Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Activist Investors Agitating Biotechs Bring Multi-Bagger Returns

By Dave Williamson - Feb 28, 2014 at 7:05PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The success of Carl Icahn has brought increasing focus on activist investors.

Activist investors have garnered increasing attention, as they try to bend health-care company management to focus on maximizing shareholder value.These proxy fights are important for investors, especially in biotech, where buyouts are the preferred outcome to many holdings. 

The success of Carl Icahn's years-long campaign agitating Forest Labs resulted in a successful takeover by generic drugmaker Actavis. Icahn deservedly crowed about a deal that caused a one-day 28% pop, and ended his time as a shareholder with roughly $1.7 billion in net gains. Investors who jumped in following Icahn's initial investment would have seen three-bagger returns. 

In this segment from Market Checkup, The Motley Fool's health-care focused investing show, analyst David Williamson dives into the activist investor trend, highlights recent successes and ongoing fights, and explains why investors need to watch this action carefully.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

VIVUS, Inc. Stock Quote
VIVUS, Inc.
VVUS
Allergan plc Stock Quote
Allergan plc
AGN

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.