Woodford Investment Management recently filed its Form 13F with the U.S. Securities and Exchange Commission (SEC) for the reporting period of September 30. The UK-based fund disclosed only six positions in U.S equities in its latest filing. However, the fund’s equity portfolio was valued at around $1.7 billion on that date, so it clearly has a lot riding on those positions. Woodford focuses on consumer and healthcare stocks, and given the commitment to its top picks, we are going to take a look at them in this article and see what they might have to offer retail investors.
5# Northwest Biotherapeutics Inc (NASDAQ:NWBO)
Shares held (as of September 30): 20,461,392
Total Value (as of September 30): $127.88 million
Percent of Portfolio (as of September 30): 7.38%
Woodford was bullish on Northwest Biotherapeutics Inc (NASDAQ:NWBO) during the third quarter. The investor revealed holding 20.46 million shares of the company, valued at $127.9 million, which represents a quarter-over-quarter increase of 22%. Shares of Northwest Biotherapeutics’, which is developing DCVax personalized immune therapies for solid tumor cancers, have dropped by over 55% during the last three months. Last month, Northwest Biotherapeutics and Woodford Investment Management announced an agreement, under which Woodford will purchase $30 million of the company’s common stock at $5.50 per share, for a total of 5.45 million shares. As a result, Woodford’s total holdings will increase to 25.92 million shares, or about 28.1% of the company’s common stock, so Woodford clearly remains a believer of the company despite the market’s misgivings. Another investor from our database that holds a stake in Northwest Biotherapeutics Inc (NASDAQ:NWBO) is Hal Mintz’s healthcare fund Sabby Capital, which owns 328,400 shares of the company as of June 30.
Top investors spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However, we also know that the returns of hedge funds on the whole have not been good for several years, underperforming the market. We analyzed the historical stock picks of these investors and our research revealed that the small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performances as a whole have been poor. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic the best ideas of the best fund managers on your own? A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned 102% and beaten the market by more than 53 percentage points since the end of August 2012 (see the details).
4# Prothena Corporation PLC (NASDAQ:PRTA)
Shares held (as of September 30): 6,202,525
Total Value (as of September 30): $281.22 million
Percent of Portfolio (as of September 30): 16.24%
In Prothena Corporation PLC (NASDAQ:PRTA), Woodford disclosed ownership of 6.20 million shares valued at $281.2 million. The stake represents a quarter-over-quarter increase of 12%. Prothena Corporation is a late-stage clinical biotechnology company focused on the discovery, development and commercialization of novel protein immunotherapies. Prothena swung to a loss of $56.5 million for the first nine months of this year, versus income of $6.0 million for the same period last year. The company posted revenue of $1.3 million through the first three quarters of 2015, down massively from the $48.8 million it earned in the same period in 2014. Prothena’s year-to-date performance is remarkable nonetheless, increasing by 165.17%. Jacob Gottlieb’s Visium Asset Management also likes Prothena Corporation PLC (NASDAQ:PRTA), owning 996,887 shares of it on June 30.
On the next page, we will study the fund’s top three picks, which includes two healthcare stocks and a tobacco company.