UnitedHealth Group (UNH), Novo Nordisk (NVO), Johnson & Johnson (JNJ): Cheapest Healthcare Stocks Picked By Markel Gayner

Novo Nordisk A/S (ADR) (NYSE:NVO) is the next healthcare stock in Gayner’s portfolio, with the position of 1.08 million shares having a value of $57.39 million.Novo Nordisk A/S (ADR) (NYSE:NVO) trades at a higher P/E of 32.57 and forward P/E of 30.01, though it operates in the biotech sector, whose stocks tend to be more aggressively priced based on their future potential. Some of that potential is becoming realized with Novo Nordisk, with the Danish company’s latest earnings showing a profit of $1.48 billion, a 50% gain year-over-year. Gross margins also improved to nearly 85% as it benefited from the rising U.S dollar in relation to the Danish Kroner. Among the company’s best performing drugs were its diabetes drugs Levemir and Victoza, which generated $1.2 billion in sales. Novo Nordisk was one of the stocks hedge funds made a bundle on in the first quarter, as it returned 28.3%. Among the funds who scored big on the stock was Jim Simons’ quant fund Renaissance Technologies, which had the stock in second position in its massive portfolio heading into 2015.

Next we come to Johnson & Johnson (NYSE:JNJ), a dow stock that hedge funds are crazy about. The $278.30 billion market cap manufacturer of a wide range of pharmaceutical treatments, health products, and medical devices also ranks as a dividend aristocrat, having not lowered its dividend payments for nearly three decades, since its first payment in 1987. Johnson & Johnson (NYSE:JNJ) currently pays a dividend of $0.75 quarterly to shareholders, with a yield of 2.98%. Markel Gayner has been one of those shareholders dating all the way back to 2000 and maintains a position of 574,200 shares worth $57.77 million as of March 31. The stock was a middling performer throughout the 2000’s, gaining just 38% in ten years. However the stock has performed much better over the last three years, rising by 56%, and appears poised for continued growth courtesy a strong drug pipeline. Shares currently trade at a P/E of 18.00 and a forward P/E of 15.69. Prominent value investors Cliff Asness and Donald Yacktman are among the top shareholders of Johnson & Johnson (NYSE:JNJ).

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