In this article, we will take a look at the 12 healthcare stocks billionaires like the most.
The healthcare sector includes companies ranging from pharmaceuticals, medical equipment and device manufacturers, medical insurance providers and other healthcare services providers. With such a vast array of services, in many cases ones that increase life expectancy and quality of life, the healthcare sector accounts for one of the biggest slices in the global economic pie. The global healthcare industry is expected to grow at a compounded annual growth rate (CAGR) of 21.92% to be worth a whopping $7.3 trillion by the end of this year, according to a report.
Technological changes are also having their impact on the healthcare industry with multiple use cases that can lead to operational efficiencies and medical breakthroughs. Generative AI, a significant leap forward in the artificial intelligence arena, can help companies save billions of dollars of costs as well as accelerate drug discovery and development. According to a McKinsey study, the healthcare industry can save $200 billion to $360 billion in administrative functions by employing generative AI, automation, and analytics. You can read more about this in our recently published article: 12 Best Healthcare Stocks For the Long-Term
With the COVID-19 pandemic on the backburner following massive vaccination campaigns, coronavirus related vaccines and medicines have rapidly fallen from their peaks. A prime example of this phenomenon is the 42% year-on-year decline in the revenues for Pfizer Inc. (NYSE:PFE) mostly led by a decline in the company’s revenue from its mRNA-based COVID-19 vaccine – COMIRNATY, and covid-19 treatment – PAXLOVID. In the wake of this fall from grace for covid related therapies, the focus, once again, has shifted to other areas of medical research.
In August this year, Novo Nordisk released SELECT trial results which showed that its GLP-1 weight loss medicine Wegovy reduced the risk of major adverse cardiovascular events in adults who are overweight or obese and have established cardiovascular disease with no prior history of diabetes. This has brought the possibility of GLP-1 drug class being broadly adopted in the U.S. On December 5, Eli Lilly and Company (NYSE:LLY) announced the availability of Zepbound™ (tirzepatide) injection in U.S. pharmacies, indicated for adults with obesity. The drug was approved by the U.S. FDA on November 8 and is available through a prescription that can be filled at retail and mail-order pharmacies.
Major healthcare companies are also looking for M&A activity to expand their commercial portfolios as well as to expand and bolster their development pipelines. In December so far, Danaher Corporation (NYSE:DHR) completed the acquisition of Abcam plc (NASDAQ:ABCM), a protein consumables supplier, for $5.7 billion, while AbbVie Inc. (NYSE:ABBV) announced an agreement to acquire Cerevel Therapeutics (NASDAQ:CERE) for nearly $8.7 billion in cash. Several other major M&A transactions have also been announced across the healthcare sector.
Photo by National Cancer Institute on Unsplash
Methodology
To compile our list of the healthcare stocks billionaires like the most, we first made a list of healthcare stocks and determined the number of billionaires that had bought their shares as of September 2023 through Insider Monkey’s database. Out of these, the stocks with the most billionaire investors were selected. The stocks on our list have been ranked in an ascending order of billionaire ownership.
12. Pfizer Inc. (NYSE:PFE)
Number of Billionaire Holders: 18
Founded in 1849, New York-based, Pfizer Inc. is a leading research-based biopharmaceutical company. Its product portfolio and pipeline includes several pharmaceutical therapies for primary care, specialty care, and oncology, including mRNA-based COVID-19 vaccine – COMIRNATY, and covid-19 treatment – PAXLOVID.
On October 31, Pfizer Inc. released its financial results for the third quarter of 2023. Its revenues declined by 42% y-o-y to $13.2 billion, while it reported a net loss of $2.4 billion. The drastic drop resulted from a decline in the company’s revenue from Comirnaty and Paxlovid. On the other hand, the revenues for non-covid products of the company increased 10% operationally.
On December 1, Pfizer Inc. announced topline data from the Phase 2b clinical trial investigating its oral Glucagon-like peptide-1 receptor agonist (GLP-1RA) candidate, danuglipron, in adults with obesity and without type 2 diabetes. The study demonstrated statistically significant change in body weight from baseline.
As of Q3 2023, 73 of the 910 hedge funds tracked by Insider Monkey were long Pfizer Inc., holding shares worth $2.4 billion. Prominent hedge funds such as Citadel Investment Group, D E Shaw, and Two Sigma Advisors, among others, held the most shares of the company.
11. Merck & Co., Inc. (NYSE:MRK)
Number of Billionaire Holders: 18
Merck & Co., Inc. is a biopharmaceutical company with a focus on delivering solutions for oncology, vaccines, infectious diseases, Cardio-metabolic disorders, and Discovery & development. Its product pipeline comprises 83 programs in Phase 2, 30 programs in Phase 3, and 3 programs Under Review, including COVID19 vaccines.
On November 9, Deutsche Bank analyst James Shin initiated coverage of Merck & Co., Inc. shares with a target price of $115 with a ‘Buy’ rating for the stock. Earlier in November, the company announced that it had received FDA approval for KEYTRUDA, in combination with gemcitabine and cisplatin, for the treatment of patients with locally advanced unresectable or metastatic biliary tract cancer.
On November 25, Merck & Co., Inc. announced an agreement to acquire Caraway Therapeutics, Inc. for a total potential consideration of $610 million, including upfront payments and contingent milestone payments. Caraway is a preclinical biopharmaceutical company focused on genetically defined neurodegenerative and rare diseases.
Merck & Co., Inc. shares were held by 85 hedge funds with total value of $5.1 billion, as of September 30. Ken Fisher’s Fisher Asset Management was the largest hedge fund shareholder with ownership of 13.3 million shares valued at $1.4 billion.
10. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Billionaire Holders: 18
Based in New Jersey, Bristol-Myers Squibb Company (NYSE:BMY) is a biotechnology company focused on the discovery, development, and delivery of innovative medicines for serious diseases across oncology, hematology, immunology, cardiovascular disease, and fibrosis.
On October 8, Bristol-Myers Squibb Company announced that it had entered into a definitive merger agreement to acquire Mirati Therapeutics, Inc. (NASDAQ:MRTX), in an all-cash transaction which values the target company at $4.8 billion. The acquisition is expected to strengthen and diversify the oncology portfolio of the company.
On December 6, the Board of Directors of Bristol-Myers Squibb Company declared a quarterly dividend of $0.60 per share, representing a 5.3% increase over last year’s quarterly rate. This marks the 15th consecutive year of dividend increases and the 92nd consecutive year of dividend payments.
9. Abbott Laboratories (NYSE:ABT)
Number of Billionaire Holders: 18
Abbott Laboratories (NYSE:ABT) is a leading global healthcare company with a portfolio of products and services that spans healthcare, diagnostics, medical devices, nutritional, and branded generic medicines.
On September 22, Abbott Laboratories announced the acquisition of Bigfoot Biomedical, a leader in developing insulin management systems, as part of the company’s efforts to develop connected solutions for making diabetes management even more personal and precise. The terms of the transaction were not disclosed.
On October 19, Wells Fargo analyst Lawrence Biegelsen lowered the price target for Abbott Laboratories shares to $116 from $136 and maintained a ‘Buy’ rating. This followed the Q3 earnings release by the company, which managed to exceed the consensus estimates for both the revenue as well as normalized EPS.
As of Q3 2023, 69 of the 910 hedge funds tracked by Insider Monkey owned shares of Abbott Laboratories. This included 18 billionaires with ownership of shares worth $1.7 billion.
8. AbbVie Inc. (NYSE:ABBV)
Number of Billionaire Holders: 18
North Chicago, Illinois-based AbbVie Inc. is a global biopharmaceutical company with a focus on immunology, oncology, neuroscience, eye care, virology, women’s health, and gastroenterology, in addition to products and services across its Allergan Aesthetics portfolio.
On November 30, AbbVie Inc. announced an agreement to acquire ImmunoGen, Inc. (NASDAQ:IMGN) in an all-cash transaction with an equity value of $ 10.1 billion. The transaction includes ImmunoGen’s flagship cancer therapy ELAHERE, a first-in-class antibody-drug conjugate approved for platinum-resistant ovarian cancer.
The quest for new revenue lines for the pharma giant didn’t end there. On December 6, AbbVie Inc. announced an agreement to acquire Cerevel Therapeutics for nearly $8.7 billion in cash. Cerevel is focused on neuroscience diseases with several candidates in clinical stage.
On December 1, Raymond James analyst Gary Nachman maintained an ‘Overweight’ rating for AbbVie Inc. shares and raised the target price from $177 to $181.
7. Cigna Corporation (NYSE:CI)
Number of Billionaire Holders: 19
Based in Bloomfield, Connecticut, Cigna Corporation (NYSE:CI) is a global health company with primary businesses including Evernorth Health Service – a pharmacy, care and benefits solutions provider; and Cigna Healthcare – a health benefits provider serving customers and clients across United States as well as internationally.
On November 2, Cigna Corporation released its financial results for Q3 2023. Its revenue increased by 8% y-o-y to $49 billion while net income shrunk by 49% y-o-y to $1.4 billion. The normalized EPS of the company, at $6.77, surpassed consensus estimates by $0.09.
Following the earnings release, RBC Capital analyst Ben Hendrix raised the price target for Cigna Corporation shares from $300 to $327 and maintained a ‘Sector Perform’ rating for the shares.
As of Q3 2023, Cigna Corporation shares were held by 74 out of 910 hedge funds tracked by Insider Monkey with a total value of $2.8 billion. The stock counted 19 billionaires among its shareholders, with ownership of $1.3 billion worth of its shares.
6. Eli Lilly and Company (NYSE:LLY)
Number of Billionaire Holders: 20
Eli Lilly and Company, based in Indianapolis, Indiana, is a leading pharmaceutical company focused on providing therapies for significant health challenges including diabetes, obesity, Alzheimer’s, immune system disorders, and cancers, among others.
On December 5, Eli Lilly and Company announced the availability of Zepbound™ (tirzepatide) injection in U.S. pharmacies, indicated for adults with obesity. The drug was approved by the U.S. FDA on November 8 and is available through a prescription that can be filled at retail and mail-order pharmacies.
As of Q3 2023, 102 of the 910 hedge funds tracked by Insider Monkey owned shares of Eli Lilly and Company, valued at $9.0 billion. Ken Fisher’s Fisher Asset Management was the largest shareholder with ownership of 4.5 million shares valued at $2.4 billion.
Polen Capital, an investment management company, made the following comments about Eli Lilly and Company in its Q3 2023 investor letter:
“Lilly had been a consistent but moderate growth company until the launch of its GLP-1 drug, Mounjaro, for diabetes (and now obesity), which has caused growth to accelerate strongly. We expect the GLP-1 drug class, particularly Mounjaro, to be very large and possibly the largest drug class ever created. These drugs are very effective for glycemic control for Type 2 diabetics and have also proven to be highly effective in weight loss for overweight and obese patients with and without Type 2 diabetes. [. . .] With durable franchises in multiple therapeutic areas and exceptional growth in diabetes and weight loss, we expect Eli Lilly’s revenue to grow at a mid-teens or better rate over the next five years and potential EPS growth above 20%. This growth does not include any benefit from the company’s Alzheimer’s drug, Donanemab, which should be approved soon but has a debatable risk/benefit profile.”
5. Johnson & Johnson (NYSE:JNJ)
Number of Billionaire Holders: 20
Johnson & Johnson is one of the largest healthcare companies in the world with a history dating back to more than 135 years. It focuses on the research and development, manufacture, and sale of a broad range of products in the healthcare field across pharmaceuticals, and medical devices.
Johnson & Johnson completed the spinoff of its Consumer Health division during the third quarter through an initial public offering of the division as Kenvue Inc. (NYSE:KVUE). The company generated cash proceeds of $13.2 billion through a debt offering and IPO of Kenvue. It retained 9.5% stake in Kenvue.
As of Q3 2023, 84 hedge funds owned shares of Johnson & Johnson, valued at $4.1 billion. Notable investors included Fisher Asset Management, Bridgewater Associates, and D E Shaw, among others.
4. UnitedHealth Group Inc. (NYSE:UNH)
Number of Billionaire Holders: 21
UnitedHealth Group Inc. (NYSE:UNH) provides health coverage, software, data, and consultancy services. Its health insurance business utilizes technology and data capabilities to help coordinate patient care, improve affordability, analyze cost trends, manage pharmacy benefits, and create a simpler consumer experience.
On October 13, UnitedHealth Group Inc. released its financial results for the third quarter of 2023. It generated a strong performance during the quarter with total revenue and net income both exceeding Q3 2022 figures by more than 10% at $92.4 billion and $6.0 billion, respectively.
Following the earnings release, RBC Capital raised the firm’s price target on UnitedHealth Group Inc. shares to $596 from $572 and maintained an ‘Outperform’ rating.
As of Q3 2023, 104 of the 910 hedge funds tracked by Insider Monkey owned shares of UnitedHealth Group Inc., valued at $11.0 billion. Its largest shareholder was GQG Partners with ownership of 3.2 million shares valued at $1.6 billion.
In its Baron Health Care Fund Q3 2023 investor letter, Baron Funds, an investment management company, made the following comments about UnitedHealth Group Inc.:
“UnitedHealth Group Incorporated is a diversified health and well-being company with $200 billion in revenue that operates across four segments, United Healthcare, Optum Health, OptumInsight, and OptumRX, serving 134 million individuals in all 50 states and more than 125 countries. [. . .] We remain positive on this market-leading managed care company with revenue twice that of its closest competitor. The company continues to gain Medicare Advantage share given attractive and stable benefits and could achieve greater profitability as medical management is deployed across newer, higher acuity lives. We believe UnitedHealth has a broad number of levers at its command and can sustainably deliver 13% to 16% annual longterm earnings growth.”
3. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Billionaire Holders: 21
Sunnyvale, California-based Intuitive Surgical, Inc. (NASDAQ:ISRG) is a global technology leader in minimally invasive care and the pioneer of robotic-assisted surgery and develops, manufactures, and markets the da Vinci surgical system.
On October 19, Intuitive Surgical, Inc. released its financial results for Q3 2023. Its revenues increased by 12% y-o-y to $1.7 billion, while it reported a net income of $416 million. It generated a normalized EPS of $1.46, which exceeded consensus estimates by $0.04.
On November 17, Stifel analyst Rick Wise raised the price target for Intuitive Surgical, Inc. shares to $350 from $315 and maintained a ‘Buy’ rating.
As of Q3 2023, 21 of the billionaires tracked by Insider Monkey owned Intuitive Surgical, Inc. shares worth $3.1 billion. Ken Fisher’s Fisher Asset Management was the largest shareholder with ownership of 4.4 million shares valued at $1.3 billion.
In its “Baron Fifth Avenue Growth Fund” Q3 2023 investor letter, Baron Funds, an investment management company, made the following comments about Intuitive Surgical, Inc.:
“Intuitive Surgical, Inc. manufactures and markets the da Vinci Surgical System, a robotic system used for minimally invasive procedures. The stock declined 14.5% during the third quarter due to investor concerns about a slowdown in systems sales and procedures in China, where the government has embarked upon an anti-corruption campaign that may cause disruption in the region. Investors have also reacted to management’s commentary about a potential slowdown in bariatric procedures due to the increased adoption of obesity medications such as Wegovy. We think disruption in China is temporary; meanwhile bariatric procedures represent a small fraction of the overall range of procedures Intuitive targets. We believe the long-term outlook for the company is positive. Procedure growth on Intuitive systems is rising at a solid rate, and we think the business will continue advancing its technological lead as it invests heavily in research and development.”
2. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Billionaire Holders: 23
Waltham, Massachusetts-based Thermo Fisher Scientific Inc. (NYSE:TMO) is a leading supplier of analytical instruments, life sciences solutions, specialty diagnostics, laboratory, pharmaceutical and biotechnology services.
On October 17, Thermo Fisher Scientific Inc. announced to acquire Olink Holding AB (publ) (NASDAQ:OLK), Sweden-based provider of next-generation proteomics solutions, in an all-cash transaction that values Olink at nearly $3.1 billion. Earlier this year in August, the company completed the acquisition of CorEvitas, LLC, a leading provider of regulatory-grade, evidence for approved medical treatments and therapies, from Audax Private Equity, for $912 million in cash.
Following the Q3 2023 financial release on October 25 which showed better than expected normalized EPS figures, RBC Capital analyst Conor McNamara maintained an ‘Outperform’ rating for Thermo Fisher Scientific Inc. and lowered the price target to $579 from $657. The price target represents a potential upside of nearly 18%.
As of Q3 2023, 109 of the elite hedge funds tracked by Insider Monkey held Thermo Fisher Scientific Inc. shares, valued at $8.9 billion, which makes it the most commonly owned stock among hedge funds, on our list of 12 healthcare stocks billionaires like the most. Chris Hohn’s TCI Fund Management was its largest hedge fund shareholder with ownership of 3.2 million shares valued at $1.6 billion.
1. Danaher Corporation (NYSE:DHR)
Number of Billionaire Holders: 25
Danaher Corporation is a global science and technology company providing products and services across life sciences, diagnostics, environmental and applied sectors through more than 20 operating companies. It has operations in more than 60 countries.
On December 6, Danaher Corporation completed the acquisition of Abcam plc (NASDAQ:ABCM), a protein consumables supplier, in an all-cash transaction implying an enterprise value of nearly $5.7 billion for the target company.
Previously, Danaher Corporation completed the separation of its Environmental & Applied Solutions segment, through the spin-off of Veralto Corporation. The Veralto stock started trading on the NYSE on October 2.
Danaher Corporation ranks first on our list of 12 healthcare stocks billionaires like the most. The shares of the company were owned by 25 billionaires with ownership of total shares valued at $4.2 billion according to the Insider Monkey database.
Oakmark Funds, advised by Harris Associates, made the following comments about Danaher Corporation in its Q3 2023 investor letter:
“Danaher is a global leader in life sciences tools and diagnostics. We are impressed by Danaher’s excellent track record of creating shareholder value through smart capital allocation and world-class operational execution. The company’s business mix has shifted dramatically in recent years following a series of transformative acquisitions and divestitures. We believe these portfolio improvements leave the company attractively positioned in some of the industry’s fastest growing, most profitable niches within life sciences. Near-term headwinds related to the pandemic are overshadowing this attractive long-term outlook, in our view. More specifically, Danaher sells diagnostic tests and critical inputs needed for manufacturing Covid-19 vaccines. As Covid-19 demand has normalized, Danaher experienced sales headwinds and channel destocking, pressuring its stock price. The shares now trade at a discount to both peers and private market transactions, giving us an attractive opportunity to invest in what we view as a high-quality, resilient business at a discounted valuation.”
You may also like to read 10 Best Semiconductor Stocks According to Billionaires and 12 Best Materials Dividend Stocks To Buy Now
Suggested Articles:
21 Most Valuable Media Companies In The World
25 Fastest Growing Economies in the World in 2023
Billionaire Druckenmiller’s 10 Stocks Picks with Huge Upside Potential
This article is originally published at Insider Monkey.
