimer drug Aduhelm was approved in June, we quickly sold out after the stock’s price appreciated over 70% and briefly exceeded our appraisal of the value. We re-initiated a position in Biogen in December at a price below our original cost basis from January. The stock became very cheap once again after Aduhelm’s early sales disappointed due to its high initial cost before management correctly cut the price. We think Biogen’s core Multiple sclerosis (MS) and Biosimilars businesses are strong enough to create sustainable double-digit EPS growth, even if Aduhelm and the entire Alzheimer’s program is worth zero. We also expect a board led by large shareholders to continue the company’s accretive repurchase, while considering other beneficial corporate actions.”

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Our calculations show that Biogen Inc. (NASDAQ: BIIB) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. BIIB was in 63 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 66 funds in the previous quarter. Biogen Inc. (NASDAQ: BIIB) delivered a -10.63% return in the past 3 months.

In September 2021, we also shared another hedge fund’s views on BIIB in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.