The firm, based in New York, raised its stake in Teva, the worst-performing pharmaceutical company in the U.S. in the past year, to 1.8 percent of its $7.75 billion U.S. stock portfolio in the third quarter, according to a filing with the U.S. Securities and Exchange Commission on Nov. 14. This would make it the largest allocation since the fourth quarter of 2010, according to data compiled by Bloomberg.
Teva fell to a two-year low on Nov. 4 after a rift over the company’s future with Chairman Phillip Frost led to the Oct. 30 resignation of Jeremy Levin, who was brought on board as chief executive officer less than 18 months before. Concern its best-selling product, the multiple-sclerosis injection Copaxone, will lose traction as it faces stronger competition is also weighing on the shares.
“Surely it doesn’t hurt to have a large, well-known investor such as Soros take a position,” Timothy Chiang, an analyst at CRT Capital Group LLC, who has a buy rating on the shares, said by phone from Stamford, Connecticut, today.
American depositary receipts of Teva, the world’s largest maker of generic drugs, gained 1.6 percent to $40.63 in New York. The ADRs have returned 6.7 percent, including dividends, in the past 12 months, the worst performance among 31 pharmaceutical companies traded in New York with a market capitalization of at least $20 billion.
Teva, which trades at 8.2 times estimated earnings, is the cheapest stock among the world’s largest pharmaceutical companies. Sales of Copaxone fell in the third quarter to $1.05 billion, the lowest in a year, Teva said on Oct. 31.
Soros, who made $1 billion betting against the British pound in 1992, also bought a new stake in Microsoft Corp. (MSFT) in the third quarter to make the software maker its largest holding by market value. With a net value of $22.9 billion, Soros is the 29th-richest person in the world, according to the Bloomberg Billionaire Index.
The shares were purchased in the three months ended Sept. 30 as Teva fell 3.6 percent.
Susquehanna Financial Group LLLP raised its recommendation on Teva to the equivalent of buy from a hold on Nov. 20.
“While a turnaround at Teva could take time, there is a possibility of significant near-term upside from Copaxone,” Andrew Finkelstein, a New York-based analyst at Susquehanna wrote in the note.
Money managers who oversee more than $100 million in equities must file a Form 13F within 45 days of each quarter’s end to list their U.S.-traded stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold.
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