QVT Financial Reduces Exposure to Healthcare Going Into 2016; Here Are Its Top Stock Picks

#3 SanDisk Corporation (NASDAQ:SNDK)

– Shares Owned by QVT Financial (as of December 31): 387,805

– Value of Holding (as of December 31): $29.47 Million

SanDisk Corporation (NASDAQ:SNDK) represents a new position in QVT Financial’s equity portfolio. In October, Western Digital Corporation (NASDAQ:WDC) announced that it will be acquiring SanDisk Corporation (NASDAQ:SNDK) for $19 billion in a cash-and-stock deal. Since then, shares of SanDisk Corporation have largely remained range bound, however, they are currently trading down nearly 16% for 2016. The deal is expected to get completed by the end of this year and in case it falls through, Western Digital Corporation will have to pay $184 million to SanDisk as a break-up fee. On February 22, reports emerged that Alken Asset Management, a key shareholder of Western Digital Corporation (NASDAQ:WDC), is urging the company to walk away from this deal arguing that the $19 billion valuation for SanDisk is too expensive. On February 24, analysts at Macquarie reiterated their ‘Neutral’ rating on SanDisk stock, but lowered their price target on it to $70 from $86.50.

#2 Acceleron Pharma Inc (NASDAQ:XLRN)

– Shares Owned by QVT Financial (as of December 31): 640,300

– Value of Holding (as of December 31): $31.22 Million

Acceleron Pharma Inc (NASDAQ:XLRN) saw an impressive rally during the fourth quarter with its shares registering gains of nearly 100%. Due to that, the company emerged as QVT Financial’s second top stock pick at the end of December, even though the fund cut its stake in it by 26% during the fourth quarter. Year-to-date the stock has slid by 50%. On February 25, Acceleron Pharma reported its fourth-quarter results, which included a loss of $0.81 per share on revenue of $3.80 million, which compares to a loss of $0.55 per share and revenue of $3.80 million it disclosed a year earlier. Seven of the eight analysts who cover the stock currently have a ‘Buy’ rating on it and an average price target of $56.25. Billionaire Israel Englander‘s Millenium Management boosted its position in the company by 373% to 702,177 shares during the October-December period.

#1 Equity Commonwealth (NYSE:EQC)

– Shares Owned by QVT Financial (as of December 31): 1.26 million

– Value of Holding (as of December 31): $35.08 Million

Though QVT Financial kept its stake in Equity Commonwealth (NYSE:EQC) unchanged during the fourth quarter, the company became the top stock pick of the fund going into 2016. Equity Commonwealth is turning out to be one of the best-performing real estate investment trust (REIT) in 2016 with its stock trading nearly flat for the year currently, compared to the significant losses suffered by its peers. Shares of Equity Commonwealth has seen a minor rally in the last few days, despite the company reporting worse-than-expected fourth quarter numbers. While the Street was expecting EPS of $0.32 on revenue of $154.44 million, Equity Commonwealth reported EPS of $0.27 on revenue of $138.90 million. David Thomas‘ Atalan Capital initiated a stake in Equity Commonwealth during the fourth quarter by purchasing 675,000 shares of the REIT.

Disclosure: None