Napier Park is Betting Big on Media General (MEG) and Allergan (AGN) for 2016; Plus 3 Other Major Moves

Based in New York, Napier Park Global Capital was spun out of Citi Capital Advisors in 2013 and is now overseeing approximately $6.2 billion worth of assets. The fund’s managers, Jim O’Brien and Jonathan Dorfman boast a modest equity portfolio, worth roughly $182 million at the end of 2015. They seem to have a knack for picking healthcare and consumer discretionary stocks, which account for roughly 70% of their portfolio. Napier Park was named 2015 Hedge Fund Manager of the Year by Risk magazine, in recognition for their expertise in “credit-intensive and structured assets.” In this article, we’ll take a look at some of the most eye-catching equity moves made by the firm during the fourth quarter, including in companies like Alphabet Inc (NASDAQ:GOOG) and Allergan plc Ordinary Shares (NYSE:AGN).

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Jon Dorfman of Napier Park Global Capital

At the end of the third quarter Allergan plc Ordinary Shares (NYSE:AGN) was the most popular stock among the funds followed by Insider Monkey and Napier Park likes it as well, having made it the third-largest bet of the firm as of the end of the fourth quarter. In the latest 13F filing, the fund indicated ownership of 28,975 shares, up by 28% over the quarter. According to the same filing, the position is worth a little over $9.05 million. Currently in a merger process with Pfizer Inc. (NYSE:PFE), Allergan plc Ordinary Shares (NYSE:AGN) was heavily courted by Valeant Pharmaceuticals Intl Inc (NYSE:VRX) in 2014, which offered as much as $53.3 billion for the company, but Allergan’s management rejected the proposed deal as being too risky. The company was then acquired by Actavis, another pharmaceutical company, for $66 billion, which decided to use Allergan’s name for the newly-formed entity. Less than a year after the merger, Pfizer came knocking, as the U.S drug manufacturer was looking for a deal that would help it change its fiscal domicile and take advantage of Ireland’s lower tax rates.

Humana Inc (NYSE:HUM) is a new addition to the equity portfolio of Napier Park. During the fourth quarter, O’Brien and Dorfman bought a total of 30,000 shares worth in excess of $5.35 million at the end of December. Although Humana Inc (NYSE:HUM) shares ended 2015 up by 23% for the year, it is important to note that the stock was up by 51% year-to-date at the end of May. Since then the stock has been in a downtrend, which has spilled over into 2016, with shares down by 9.3% this year. Humana Inc (NYSE:HUM) reported fourth quarter financial results yesterday, missing analysts’ estimates. Revenue came in at $13.36 billion, below the consensus of $13.48 billion, while earnings stood at $1.45 per share when adjusted for non-recurring costs, while analysts were looking for $1.46 per share.

On to other sizable moves: O’Brien and Dorfman boosted their stake in Media General Inc (NYSE:MEG) by 64% during the quarter, taking it to 486,200 shares valued at approximately $7.85 million. The company is set to announce its fourth quarter results on February 26 and analysts are forecasting revenue of $372 million and earnings of $0.22 per share. Media General Inc (NYSE:MEG) has been in the middle of a merger soap opera as well recently, having agreed in September to acquire Meredith Corporation (NYSE:MDP) for $2.4 billion, only to end up selling itself to Nexstar Broadcasting Group, Inc. (NASDAQ:NXST) after an initial unsolicited offer of $14.50 per share that was later increased to $17.14 per share, valuing Media General Inc (NYSE:MEG) at $4.6 billion.

Turn the page to find out the latest moves made in Napier’s holdings of Alphabet and PJT Partners.