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Value Investor
Wealth Building Opportunites for the Active Value Investor

May 12, 2020

Crista updates us on two stocks, one in the portfolio and one that she has recommended in the past year.


Alexion Pharmaceuticals (ALXN) rises on activist investor agitation.
Brighthouse Financial (BHF) soars on great first quarter results.


Alexion Pharmaceuticals (ALXN) is rising this morning because activist investor Elliott Advisors wrote yet another letter to the Board of Directors, urging them to explore a sale of the company. Elliott Advisors believes that the stock is 50%-60% undervalued, and does not have confidence that the Board is taking the company in the right direction, as evidenced by their belief that Alexion should not have pursued the recently announced purchase of Portola Pharmaceuticals.

Management will be speaking at the Bank of America Healthcare Conference today at 1 PM ET. You may listen to the webcast, where you might hear comments about Elliott Advisor’s current round of activism.

I have Alexion on a Hold recommendation. Earnings growth numbers have slowed, and the price chart has been lackluster, so there has recently been no obvious reason for the stock to rise near-term. There’s no doubt, though, that the stock is significantly undervalued. If you want to buy ALXN on the hopes that a buyout could take place, your patience could be rewarded. Hold.


Brighthouse Financial (BHF) reported a huge first quarter earnings beat yesterday afternoon. Surprisingly, the company repurchased 12% of their outstanding shares year-to-date through May 8. At this time, they have temporarily suspended their repurchase plan, in caution over uncertainty brought on by the pandemic-related business lockdown.

Brighthouse is one of the half dozen investment, annuity and life insurance companies that I repeatedly recommended this year, within this wildly undervalued industry. BHF is not featured in the Cabot Undervalued Stocks Advisor Portfolios. The stock broke out of a stable trading range in recent days, and rose 15% upon the market’s open today. There’s solid price resistance at 37-38, where traders should exit.