As a new filing with the Securities and Exchange Commission showed, Andreas Halvorsen‘s Viking Global has initiated a new position in Envision Healthcare Holdings Inc (NYSE:EVHC), a $7.3 billion provider of outsourced medical services. Viking owns nearly 11.54 million shares of Envision Healthcare, the passive stake amassing 6.3% of the company’s outstanding stock. With the addition of the company to its equity portfolio, Viking Global has become the largest shareholder of Envision Healthcare Holdings among the funds that we track.
As mentioned earlier, Envision Healthcare Holdings Inc (NYSE:EVHC) provides outsourced medical services. Among its clients are consumers, as well as hospitals, healthcare plans and government organizations. The stock of the company returned more than 25% in the last calendar year, slightly beating the Long-Term Care Facilities industry, which had an average return of around 21%. The growth came on the back of consistent revenue growth reported for the last several quarters and both EPS and EBITDA appreciation. Overall, for 2014, Envision Healthcare Holdings posted revenue of $4.40 billion, versus $3.73 billion for the previous year, while its diluted EPS surged to $0.66 from $0.04. In the last two months both Cantor Fitzgerald and Jefferies Group raised their price targets on the stock to $47, both reiterating ‘Buy’ ratings, which coincide with the consensus from other analysts.
Aside from Viking Global, among other investors that are bullish on Envision Healthcare Holdings Inc (NYSE:EVHC) are some of the largest and best-performing hedge funds, some of which have a significant exposure to the healthcare sector, such as Roberto Mignone’s Bridger Management and Richard Barrera’s Roystone Capital Partners, while others have more diversified equity portfolios like Ken Griffin’s Citadel Investment Group and David Gallo’s Valinor Management. However, the previous round of 13F filings showed a decrease in popularity in the stock, as the number of funds holding shares of Envision Healthcare Holdings Inc (NYSE:EVHC) dropped to 30 from 39 a quarter earlier. The second-largest stake (after Viking) is held by Daniel S. Och‘s OZ Management, which disclosed 4.56 million shares in its latest 13F filing.
In addition, earlier this month, three top executives exercised their option rights and purchased shares that have been sold at a significant profit. The largest transaction has been disclosed by William Sanger, the company’s CEO and Chairman, who acquired 418,500 shares at $6.06 per unit (through options) and sold them at $40.00 per share.
With the addition of Envision Healthcare Holdings Inc (NYSE:EVHC), Mr. Halvorsen has increased his fund’s exposure to the healthcare sector, which already amasses the largest portion of Viking’s $21.78 billion equity portfolio, 31% as of the end of 2014. Overall, Viking Global currently has 15 long positions in healthcare companies out of a total of 62 disclosed in its latest 13F filing. During the first three months of 2015, Mr. Halvorsen’s healthcare picks returned around 16%, outperforming his overall equity portfolio, which had weighted average returns of 6.3%. Moreover, Viking’s three largest holdings in terms of value are represented by healthcare stocks, two of which posted double-digit growth during the January-March period. Let’s take a closer look at these companies.
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Illumina, Inc. (NASDAQ:ILMN) represented Viking’s Global’s largest position, the investor holding 8.29 million shares of the company valued at $1.53 billion at the end of 2014. The stock, however, hasn’t performed as well as others during the first three months, appreciating by 0.6%. Mr. Halvorsen initiated a stake in Illumina during the fourth quarter of 2013 and the stock has returned over 70% since the beginning of last year. Illumina, Inc. (NASDAQ:ILMN) is a $28 billion company that is engaged in array-based solutions for genetic analysis, with applications in DNA exploration, as well as the development of maps of gene variations. Viking owns the largest stake in Illumina, Inc. (NASDAQ:ILMN) among the funds that we track, followed by Samuel Isaly‘s Orbimed Advisors, which owns 1.48 million shares as of the end of 2014.
In the pharmaceutical retailer Walgreens Boots Alliance Inc (NASDAQ:WBA), Viking disclosed a $1.44 billion position that contains 18.93 million shares. The stock of Walgreens Boots Alliance Inc (NASDAQ:WBA) returned 11.6% during the first quarter, fueled by strong financial results reported for the first time since Walgreens merged with Alliance Boots. The company has also maintained its guidance for the current year and investors like the benefits that arise from the combination of both companies. Overall 70 funds reported long positions in Walgreens Boots Alliance Inc (NASDAQ:WBA) in the previous round of 13F filings, including Barry Rosenstein’s JANA Partners, John Griffin’s Blue Ridge Capital, and Stephen Mandel’s Lone Pine Capital.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) posted the most impressive returns among Viking’s largest picks, jumping by 38% during the January-March period, mainly on the back of the acquisition of Salix Pharmaceuticals. The fund also benefited from the merger by holding a long position in Salix at the end of 2014, that stock jumping by 50% before the completion of the merger. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is also one of Mr. Halvorsen’s long-term investments, Viking holding shares of the company for more than two years. At the end of last year, Viking owned 9.08 million shares of Valeant Pharmaceuticals Intl Inc (NYSE:VRX) valued at $1.30 billion, trailing Jeff Ubben’s ValueAct Capital, which owns 19.38 million shares and Bill Ackman’s Pershing Square, which disclosed a new stake in Valeant Pharmaceuticals Intl Inc (NYSE:VRX) with 19.47 million shares at the end of March.
Disclosure: None
