Even with the delay inherent in 13F filings (these filings disclose many of a hedge fund or other investor’s long equity positions at the end of a quarter, but are not released until up to seven weeks after that time), we think there are still a few ways in which they can be of interest to investors. First, the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year (learn more about our small cap strategy) and other strategies based on 13Fs are likely possible as well. We can also see the most popular stocks overall and in different sectors or industries. Here are the ten healthcare stocks which the largest number of hedge funds and other notable investors which we track in our database of 13F filings reported owning at the beginning of 2013:
Pfizer Inc. (NYSE:PFE) was the most popular healthcare stock among hedge funds, with 77 filers in our database reporting a position in the $200 billion market cap drug manufacturer. Billionaire Ken Fisher of Fisher Asset Management named Pfizer his top stock pick for 2013 last December in a piece for Forbes (Fisher is also a columnist for the magazine), and it is one of the fund’s largest holdings according to its 13F (find more of Fisher’s favorite stocks).
74 hedge funds reported a position in Express Scripts Holding Company (NASDAQ:ESRX), which has been a popular pick due to the resumption of its business dealings with Walgreen Company (NYSE:WAG) following a dispute between the two companies earlier in 2012. Omega Advisors, managed by billionaire Leon Cooperman, increased its stake by 38% during the quarter to a total of 2.7 million shares (see Cooperman’s stock picks).
A number of hedge funds were selling out of Johnson & Johnson (NYSE:JNJ), and we counted 67 filers in our database- down from 79 at the end of September. George Soros owned 2.6 million shares at the end of 2012, about even with what he had owned three months earlier (check out more stocks Soros owned).
Leading hospital company HCA Holdings Inc (NYSE:HCA), on the other hand, became considerably more popular among hedge funds during Q4 as ownership increased to 58 filers. Appaloosa Management initiated a position of 4.3 million shares in HCA; that fund is managed by billionaire David Tepper (research more stocks Tepper was buying).
58 hedge funds and other notable investors also reported owning Merck & Co., Inc. (NYSE:MRK), according to our database. Cliff Asness’s AQR Capital Management had 3.1 million shares in its portfolio at the end of the fourth quarter (find the rest of the stocks AQR liked).
New Dow Jones Industrial Average component UnitedHealth Group Inc. (NYSE:UNH), a $57 billion market cap health insurer, had ownership tick down slightly to 52 funds. Eagle Capital Management was one of the hedge funds that was a major shareholder of UnitedHealth.
Gilead Sciences, Inc. (NASDAQ:GILD) was owned by 50 hedge funds and other notable investors at the end of December. Blue Ridge Capital, managed by Tiger Cub John Griffin, added shares during the quarter and closed the year with 4 million shares (check out Blue Ridge’s stock picks).
We counted 50 hedge funds with positions in Abbott Laboratories (NYSE:ABT), down from 54 in the third quarter of 2012. D.E. Shaw, a large hedge fund named after billionaire founder David Shaw, owned a small position at the beginning of October and increased it to 1.8 million shares (see more stocks D.E. Shaw bought).
Hedge funds continue to like Walgreen’s for many of the same reasons as Express Scripts, and so that company remained in the top ten healthcare stocks as well. Billionaire Steve Cohen and the investment team at SAC Capital Advisors reported a position in Walgreen’s.
Teva Pharmaceutical Industries Ltd (NYSE:TEVA) closed out our list of the most popular healthcare stocks with 46 of the 13Fs we track including shares of the stock. Billionaire Israel Englander’s Millennium Management moved heavily into the stock.
Disclosure: I own no shares of any stocks mentioned in this article.
