Allergan PLC. (AGN)

The healthcare sector has been the worst sector of the S&P 500 year-to-date, and yet the long-term fundamentals are still very strong. You have a growing global population and an aging population. That means the healthcare system, from a utilization standpoint, is going to continue to be under a lot of pressure regardless of Obama care. The valuation on the healthcare sector in general has not been this low since 2009 and back in 1994 for the past 25 years. They recently sold their generic business to Teva (TEVA-N) and got $40 billion. They are using the cash to buy back debt and to buy back stock. This owns Botox, one of the largest consumer drugs in the world. They are using the cash they got, to make small acquisitions to bolster their drug pipeline. Dividend yield of 1.44%. (Analysts’ price target is $266.11.)

(Top Pick Dec 10/15, Down 37.63%) Everyone got blindsided when the US government stopped the deal with PFE-N. But look at the M&A that has started since the election. He scaled the position back a bit

Very well-managed company. They have some very good in-line products and have been building up the sales force. Has a nice, promotionally responsive product portfolio and are adding salesforce to that, which is typically a good equation. The one risk was the Actavis (ACTA-Q) component, but once they became a part of this company, their behaviour calmed down.

On some of the pharmaceuticals we consistently see some strong volatility, particularly if they lose a trial or their main drugs become generic. Rather than looking at some of these pharmaceuticals, she prefers Biotech’s such as Gilead (GILD-Q) or Celgene (CELG-Q). That is where we are really seeing some of the growth, along with fairly attractive valuations. (See Top Picks.)

(A Top Pick July 11/16. Up 6.4%.) Still one of his biggest holdings. Feels that with the headwinds facing the generics, the branded guys have less of a problem. Trading at a low multiple of about 10-11 times.

(A Top Pick Sept 22/15. Down 11.98%.) There was pressure early this year because the US Treasury stopped their merger with Pfizer (PFE-N). Feels that Brett Saunders, who runs the company, is a genius allocator. He has created more value than just about any other pharmaceutical company in existence. This is a screaming Buy here.

He sees this going into the mid $300 within 12-15 months. They are going to do some deals and they have a fantastic CEO. You don’t know where it is going to be until they do a deal and the earnings accrete. You can be very surprised how fast earnings can accrete when the right deals are done.

There is a catalyst coming any day now. Selling their generics business to Teva Pharmaceutical (TEVA-Q) for $40 billion. $10 billion for buyback, $10 billion to pay down debt and the rest to do some smaller acquisitions. The sentiment around specialty pharmaceuticals has been terrible, so you have a low valuation on a company that should be able to grow their bottom line by double digits.

(A Top Pick July 10/15. Down 21.97%.) As a company, this is one of the better healthcare names, and he thinks it is a very strong name. Unfortunately, healthcare has been under a lot of pressure. Sold his holdings.

(A Top Pick May 6/15. Down 22.37%.) Overall a great company, but there has been a lot of pressure on healthcare for some time. He still holds a very small amount. As a shareholder, you will see money coming back to you. They have a very attractive suite of products.

Thinks there will be continued M&A in that space. They have a nice product portfolio, so they are still likely out there as a possible acquisition.

The ‘hammer’ on candle sticks could be a change of trend. It is hitting an old support level and made a couple of lower highs.

Was going to team up with PFE-N, but were stopped with regulatory intervention. He thinks it is going to $200 easy. The balance sheet is too huge now.

A great company in the pharmaceutical and healthcare space. The whole space has come down a fair bit because of the big run up we have had for the past 5 years. Also, it is going through a big consolidation phase. He has a cautious view on healthcare because of the run-up with a lot of that being due to the M&A activity. He owns much more value oriented companies such as Boston Scientific (BSX-N) which has not had the run-up that the biotechs and pharmaceuticals have had.

Merging with Pfizer (PFE-N), a tax inversion play where Pfizer wants to get offshore to avoid higher US taxes. They are not in the good books of the US legislators, which is a risk. Because of this, he would probably stay clear.