Mittleman Brothers recently released its Q1 2021 Investor Letter, a copy of which you can download here. Mittleman Investment Management’s composite gained 25.9% net of fees in the first quarter of 2021, versus gains of 6.2% in the S&P 500 Total Return Index and 12.7% in the Russell 2000 Total Return Index. You should check out Mittleman Brothers’ top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.
In the Q1 2021 Investor Letter, the fund highlighted a few stocks and Viatris Inc (NASDAQ:VTRS) is one of them. Viatris Inc (NASDAQ:VTRS) is a global generic and specialty pharmaceuticals company. In the last three months, Viatris Inc (NASDAQ:VTRS) stock gained 12%. Here is what the fund said:
“Our other new position in Q1 (in addition to AMA Group) is Viatris (VTRS), which is the old stock of the generic drug manufacturer Mylan Labs after it merged with Pfizers’s Upjohn unit late last year, via a tax-efficient Reverse Morris Trust. VTRS’s current market capitalization of ~$17B is less than 6x its estimated FCF of $3B (before restructuring costs) estimated for 2022, and the current enterprise value of $40B is only 6.4x EBITDA of $6.25B. Consider that Mylan Labs stock (MYL, predecessor to VTRS) was nearly $67/share on a $40B buy-out offer from Teva in 2015. Mylan rejected that seemingly very reasonable bid. In merging with Pfizer’s spin-off of Upjohn, Viatris became an equal (in sales, about $17B for each company) to the largest player in generic pharmaceuticals globally, Teva, Mylan’s former suitor. Viatris is an orphan, but its pedigree is tarnished (the reputation of Mylan’s management in rejecting the Teva bid, and other mistakes, still lingers), even though the new CEO and CFO come from Pfizer, the Chairman and President from Mylan remain. Also, ETFs that owned Pfizer had to sell the VTRS shares that they received, which added considerable forced selling.”
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In April, we published an article revealing that Viatris Inc (NASDAQ:VTRS) stock was one of the 10 cheap pharmaceutical stocks for 2021.
In Q4 2020, the number of bullish hedge fund positions on Viatris Inc (NASDAQ:VTRS) stock increased by about 40% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in VTRS’s growth potential. Our calculations showed that Viatris Inc (NASDAQ:VTRS) isn’t ranked among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.
