5 Healthcare Stocks Billionaires Love The Most

The election of Donald Trump has heralded an era of optimism in the healthcare industry, which has been one of the worst performing sectors over the past two years. The Don is expected to ease regulations in the healthcare sector and bulls see solid prospects for the sector ahead. In this article we take a look at five stocks that are popular among renowned billionaires in the sector. Keeping track of famous investors and their investments helps in gauging the future of markets and making fruitful investment decisions.

 

Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

Allergan plc Ordinary Shares (NYSE:AGN)

According to our data, a total of 20 billionaires in our data owned Allergan plc Ordinary Shares (NYSE:AGN) at the end of the third quarter, ending the period with $4.44 billion worth of the company’s stock in aggregate. However, overall hedge funds sentiment was negative for Allergan in the third quarter, as 115 funds were bullish on the company at the end of the period, down from 131 funds a quarter earlier. The stock is down some 38% year-to-date. John Paulson’s Paulson & Co owns 3.89 million shares of Allergan, as of the end of the third quarter.

Shire PLC (ADR) (NASDAQ:SHPG)

Of the 64 billionaires in our database, 13 reported ownership of stakes in Shire PLC (ADR) (NASDAQ:SHPG) at the end of the third quarter. These funds collectively owned $216.32 million worth of shares of the UK-based biotechnology company. Shire reported third quarter EPS of $3.17 on $3.45 billion revenue, worse than the analysts’ projections of $3.21 EPS and $3.57 billion revenue. For the full year, the company expects EPS of $12.70-$13.10, versus the consensus of $12.98, while revenue for the period is expected to come in at $10.8-11.0 billion, versus the consensus of $11.41 billion. Stephen Mandel’s Lone Pine Capital owns 1.69 million shares of Shire PLC according to the latest 13F data.

 

 

On the next page, we will discuss some other healthcare stocks that billionaires love.

Gilead Sciences, Inc. (NASDAQ:GILD)

13 billionaires amassed Gilead Sciences, Inc. (NASDAQ:GILD) shares at the end of the September quarter, compared to 12 billionaires a quarter earlier. The total value of these shares was worth $1.22 billion. Gilead Sciences, Inc. (NASDAQ:GILD) is reportedly considering increasing its M&A activity given its large cash pile and potential activist pressure if management doesn’t ramp up its growth/value results. At the end of the third quarter, 87 hedge funds tracked by Insider Monkey were bullish on Gilead Sciences, Inc. (NASDAQ:GILD).

Humana Inc (NYSE:HUM)

12 out of 64 billionaires in our data were long Humana Inc (NYSE:HUM) at the end of the third quarter. Those ultra-net worth investors owned 2.89 billion worth of the company’s shares in aggregate. Humana was recently upgraded by Credit Suisse to ‘Outperform’ from ‘Neutral’ with a price target of $210 from $175. Susquehanna increased its price target for the company to $200 per share after Humana’s third quarter results, in which the company earned third quarter EPS of $3.18 on $13.69 billion revenue, while analysts expected EPS of $3.09 and $13.41 billion revenue. For full year, the company expects EPS of $9.50, versus the consensus of $9.51. Larry Robbins’ Glenview Capital owns 9.53 million shares of Humana Inc (NYSE:HUM) as of the end of Q3.

 

Biogen Inc (NASDAQ:BIIB)

At the end of the third quarter, 12 billionaires tracked by Insider Monkey had amassed $2.18 billion worth of shares of Biogen Inc (NASDAQ:BIIB), compared to 11 funds a quarter earlier. Biogen shares were recently rattled after the Indiana-based Eli Lilly and Company recently said its Alzheimer’s Disease drug Solanezumab missed a primary endpoint of slowing cognitive decline in a study. Biogen is working on a drug that targets a similar market as Eli Lilly. Leerink analyst Geoffrey Porges slashed Biogen’s price target to $355 from $365.00 after Lilly’s announcement. Out of 742 funds tracked by Insider Monkey, 81 were bullish on Biogen Inc (NASDAQ:BIIB), versus 73 funds long the stock a quarter earlier.

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