Shares of Valeant Pharmaceuticals International fell to
their lowest closing price of the year after Morgan Stanley cut
its price target on the drug company from $17 to $12. In a note
to clients, the investment bank said it expects 2017 estimated
cash flow to "fall below guidance due to divestitures" and 2018
cash flow "to decline slightly due to generic pressures."
Meanwhile, Valeant announced a $2.5 billion debt offering
that’s part of a previously planned refinancing
and amendment of its existing credit agreement. The company
said it will use proceeds from the offering and a new term loan
to repay debt and to finance a tender offer to buy up to $600
million of its 6.75 percent senior notes due 2018. Shares of
Valeant fell 2.7 percent to close at $11.56. The stock is now
down 20 percent for the year and has dropped more than 31
percent from its 2017 high. As we earlier reported, in the
fourth quarter John Paulson’s Paulson and Co.
remained the largest investor with nearly 19.4 million shares.
Bill Ackman’s Pershing Square Capital Management,
the second-largest shareholder, pared its stake by 16 percent,
or nearly 3.5 million shares, to a little more than 18.1
million shares. Jeff Ubben’s ValueAct Capital
remained the third largest shareholder, while PointState
Capital sold all of its roughly 8.5 million shares.
Shares of hedge fund favorite Tailored Brands fell by more
than 32 percent to $15.84 after Mizuho Securities downgraded
the men’s clothing retailer from Buy to Neutral
and cut its price target from $25 to $18, according to
published reports. The stock is now down 62 percent from its
December 21 high. The company was formerly known as
Men’s Wearhouse, a one-time activist target of
Ricky Sandler’s Eminence Capital Management, the
largest shareholder at year-end. On January 30 Eminence bought
an additional 1.11 million shares for $20.05 per share,
boosting its stake to 14.9 percent. At year-end, Larry
Robbins’ Glenview Capital Management was the
fourth largest shareholder.
Blue Harbour Group sold more than 5.27 million shares of BWX
Technologies, or nearly half its stake on March 7 for $45.67
per share. This leaves the activist hedge fund headed by Cliff
Robbins with 5.3 percent of the supplier of nuclear components
and fuel to the U.S. government.
Two hedge funds managed by Bienville Capital Management
extended their already-strong gains in February. The Bienville
Brazil Opportunities Fund LP rose 6.2 percent last month and is
now up 15.7 percent for the year. It invests in Brazilian
equities, mostly mid-sized companies. The Bienville Argentina
Opportunities Fund gained 1.7 percent in February and is now up
16.6 percent for the year. The fund invests in Argentine real
estate; public securities including financial services, energy,
homebuilders and other sectors; and private equity.
Activist hedge funds surged 2.53 percent in February, making
them the top-performing hedge funds for the month, according to
eVestment. They are up 3.03 percent for the year. By
comparison, the average hedge fund was up 1.08 percent last
month, according to the data collector. In addition, more than
70 percent of funds were profitable for the third straight