Eric Sprott’s Top Five Bets Include Tech, Healthcare Stocks

UnitedHealth Group Inc (NYSE:UNH) is Sprott’s top healthcare pick, with the investor reporting a holding of 266,830 shares as of the end of September, up by 115% on the quarter, and with the value of the stake amounting to $30.96 million. With the Affordable Care Act gaining momentum and companies adapting to new policies, the health insurance industry is going through a consolidation period, with recent deals including CIGNA Corporation (NYSE:CI) agreeing to be acquired by Aetna Inc (NYSE:AET), and Humana Inc (NYSE:HUM) being taken over by Anthem Inc (NYSE:ANTM). UnitedHealth, as part of this industry-wide consolidation, acquired Catamaran Corp. back in July. At the end of June, UnitedHealth Group Inc (NYSE:UNH) was included in the equity portfolios of 61 funds from our database.

In Discover Financial Services (NYSE:DFS), Sprott increased its stake by 33% to 587,220 shares worth $30.53 million. Shares plunged at the beginning of the year amid weaker-than-expected earnings for the fourth quarter of 2014, and have yet to fully recover. However, the stock trades at just 11.6-times earnings, below the industry average of 16 and it sports a dividend yield of nearly 2%. Analysts have a consensus ‘Buy’ rating on Discover Financial Services, with a mean price target of $67.90, which indicates 20% upside potential. A total of 45 funds among those we track reported long positions in Discover Financial Services (NYSE:DFS) as of the end of June, down from 56 a quarter earlier.

Pfizer Inc. (NYSE:PFE) is another healthcare pick of Eric Sprott and, during the third quarter, he further increased his stake in the company by 14% to 966,180 shares worth $30.35 million. The stock inched down by 5% during the quarter, dragged down by the overall sector decline, although it is 13% in the green in year-to-date terms. Pfizer Inc.’s plans to merge with Allergan PLC (NYSE:AGN) will please investors, who will benefit from the tax cost savings, despite the controversy sparked by the potential inversion, which would see Pfizer relocate its headquarters to Ireland. Billionaire Leon Cooperman’s Omega Advisors projects a 10% growth rate for Pfizer Inc. (NYSE:PFE) for the next three-to-five years and has 2.1% of its assets invested in the stock. Fisher Asset Management disclosed holding 31.93 million shares of the company in its 13F for the third quarter.

Disclosure: None