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A Top Investor Has 5 Percent Of His Fund In This Stock - Here Is His Full Investment Case


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One fund that we do keep an eye on is the Bronte Amalthea Fund which is run by the entertaining (and very smart) John Hempton. In his December investor letter he provided his full investment case on a new position.

Image result for john hempton

Source: Sydney Morning Herald

Here is is in his words:

We have added one new big position to the portfolio in the last quarter. We now hold a 5 percent position in Bayer (OTCPK:BAYRY) - the largest company in the German index. Bayer has four and half businesses which they collectively call "life sciences" but in fact fit into no specialist portfolio.

These businesses are:

-A large second tier pharmaceutical company which has a few major drugs, on which they have partnered,

-A large over-the-counter (OTC) medical products business - which they (plausibly) argue is the biggest in the world,

-A moderately large seed technology business

-A moderately large animal health business.

The half business is a majority stake in Covestro - Bayer's old materials business.

The whole contraption trades for between 2 and 2.5 times revenue depending on how you net out Covestra. This is really cheap for this type of businesses. Ultimately most of these are pretty good businesses that earn high margins, should earn even higher margins and normally trade at bigger multiples.

You can read the full write-up here.

About The Superinvestor Bulletin

We just released our latest idea (a healthcare company), which represents a staggering 15 percent of the portfolio of a world-class activist investor who has averaged 20% annualized returns.

With the activist investor providing the catalyst to realize value, we believe that this company would be a great one to own should the market find itself in a correction.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.