When controversy erupted over Valeant Pharmaceuticals’ accounting practices last quarter, advisers and investors parted ways over the stock. The Sequoia Fund in particular both suffered large losses due to its outsized position in the company and defended its questioned relationship with a pharmacy, Philidor, and astronomical drug price increases. Last week, Ruane Cunniff, the distributor of the Sequoia Fund, reported that it added more share of Valeant and bought three new stocks during the fourth quarter.
Ruane Cunniff ended the year with 142 positions in its portfolio, valued at $17.6 billion. It has as its top sector health care, which represents 54% of all holdings, followed by financial services at 22% of holdings. The Sequoia Fund in its mid-year letter described its portfolio as containing “market-leading companies that earn high returns on capital, boast strong balance sheets and self-fund their growth.” Continue Reading »