John Paulson Betting On Healthcare And Consumer Discretionary Stocks

Paulson & Company is a hedge fund managed by John Paulson, who many might remember for his famous stakes against subprime mortgages. The firm tends to invest across most sectors of the economy.

In its recently filed Form 13F for the second quarter of the year, the fund disclosed seven new stock positions, 15 additional purchases, 19 trimmed bets and the closing of seven of its preexisting stakes. The value of the equity portfolio surged over the quarter, from $19.64 billion to $21.68 billion.

In terms of allocation, the firm has a penchant for healthcare stocks, which account for roughly 44 percent of the portfolio’s total value; consumer discretionary stocks, accounting for another 20 percent, are also popular.

The fund’s largest bet in the second quarter was placed on Allergan PLC AGN, which escalated one spot in the list over the period, displacing Shire PLC (ADR) SHPG from the front-runner position. Following a 27 percent increase in the firm’s stake, Paulson disclosed ownership of 7,174,200 shares of Allergan, worth more than $2.1 billion, which account for roughly 2.6 percent of the total shares outstanding.

This stake situates Paulson among the top 10 institutional investors in the company, outranked however by a few firms like the Vanguard Group, which last said to hold 22,182,589 shares, and T. Rowe Price, with 21,666,750 shares – both of these stakes represent more than 8 percent ownership.

Second in Paulson’s list is a stock that may have experienced the firm’s bullishness like no other in the quarter. Between April and June, the fund acquired 6,950,000 shares of Valeant Pharmaceuticals Intl Inc VRX, taking its holdings to nine million shares, worth almost $2 billion.

The firm can again be counted among the top 10 institutional investors in the company.

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Among new stakes, Starwood Hotels & Resorts Worldwide Inc HOT was king. After having purchased 11,999,400 shares over the second quarter, Paulson & Co. is the largest institutional investor of record in the company, trailed by OZ Management, which disclosed ownership of 10,171,523 shares as of August 10.

On the bearish side, there’s financial holding company Popular Inc BPOP. As of the end of the first quarter, the fund held 4,739,600 shares of the company, worth approximately $162 million. However, it disposed of all of its shares over the second quarter, same as Debra Fine’s Fine Capital Partners, Tom Wagner and Ara Cohen's Knighthead Capital Management, and Victory Capital Management, which sold all of their 1,301,792 shares, 939,296 shares and 704,414 shares, respectively, over the period.