This content is from: Portfolio

The Morning Brief: Valeant Pops on Hiring of Zoetis CFO

Shares of Valeant Pharmaceuticals International surged nearly 9 percent on Monday to close at $31.27 after the struggling drug maker named Paul Herendeen as its new chief financial officer, replacing Robert Rosiello. The change is effective immediately. Herendeen had spent the past two years as CFO of Zoetis, which specializes in animal health. The appointment is not too surprising. Remember, William Ackman’s Pershing Square Capital Management is not only the largest shareholder of Valeant, but the New York activist is also the third-largest shareholder of Zoetis, a position it established two years ago. Shares of Valeant are now up nearly 50 percent since their August 1 close. Pershing Square is down 17.8 percent for the year through mid-August.

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Shares of hedge fund favorite Medivation, a cancer-drug developer, surged nearly 20 percent to $80.43 on Monday after the biotechnology company agreed to be acquired by Pfizer for $14 billion. At the end of the second quarter, at least 23 hedge funds included Medivation among their top-10 holdings, more than all but 16 other stocks tracked by Goldman Sachs. For example, Medivation is the second-largest individual U.S.-listed stock holding of New York-based York Capital Management, the third-largest shareholder. The stock is also the third-largest individual U.S.-listed stock holding of New York-based Tourbillon Capital Partners, which is the fourth-largest shareholder of the drug outfit. Another high-profile hedge fund firm that includes Medivation among its top-10 U.S. stock holdings is New York-based Eton Park Capital Management.

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Melvin Capital Management disclosed that it established a stake of 2.5 million shares of YY Inc., or 6.5 percent of the Chinese social media company. In addition, Melvin sharply boosted its stake in Summit Materials by nearly 75 percent to 3.85 million shares, or 5.06 percent of the owner of building-materials companies in the aggregates, concrete, cement, asphalt paving and construction industries. Both positions were disclosed in separate 13G filings, suggesting they are passive investments. New York-based Melvin was founded in late 2014 by SAC Capital alum Gabriel Plotkin.

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Managed futures portfolios rose 0.37 percent in July and are now up 2.12 percent for the year to date, according to the Barclay CTA Index. Five of Barclay’s eight CTA indices posted positive returns in July. “July’s global equity rally proved to be the major source of profits for many CTA portfolios,” says Sol Waksman, founder and president of BarclayHedge, in a press release. “On the commodity side, long precious metals and short energy positions were profitable, but overall profits were eaten up by losses in the ag markets.” He also points out that currency traders positioned for continued strength in the U.S. dollar were hurt last month when the dollar weakened against the euro, Swiss franc and Chinese yuan.

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