Mittleman Brothers Investment Management, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. The Mittleman Global Value Equity Fund (MGVEF) declined 13.1% in Q1 2022, vs. a decline of 8.4% in the MSCI ACW Net Total Return Index. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Mittleman Global Value Equity Fund mentioned Bayer Aktiengesellschaft (NYSE:BAYRY) and explained its insights for the company. Founded in 1863, Bayer Aktiengesellschaft (NYSE:BAYRY) is a Leverkusen, Germany-based multinational pharmaceutical and life sciences company with a $65.8 billion market capitalization. Bayer Aktiengesellschaft (NYSE:BAYRY) delivered a 23.41% return since the beginning of the year, while its 12-month returns are up by 1.51%. The stock closed at $15.56 per share on May 09, 2022.
Here is what Mittleman Global Value Equity Fund has to say about Bayer Aktiengesellschaft (NYSE:BAYRY) in its Q1 2022 investor letter:
“Bayer’s defensive business mix, along with prodding for change from an activist investor, seemed to catalyse the stock’s outperformance during Q1 2022, and MIM envisions significant further upside. MIM hasn’t owned a large cap pharmaceutical company since a very successful foray into Pfizer (PFE) just over 10 years ago, when the market was overly concerned about their “patent cliff” with their patent on Lipitor (then the world’s best-selling drug) expiring in 2011. The stock got too cheap, revenues didn’t collapse, and MIM made a very nice return in less than one year. MIM hopes to reprise that experience with its recent purchase of Bayer, where fears of a patent cliff combined with a major product liability settlement have created a similar scenario (recall Merck and its $5B Vioxx settlement in 2007, Merck shares more than doubled off their 2005 lows leading into that settlement). Bayer’s stock entered the portfolio in late December 2020/early January 2021 and promptly went nowhere for the duration of 2021. The price had been ravaged for years by having overpaid for their 2018 acquisition of Monsanto for $67B (15x EBITDA of $4.5B) and then having that same acquisition subject them to massive product liability settlements (over $10B+) from Monsanto’s Roundup herbicide, which many have claimed caused them to get cancer. As of 31 December 2017, Bayer (pre-Monsanto) had an enterprise value of $108B, about 10x EBITDA of $11B. Today, with Bayer’s ADRs at $17.12, the EV for the combined entity is again $108B, but that’s only 7.5x the $14.5B in EBITDA estimated for 2023…” (Click here to see the full text)
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Our calculations show that Bayer Aktiengesellschaft (NYSE:BAYRY) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Bayer Aktiengesellschaft (NYSE:BAYRY) delivered a 9.41% return in the past 3 months.
In February 2021, we published an article that includes Bayer Aktiengesellschaft (NYSE:BAYRY) in 5 Biggest Pesticide Companies In The World. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
