Look Who’s Been Buying Valeant

This is more of a matter of gawking at the sheer ferocity of the market than mocking fund managers for making really bad investments. The events that have transpired in VRX over the past 3 months, with shares dropping 70%, is nothing short of spectacular fuckery on a grandiose scale.

Andreas Halvorsen’s Viking Global Investors, long a top performing fund, bought 376,615 Valeant shares sometime between July and the end of September to own 4.9 million shares at the end of the quarter, according to a filing made on Monday.

Brahman Capital raised its stake by 958,300 shares to own roughly 4 million shares while Hound Capital bought an additional 1.2 million shares, making Valeant the fund’s biggest position with nearly 4 million shares, the filings show.

Marble Arch, Blue Mountain, Farallon and Adage also spent more money on Valeant during the summer months after Valeant became one of the market’s best performers during the first half of the year, notching gains on an aggressive acquisition strategy.

The notable fund missing from this pastiche, of course, is William Albert Ackman’s Pershing Capital. He made sure to buy more, upping his stake to 21 million shares–because 19 million simply wasn’t enough.

Seriously, he’s too old for this shit. I hate to see the elderly abused like this. I much prefer to do it myself, tossing them into traffic strapped inside of their wheeled chairs. Truth is, T. Boone is a boss. But life is cruel and unforgiving. Even the best of us go through downturns. It’s unfortunate, that in the latter years of his life, he’s going through his–thanks to fuckery largess.

Billionaire investor T. Boone Pickens reversed course in the third quarter by slimming down his energy holdings as the worst oil market downturn in decades drags on longer than many expected.

The value of energy holdings in his Dallas-based TBP Investments Management fund fell by more than half in the quarter to $35.6 million, according to data compiled by Bloomberg. The fund exited stakes in 13 companies including smaller oilfield contractors Pioneer Energy Services Corp., C&J Energy Services Ltd. and Patterson-UTI Energy Inc. It also sold off smaller positions in exploration companies Apache Corp. and Occidental Petroleum Corp.
Many of the positions Pickens’ fund sold were stakes it had bought in the second quarter.

The fund added stakes in three new exploration companies: Whiting Petroleum Corp., PDC Energy Inc. and Synergy Resources Corp.

Say a prayer to one of your Dennis Gartman statues tonight, in the hopes of a V-shape recovery for old Pickens.

The damage to the retail sector has been extensive and also draconian. We all hate retail stocks, shopping malls and restaurants. We’ve become a hermit class of people who hole themselves up in our Mcmansions, grilling chicken in secrecy, ordering wares online. Human interaction is something of the past, things people did in the 80’s and 90’s, for old people.

The cycle of life is perpetual and what’s hated now will be loved later. I am sure most of you hated NFLX at $60, HLF at $25 and you all bought oil at $140.

Thanks to the Market Intelligence Platform known to you as Exodus, I am able to quantify the valuations of the retail sector to determine whether or not they are cheap, from a historical standpoint.

One industry that isn’t 2008 cheap, but instead 2012, are the restaurants. I’d ask that you look at the median p/s ratios for all of the data I am about to display.

Textiles and Footwear are the cheapest in a decade.

Apparel stores are cheapest since 2008.

Grocery stores are cheap as fuck. Judging by this, Americans are dieting. We both know that shit isn’t true.

Specialty retail are 2008 cheap. No one gives a flying fuck about them.

What the fuck is going on here? Is Amazon bankrupting the entire economy? This looks like the gloomiest shit I’ve ever seen. These valuations are retardo cheap, pricing in absolute and a very resolute collapse.

On the restaurant end, I’ve been pointing out to the massive spike in valuations. I even had my guys doing the Exodus demos point this out to people. By the way, if you need a demo, email me.

This is a classic under promise heading into the best time of year for the sector. If they were entering the X-mas season with big dicked gains, I’d be reticent about posting such an egregious article. However, all these morons have to do to avoid disappointment, from my vantage point, is open up the god damned stores. Investors are treating retail as the misfit asset class of the U.S. economy, tossing them into the flaming trash bin and writing them off as bankrupt.

I was reading an article on Reuters today and it really resonated, discussing share buybacks. As shareholders, we all like them, mainly because we think they’re going to increase shareholder value.

But are they?

Corporations are now spending more on buybacks and dividends than net income. WTF?

You know the guilty parties: IBM, HPQ, as well as scores of other failures. These CEOs are simply golfing all day, buying back their own shares, firing workers, then having their lunches eaten for them by competitors. I have to believe HP would’ve been FAR better off spending all of that money on innovation or accretive aquisitions.

Now we have all of these fucktard activist shareholders demanding large buybacks, simply to make a quick buck. All the while, innovation is being stifled. Apple and Samsung are innovating plenty. But, you have to admit, the vast landscape of former tech heavy weights is dwindling down to a select few.

The financialization of America is at hand. Get off the golf course you lazy fuckers and into the boardroom.

I know you want to discuss stocks. They did great today, up more than 200 and for the first time in a week, I wasn’t tortured at the Catherine Wheel. But, without stability through safety, we can never enjoy market premiums.

So, I am going to broach the subject of Syrian migrants. President Obama wants to take in at least 65,000. Since the Paris attacks, multiple US governors have lined up against it and said they’d refuse their entry into their states. You have to love our founding fathers for setting up the government this way, state’s rights ans all.

Here are the state’s against allowing Syrian migrants into their fiefdoms.

Naturally, Donald Trump chimed in, shaming Germany’s Merkel for allowing zombie hordes into her country. Trump also said, if elected President, he’d expell any Syrian migrants who were allowed in under Obama.

I did a poll on Twitter and asked the question: Should we Allow Syrian Migrants into the U.S.?

Suprinsingly, 38% of you lunatics said yes, even after the Paris attacks. You people are going to kill us all.

This is making the rounds today. Apparently, SUNE is trying to pull a fast one on the market by reclassifying $700 million in debt from non-recourse to recourse.

Here’s CreditSights:

When updating our SunEdison debt tracking spreadsheet we noticed SunEdison subtelety [sic] reclassified its $403 million Margin Loan and $336 million Exchangeable Notes as suddenly recourse switching … from the non-recourse disclosure used in the [second quarter of 2015] 10-Q filing. We are not accountants and realize this might be sufficient disclosure but we are fairly confident many investors missed the dropped foornote “(a)” … It is also entirely possible this is just a typo but since SunEdison stopped returning our emails and phone calls over a month ago we have no way to confirm this.

None of this has been confirmed and it’s not a smoking gun until someone gets shot. Well, judging by the share performance, one could argue that lots of people have been shot long this steaming pile of shit.

I am not known to the most optimistic person in the world. I think my mood soured this morning when I saw the CAC outperforming our markets. But this rally is impressive. The Dow is up 185, S&P up 22 and the NASDAQ is higher by 43.

In the big scheme of things, this was expected, following a biblical styled drubbing, which by the way, caused another oversold signal by Exodus. That has proved out to be a win.

Stocks are heading higher, squeezing the ugly faces of bears. Oil is up almost 3% and the world is a better place with higher stock prices.

The only small caveat to this rally is the armaggedeon styled drop in retail stocks, ahead of the joyous holiday season. Oh, by the way, URBN bought a fucking Italian restaurant chain today. Makes so much sense. Synergies galore!

Ciao

We can’t keep recycling old leaders and expect them to lead us to the promise land. For the past year or so, biotechs have led the charge. The only problem with biotechs, as I’ve stated here over and over again, is that they’re fantasy. The only reason why they gained so much, similar to the dot coms of yesteryear going up on page view data, was because they were shrouded in mystery.

Here are the gainers over the past week.

Most of the above names are biotech. A novice investor sees that and piles into CLVS, before today’s annihilation, and his investment career is seelingly over in a blink of an eye.

If this market is ever going to become healthy again, it needs real leadership, in real companies that produce real profits, not imaginary 2025 horseshit projections.

Some ideas that come to mind: banks, especially the regionals.

Since China is dead, the industrials and commodity complexes are dead, as evidenced by today’s drop in copper, pushing it to 2009 lows.

What about the homebuilders?

I realize hipsters prefer to live out of garbage cans; but with the dollar strong and our economy stable, one might surmise the real estate boom that is live in most U.S. metropolis’ will expand into secondary and third tier cities.

Or, the reason why I am pulling for staws, trying to find a knight in shining armor, the sector to save all sectors, is because there isn’t one. We’re fucking doomed. Nothing can be done. And, that’s all there is to it.

NOTE: Last call for iBC Conference Online. It starts tonight!

European markets had shrugged off the Paris attacks, up until US markets began warming up to open. Crude reversed a 2% gain and then our futures slumped. CLVS dropped 60%; the CAC slipped back into negative territory; and that’s all she wrote.

U.S. markets are 100% shit. Literally, any other market is better. It’s filled with horseshit tech companies that are designed to go lower. We are laden to the gills with soon to be bankrupt shale oil plays. And, on top of that, any person with a degree in medicine, and a little VC money to boot, has a publicly traded biotech company here–eagerly awaiting to get EXECUTED by the FDA–taking their naive shareholders with them.

Let’s not even broach the subject matter of expensive casual dining companies or the myriad of smoke and mirror financials we have here too.

On top of all that, we have like 3 companies that are at the epicenter of American deflation: AMZN, AAPL and WMT. This trio of deflationary vortex cannot be stopped. They’re so big, so pervasive, they affect the very fabric of every Americans existence.

Come to think of it, it’s rather amazing how big those companies have become, unimpeded by anti-monopoly jargon. I cannot recall anyone every mentioning how Apple’s size was potentionallly bad for American industry, overall. Sure, they make great phones and they have cool tech; but they’re the fucking borg and you know it.

I’m expecting pain, misery on loop today.

NOTE: I will be taking on another 5 bloggers in the new Peanut Gallery after this week. If interested, email me at [email protected] and be sure to let me know your Twitter handle.

This company hardly does any revenue, despite its $3 billion market cap.

On news that the FDA is calling bullshit on one of their drugs, the stock is down a fucking lunatic styled 60%

“We remain confident in rociletinib and its potential to treat patients with mutant EGFR T790M-positive lung cancer, said Patrick J. Mahaffy, President and CEO of Clovis Oncology. “We will continue to work diligently with the FDA on our NDA submission.”

In the Mid-Cycle Communication meeting, the FDA emphasized that its efficacy analysis would focus solely on confirmed responses. The New Drug Application (NDA) submitted by Clovis to the FDA contained immature data sets based on both unconfirmed response rates and confirmed response rates. These data sets were updated in the 90 day efficacy update the Company submitted at the end of October.

As the rociletinib clinical trials were rapidly enrolling, Clovis presented interim data publicly and at medical meetings and these data therefore included a data set based primarily on unconfirmed responses. This was also true of the Company’s Breakthrough Therapy designation submission. In the Company’s NDA submission, both immature confirmed and unconfirmed response analyses were submitted. As the efficacy data have matured, the number of patients with an unconfirmed response who converted to a confirmed response was lower than expected.

In the intent to treat analysis of the 79 patients in the 500mg dose group, the current confirmed response rate is 28 percent, and 34 percent in the 170 patients in the 625mg dose group, with an encouraging duration of response in both doses. The most frequent reasons that patients’ responses were not confirmed in a subsequent scan were due to progression, often due to brain metastasis, and due to subsequent scans not demonstrating tumor shrinkage greater than 30 percent.

Biotech’s like this are nothing more than pinless hand grenades being tossed around the party. Last man left holding it gets his arms blown off for him.