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John Paulson Hits The Jackpot With The Acquisition Of Horizon – Here Are His Top 2 Stocks Right Now

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John Paulson, the billionaire who made his fortune at the height of the credit bubble in 2007 betting on subprime mortgages, has hit the jackpot again. As a major investor in Horizon Therapeutics, Paulson is poised for a $500 million payday, given that Amgen will acquire the biotech in a $27.8 billion deal.

To bring Horizon under the fold, Amgen will pay $116.50 per share in cash. That’s a price 267% higher than the average $31 per share paid by Paulson, who has been a Horizon investor since 2017 and owns about 6.1 million shares of HZNP.

If you have developed your investment strategy to follow Paulson’s moves, you are likely to earn well as well. If you haven’t, here’s an opportunity to take stock of some of Paulson’s other great properties.

We dug in the details on the pair and also ran the indicators through TipRanks database To get to know the feelings of the street towards these names. So, let’s see what they’re up to with Paulson’s holdings and find out why the pair has made it the highest stock at the moment.

bausch health companies (BHC)

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The first large Paulson holding company we’ll look at is Canadian global pharmaceutical company Bausch Health. The multinational healthcare company sells generic and brand-name medicines, with eye health, gastroenterology and dermatology as key points of contact.

Among its best-selling products, you can find Arestin (minocycline HCl), an antibiotic used for procedures related to gingivitis, the insomnia medication Ativan (lorazepam), the chest pain remedy Cardizem and the depression treatment Wellbutrin XL (bupropion hydrochloride).

Despite boasting a long list of commercially available products, BHC stocks have had a tough time this year after plunging to their lowest levels in 25 years. Shares have fallen 72% in 2022, with the slide starting in May after a very disappointing second-quarter report.

The most recent financial statement, for the third quarter, wasn’t much to shout about. Revenue fell 2.8% year-over-year to $2.05 billion, while earnings per share fell at $0.76 from consensus estimates of $0.78. As for the outlook, the company lowered its full-year guided revenue range from $8.05-$8.22 billion to between $8.0-8.17 billion. The consensus for this number was $8.11 billion.

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The company was also going through a restructuring, after it announced a bid for its Bausch + Lomb eye care business. The IPO went public earlier this year, but the chapter is yet to be completed.

Anyway, Paulson seems to be a huge fan. BHC stock makes up 13.33% of its portfolio, showing ownership of over 26.4 million shares, currently valued at more than $203 million.

Stifel analyst Annabelle Simi She also remains in Bausch’s corner and believes the BHC story has better days ahead.

“Under the new management, Bausch Health has been carrying out non-core asset divestitures while prioritizing debt repayment and reinvesting internally in growth concessions,” the analyst explained. Specifically, the company is focused on stabilizing its core franchises through sales infrastructure and new launches. We believe that as BHC demonstrates its stabilization and conversion success, the market will once again give the company a proper value for its franchises, which, in our opinion, have been overwhelmed by negative sentiment.”

Accordingly, Samimy rates the stock as a Buy while its $14 price target indicates that it is undervalued at 82%. (To watch track record, click here)

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According to TipRanks, the consensus on Wall Street is that BHC stock is a “hold” for investors. But TipRanks might also have said “buy” — because, on average, analysts think the stock, currently at $7.71, could advance to $14.40 within a year, providing an 87% dividend yield for new investors. (See BHC stock forecasts on TipRanks)

Bright Safir Investment Group (BSIG)

The next stock to take up a lot of space in Paulson’s portfolio is BrightSphere Investment Group, a global asset management holding company with one subsidiary under its arm – Acadian Asset Management. As of the end of September, the company boasted about $83 billion in assets under management. Via Arcadian, BrightSphere gives institutional investors access to a broad range of quantitative and solution-based strategies with the company investing in the public equity, fixed income and alternative investment market.

The company struggled in 2022, with a lower revenue tally over the year. In the latest third-quarter report, revenue declined sequentially and also decreased by 26% compared to the same period last year to $86.8 million, while the company presented earnings per share of $0.30, and also showed a quarterly decline. It should be noted, however, that both results exceeded the Street’s expectations.

However, the drop in performance didn’t seem to bother Paulson. BSIG shares make up approximately 10% of his holdings of 8.95 million shares. At the current price, it’s worth about $176 million.

And if we are talking about acquisitions, then RBC analyst Kenneth Lee He thinks BrightSphere’s recent actions may indicate that some acquisition action may be in the cards here as well.

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“With BSIG pausing share buybacks during the third quarter now (the second consecutive quarter of no buybacks), despite management’s stated goal to continue to deploy spare capital to support organic growth and buybacks, we continue to wonder if management engaged in strategy discussions (which could restrict BSIG from share buybacks), ”said the 5-star analyst.

“We note that management remains open to any potential value-enhancing transaction. In terms of considering a potential acquisition of BSIG, we believe a valuation in the range of $25 to $30 per share is reasonable (9.5 times more normalized ENI stock, plus a potential acquisition premium,” he added. Mine.

Finally, Lee prices BSIG shares with an outperformance (i.e. a buy) supported by a $23 price target, indicating that the stock is set to rise 17% higher over the coming months. (To watch a record of me, click here)

Only one analyst has looked at BSIG’s review, and they’ve stayed on the sidelines, giving this stock a Medium Buy consensus rating. (See BSIG stock forecasts on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best stocks to buya newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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Stock, bond and cryptocurrency investors remain on edge after a rough year for the markets

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This version is for personal, non-commercial use only. Distribution and use of this material is subject to our Subscriber Agreement and copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.

https://www.wsj.com/articles/stock-bond-and-crypto-investors-remain-on-edge-after-brutal-year-for-markets-11672403124

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Dow Jones losses are heading towards the closing bell as US stocks approach their worst year since 2008

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US stocks were trimming losses heading towards the closing bell on Friday, but were still on track to post their worst annual loss since 2008, as the harvest of tax losses combined with concern over the outlook for US corporate and consumer earnings took its toll.

How are stock indices traded?
  • Dow Jones Industrial Average
    DJIA,
    -0.22%

    It fell about 182 points, or 0.6%, to 33,039 points.

  • S&P 500 index
    SPX,
    -0.25%

    It fell nearly 26 points, or 0.7%, to about 3,824.

  • The Nasdaq Composite Index fell 72 points, or 0.7%, to about 10,406 points.

Stocks posted their biggest gains of the month on Thursday, with the Dow Jones rising 345 points, or 1.05%, to 33,221 as major stock indexes rebounded after losses incurred earlier in the week that pushed the Nasdaq Composite to a new closing low for the year. . The S&P 500 was on track on Friday to wrap up its fourth consecutive losing week, the longest streak of weekly losses since May, according to FactSet data.

What drives the markets

US stocks traded lower on Friday afternoon, on pace to close the last trading session of 2022 with weekly and monthly losses.

Stocks and bonds have been crushed this year as the Federal Reserve raised its benchmark interest rate more aggressively than many expected, as it sought to crush the worst inflation in four decades. The S&P 500 is on track to end the year with a loss of nearly 20%, its worst annual performance since 2008.

“Investors were on edge,” Mark Heppenstahl, chief investment officer at Penn Mutual Asset Management, said in a phone interview Friday. “It seems as if being able to bring prices down might be a little easier given how bad the year has been.”

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Stock indices have fallen in recent weeks as the recent rally inspired by hopes in the Fed’s policy focus faded in December after the central bank indicated it would likely wait until 2024 to cut interest rates.

On the last day of the trading year, the markets were also hit by selling to capture losses that could be written off from tax bills, a practice known as tax harvesting, according to Kim Forrest, chief investment officer at Bouquet Capital Partners. .

Forrest added that an uncertain outlook for 2023 has also weighed in, as investors worry about the strength of corporate earnings, the US economy and consumer as the fourth-quarter earnings season approaches early next year.

“I think the Fed, and then earnings in mid-January — they’ll set the tone for the next six months. Until then, it’s anyone’s guess.”

The US central bank has raised its benchmark interest rate by more than four percentage points since the start of the year, pushing borrowing costs to their highest levels since 2007.

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The timing of the first Fed rate cut will likely have a significant impact on markets, according to Forrest, but the outlook remains uncertain, even as the Fed tries to signal that it plans to keep interest rates higher for longer.

On the economic data front, the Chicago PMI for December, the latest major data release for the year, Came stronger than expected. Climbing to 44.9 from 37.2 in the previous month. Readings below 50 indicate contraction.

In the coming year, Heppenstahl said, “we are likely to shift toward concerns about economic growth rather than inflation.” “I think the decline in growth will eventually lead to an even greater drop in inflation.”

Read: Stock market investors face 3 recession scenarios in 2023

Eric Sterner, chief information officer at Apollon Wealth Management, said in a phone interview on Friday that he expects the US to fall into a recession next year and that the stock market could see a new bottom as companies likely review their earnings. “I think the earnings outlook for 2023 is still very high,” he said.

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The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were all on pace Friday afternoon posting weekly losses of around 1%, according to FactSet data, at last check. For the month, the Dow was down about 5%, the S&P 500 was down about 7% and the Nasdaq was about to crash down about 10%.

Read: Value stocks are outperforming growth stocks in 2022 by a large margin historically

As for bonds, Treasury yields rose on Friday as the US sovereign debt market was set to post its worst year since at least the 1970s.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.879%

It rose about four basis points on Friday at 3.88%, according to FactSet data, in the latest check. Ten-year yields jumped about 2.34 percentage points this year through Thursday, on track for the biggest annual gain ever based on data going back to 1977, according to market data from Dow Jones.

Meanwhile, the yield on the two-year note
TMUBMUSD02Y,
4.423%

Up about 3.64 percentage points in 2022 through Thursday to 4.368%, 30-year return
TMUBMUSD30Y,
3.971%

It jumped 2.03 percentage points over the same period to 3.922%. That marks the largest increase in a calendar year for each based on data going back to 1973, according to market data from Dow Jones.

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Outside the US, European stocks capped their biggest percentage drop in a calendar year since 2018, with the Stoxx Europe 600
xxxp,
-1.27%
And the
It is an index of euro-denominated stocks, down 12.9%, according to market data from Dow Jones.

Read: A downturn in the US stock market is trailing these international ETFs as 2022 draws to a close

Companies in focus

Steve Goldstein contributed to this article.

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Fed’s reverse repo facility reaches $2.554 trillion by Reuters

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© Reuters. FILE PHOTO: The Federal Reserve Building in Washington, US, January 26, 2022. (Reuters)/Joshua Roberts/File Photo

Written by Michael S Derby

NEW YORK (Reuters) – A key facility used by the Federal Reserve to help control short-term interest rates saw record inflows on Friday, the last trading day of the year.

The New York Fed said its reverse repo facility took in $2.554 trillion in cash from money market funds and other eligible financial firms, beating the previous high seen on Sept. 30, when inflows totaled $2.426 trillion.

The cash rally was almost certainly tipping into record territory in the usual end-of-quarter pattern that could worsen further towards the end of the year. On those dates, for a variety of reasons, many financial firms prefer to deposit money in the central bank rather than in the private markets.

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The Fed’s reverse repo facility has been very active for some time. After seeing almost no absorption for a long time, money began to gravitate toward the central bank in the spring of 2021 and then grew steadily. Daily reverse repo usage has been steadily above the $2 trillion mark since June.

The reverse repo facility takes cash from qualified financial firms in what is an actual loan from the Federal Reserve. The current rate is 4.3%, a yield that is often better than rates for short-term private sector lending.

The reverse repo facility is designed to provide a soft floor for short-term rates and the federal funds target rate, and is the Fed’s primary tool for achieving its function and inflationary mandates. To mark the higher end of the range, the Fed is also pushing deposit-taking banks to deposit cash at the central bank, where the interest rate on reserve balances is now 4.4%.

The federal funds rate is currently set between 4.25% and 4.5% and is trading at 4.33% as of Friday, sandwiched between the reverse repo rate and interest on reserve balances.

There are no signs of shrinkage

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Even with the heavy use of reverse repo, Fed officials have always remained unconcerned about large outflows, even as some in financial markets worried about the potential for the Fed to drain the borrowing and lending lives of private money markets.

Fed officials also expected that as the central bank continues to raise interest rates with the goal of bringing down very high levels of inflation, the use of the reverse repo facility should decrease. But that hasn’t happened yet, and some in the markets now believe that the consistently high utilization of the Fed facility will be around for some time to come.

Research by the Federal Reserve Bank of New York indicated that banking regulation issues make demand for the Fed’s reverse repo instrument high. Meanwhile, the Kansas City Fed added its view that large inflows are related to limited private market investment opportunities and policy uncertainty.

Strong cash flows to the central bank may not have alarmed central banks, but they have driven their operations to an actual loss. The Federal Reserve finances itself through interest on the bonds it owns as well as the services it provides to the financial community. It usually makes a noticeable profit and by law returns it to the treasury.

Currently, the cost of paying interest on reverse repo agreements and reserve balances outweighs income. The Fed reported Thursday that as of Dec. 28, the accounting metric it uses to track losses was $18 billion. Many observers expect that the Fed’s plans to raise interest rates further and keep them at high levels will mean fairly large losses for the central bank over time, even if these losses will not affect the action of the Fed’s monetary policy.

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