Following Dan Loeb: Mylan (MYL) - A Cheap Drug To Own
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Today we want to take a look at Mylan, Inc. (NYSE: MYL), a stock Third Point LLC, a $4.5 billion hedge fund run by activist investor Daniel Loeb, just raised their stake in from 2,150,000 shares to 3,150,000 shares. (Note: The company reports results after the close)
Loeb's firm now owns just over 1% Mylan's shares outstanding.
Mylan is the world's third largest generic drug company. Shares have suffered significantly over the last year, down nearly 40%.
Here is why long-term value oriented investors may be wise to follow Loeb on this trade.
1. Besides Loeb, there are many other notable investors that also recently became involved in the stock and it could become an activist target (Maverick Capital, SAC Capital, etc).
2. Potential takeover target.
3. A number of leading drugs recently came off or are coming off patent. Mylan will profit from selling the generic version.
4. Possible short squeeze. About 20% of the float is being sold short.
5. Valuation. The stock looks cheap on a number of valuation metrics.
You can follow all the latest breaking news on Daniel Loeb here: http://www.streetinsider.com/entities/Daniel+Loeb
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