In this article, we discuss 10 Stocks to Buy According to Stephen DuBois’ Camber Capital Management. If you want to skip our detailed analysis of DuBois’ history, investment philosophy, and hedge fund performance, go directly to 5 Stocks to Buy According to Stephen DuBois’ Camber Capital Management.
In February 2006, Stephen DuBois, a former Ziff Brothers Investment Management employee, founded Camber Capital Management, a Boston-based long/short equities hedge fund manager. In addition, it might be considered an activist hedge fund due to its aggressive investment in Conceptus Inc. in 2011. The 13F portfolio of Stephen DuBois’ Camber Capital Management was worth almost $2.76 billion in the first quarter of 2022, with a top 10 holdings concentration of 57.66%. The hedge fund focuses mainly on the healthcare sector and invests in businesses that provide pharmaceuticals, medical devices, biotech, and healthcare services. That sector represented 81% of the total value of the hedge fund’s portfolio.
Everyone will eventually require healthcare, particularly when it comes to those in their later years. Needless to say, with populations aging in many developed markets, the need for healthcare and the potential for healthcare stocks is on the rise. The largest healthcare market in the world is the U.S, where expenditures on healthcare reached a record 19.7% of GDP in 2020, and is predicted to reach $6 trillion annually by 2028. In 2021, the Russell 3000 HealthCare Index, a gauge for the global healthcare industry, returned more than 20%. This demonstrated substantial growth when the world economy was still reeling from the effects of the Covid disaster.
However, in this article, we will discuss 10 stocks to buy according to Stephen DuBois’ Camber Capital Management. Some of the most notable securities in DuBois’ portfolio included GSK plc (NYSE:GSK), Medtronic plc (NYSE:MDT), and Incyte Corporation (NASDAQ:INCY).
A notable company in DuBois’ portfolio is GSK plc (NYSE:GSK). The company applied with the Japanese Ministry of Health, Labour, and Welfare (MHLW) on June 28 to seek approval for its Shingrix vaccine to prevent shingles in people aged 18 and older. Shingles, commonly known as herpes zoster, are caused by a relapse of the varicella-zoster virus, which also causes chickenpox.
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Another notable stock in DuBois’ portfolio is Medtronic plc (NYSE:MDT). The investor-owned a $55.48 million stake in the company. On June 1, however, Atlantic Equities analyst James Mainwaring reduced Medtronic plc (NYSE:MDT) from ‘Overweight’ to ‘Neutral’, with a price objective of $105, down from $125. According to Mainwaring in a research note, despite management’s efforts to offer cautious guidance in previous quarters, the business stayed locked in a negative earnings revision cycle following the Q4 miss.
Camber Capital Management owned 1.35 million shares of bio-pharmaceutical company Incyte Corporation (NASDAQ:INCY). Stifel analyst Stephen Willey boosted his price objective on Incyte Corporation (NASDAQ:INCY) to $77 from $75 after the company’s Q1 results and maintained a ‘Hold’ rating on the stock.
Our Methodology
Here’s a look at the 10 stocks to buy according to Stephen DuBois’ Camber Capital Management, according to DuBois’ portfolio for the first quarter. In addition, we will examine the overall hedge fund opinion towards the firms in which DuBois is optimistic.
10 Stocks to Buy According to Stephen DuBois’ Camber Capital Management
10. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Camber Capital Management’s Stake Value: $107,448,000
Percentage of Camber Capital Management’s Portfolio: 3.88%
Number of Hedge Fund Holders: 38
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is a Deerfield, Illinois-based Anglo-Swiss-American holding corporation that owns the retail drugstore chains Walgreens and Boots, and many pharmaceutical production and distribution firms.
Among the hedge funds tracked by Insider Monkey, Camber Capital Management was the most significant Walgreens Boots Alliance, Inc. (NASDAQ:WBA) shareholder as of Q1 2022, with approximately 2.40 million shares worth $107.45 million, even after selling off 32% of its stake in the company. Camber Capital Management first acquired Walgreens Boots Alliance, Inc. (NASDAQ:WBA) shares in Q4 2020. In addition, 38 hedge funds were bullish on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) at the conclusion of the March quarter, down from 42 funds in the prior quarter.
Morgan Stanley analyst Ricky Goldwasser maintained an ‘Underweight’ rating and a $43 price objective on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) stock on July 1. In the company’s first quarter earnings report published on June 30, Walgreens Boots Alliance, Inc. (NASDAQ:WBA)’s EPS totaled $0.96, beating estimates by $0.03. In addition, its $32.6 billion in revenue exceeded estimates by $370 million.
GSK plc (NYSE:GSK), Medtronic plc (NYSE:MDT), and Incyte Corporation (NASDAQ:INCY) are some of the stocks to buy according to Stephen DuBois’ Camber Capital Management, along with Walgreens Boots Alliance, Inc. (NASDAQ:WBA).
Aristotle Capital Management mentioned Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in its first quarter of 2022 investor letter. Here’s what the fund said:
“We first invested in Walgreens Boots Alliance in early 2013. Over our holding period, Walgreens merged with U.K.-based Boots Alliance, establishing itself as a global leading retail pharmacy chain. CEO Stefano Pessina set the company on a path of pursuing strategic partnerships (as opposed to vertical integration deals) to increase store traffic and to, over time, transform the business into a neighborhood health destination around a more modern pharmacy. Using its strong FREE cash flow generation, the company ramped up its investments in technology, aiming to accelerate the digitalization of health information. Mr. Pessina was not successful, however, at turning around the firm’s U.S. retail segment and had to deal with increasing prescription drug reimbursement pressures. He stepped down as CEO in 2020, and in 2021, Roz Brewer took the reins of the firm. We admire Ms. Brewer’s impressive track record at companies that include Starbucks (NASDAQ:SBUX) and Walmart (Sam’s Club). However, given management’s decision to divest core cash-generative businesses and redeploy capital to embryonic healthcare startups, we prefer to step aside while we follow the company’s progress.”
9. Ionis Pharmaceuticals, Inc. (NASDAQ:IONS)
Camber Capital Management’s Stake Value: $111,120,000
Percentage of Camber Capital Management’s Portfolio: 4.01%
Number of Hedge Fund Holders: 24
Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) is a biotechnology firm specializing in discovering and developing RNA-targeted medicines. Catherine D. Wood’s ARK Investment Management was the leading shareholder of Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) with 6.17 million shares worth over $228.59 million.
Do Kim of Piper Sandler boosted the firm’s price objective on Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) to $55 from $54 on June 10 and reiterated an ‘Overweight’ rating on the stock. Some elite hedge funds have been dumping Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) lately. In Q1 2022, the number of long hedge fund positions dropped to 24 from 26 in the prior quarter.
Camber Capital Management has owned a stake in Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) since Q1 2021. The hedge fund increased its stake in Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) by a significant margin, 116%, in the first quarter of 2022. The fund held a total of 3 million shares worth $111.12 million as of March 31, making Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) the ninth-largest stock in its 13F portfolio.
8. Brookdale Senior Living Inc. (NYSE:BKD)
Camber Capital Management’s Stake Value: $112,800,000
Percentage of Camber Capital Management’s Portfolio: 4.08%
Number of Hedge Fund Holders: 32
Brookdale Senior Living Inc. (NYSE:BKD) owns and operates retirement homes nationwide. At the end of May 2022, Brookdale Senior Living Inc. (NYSE:BKD) reported a 90 bps rise in occupancy. The sequential weighted average occupancy increased by 70 basis points. Over 2,000 people moved in over the month.
Fund managers added to their Brookdale Senior Living Inc. (NYSE:BKD) holdings in the first quarter. According to Insider Monkey’s Q1 data, 32 hedge funds had long bets on Brookdale Senior Living Inc. (NYSE:BKD) as of March 31, compared to 31 funds in the preceding quarter.
Camber Capital Management held 16 million shares in Brookdale Senior Living Inc. (NYSE:BKD) worth over $112.80 million at the end of Q1, representing 4.08% of its investment portfolio. Another major stakeholder of Brookdale Senior Living Inc. (NYSE:BKD) was Glenview Capital, which owned 12.59 million shares.
7. Merck & Co., Inc. (NYSE:MRK)
Camber Capital Management’s Stake Value: $123,075,000
Percentage of Camber Capital Management’s Portfolio: 4.45%
Number of Hedge Fund Holders: 84
New Jersey-based pharmaceutical giant Merck & Co., Inc. (NYSE:MRK) was one of the companies in which Camber Capital Management reduced its holdings during the first quarter. The weighting of DuBois’ hedge fund in Merck & Co., Inc. (NYSE:MRK) decreased from 6.58% at the end of the fourth quarter of 2021 to 4.45% at the end of March. The hedge fund trimmed its stake in the firm by 40%, closing the first quarter with 1.50 million shares of Merck & Co., Inc. (NYSE:MRK).
On June 27, Cowen analyst Boris Peaker reaffirmed a ‘Market Perform’ rating on Merck & Co., Inc. (NYSE:MRK)’s stock while increasing his price target from $95 to $102.
Merck & Co., Inc. (NYSE:MRK) was in 84 hedge funds’ portfolios at the end of the first quarter of 2022. There were 80 hedge funds in our database with Merck & Co., Inc. (NYSE:MRK) holdings at the end of the prior quarter. The company’s largest Q1 shareholder was Ken Fisher’s Fisher Asset Management, with 11.83 million shares worth $970.82 million.
ClearBridge Investments mentioned Merck & Co., Inc. (NYSE:MRK) in its Q4 2021 investor letter. Here is what the fund said:
“Other pharma companies are providing solutions as well. Merck’s antiviral pill molnupiravir is less effective than Pfizer’s, but it will be a helpful alternative for patients who cannot take Pfizer’s due to drug-drug interactions. Merck is also helping to manufacture Johnson & Johnson’s COVID-19 vaccine, which has less stringent storage requirements than the mRNA vaccines do.”
6. Change Healthcare Inc. (NASDAQ:CHNG)
Camber Capital Management’s Stake Value: $130,800,000
Percentage of Camber Capital Management’s Portfolio: 4.73%
Number of Hedge Fund Holders: 50
Change Healthcare Inc. (NASDAQ:CHNG) specializes in healthcare technologies. The company focuses on transforming the healthcare system through its Change Healthcare platform. On June 1, Citi analyst Daniel Grosslight maintained a ‘Buy’ rating on Change Healthcare Inc. (NASDAQ:CHNG) and boosted his price objective to $27.75 from $25.75.
Hedge funds had a bullish outlook on Change Healthcare, Inc. (NASDAQ:CHNG) in Q1, as the stock was in 50 hedge funds’ portfolios at the end of the first quarter, up by two quarter-over-quarter. That’s also close to the stock’s all-time high level of ownership, which stands at 56. The most significant stake in Change Healthcare Inc. (NASDAQ:CHNG) was held by David Abrams’ Abrams Capital Management, which reported having 16.98 million worth of CHNG as of the end of March.
DuBois’ Camber Capital Management boosted its Change Healthcare Inc. (NASDAQ:CHNG) stake by 50% or 2 million shares during Q1. The hedge fund held 6 million shares worth $130.80 million as of March 31. At 4.73% of the fund’s 13F portfolio, Change Healthcare Inc. (NASDAQ:CHNG) was Camber Capital Management’s sixth-largest stock pick. In Q4, Change Healthcare Inc. (NASDAQ:CHNG) shares accounted for just 2.93% of the hedge fund’s portfolio value.
GSK plc (NYSE:GSK), Medtronic plc (NYSE:MDT), and Incyte Corporation (NASDAQ:INCY) are some of the stocks to buy according to Stephen DuBois’ Camber Capital Management, just like Change Healthcare Inc. (NASDAQ:CHNG).
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Disclosure: None. 10 Stocks to Buy According to Stephen DuBois’ Camber Capital Management is originally published on Insider Monkey.
