4. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)
1623 Capital’s Stake Value: $670,000
Percentage of 1623 Capital’s 13F portfolio: 0.33%
Number of Hedge Fund Holders: 56
1623 Capital, according to regulatory filings for the first quarter, held nearly 9,000 shares of BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) valued at $670,000. This represented 0.33% of the fund’s total holdings, and was an increase of 18% over the previous quarter.
Based in California, BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) makes drug therapies for patients with life-threatening and rare diseases. At the end of the first quarter, 56 hedge funds were bullish on the company shares with $2.36 billion in aggregate positions. This shows improving investor sentiment from the previous quarter where 48 hedge funds owned stakes in the company.
On July 12, Cantor Fitzgerald analyst Olivia Brayer initiated coverage of BMRN stock with an ‘Overweight’ rating and a $110 price target. She views BioMarin as one of the most differentiated stories in the biotech sector, and urges investors to capitalize on the shares at current levels. Brayer also stated that BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) boasts the best growth profile of any profitable biotech firm in the United States.
3. Teladoc Health, Inc (NYSE:TDOC)
1623 Capital’s Stake Value: $725,000
Percentage of 1623 Capital’s 13F portfolio: 0.36%
Number of Hedge Fund Holders: 36
Teladoc Health, Inc (NYSE:TDOC) offers virtual healthcare services in the United States. At the close of Q1 2022, 1623 Capital held more than 10,000 shares of the company valued at $725,000. This was a new addition to the fund’s portfolio, and represents 0.36% of its overall holdings.
On June 29, Stifel analyst David Grossman lowered the firm’s price target on Teladoc Health, Inc (NYSE:TDOC) to $36 from $45 and maintained a ‘Hold’ rating on the shares. He sees the company struggling with growing competition and market penetration, slowing growth and commoditization following the pandemic. The analyst sees little to no multiple expansion at current levels, given the broader economic outlook.
As of the end of the first quarter of 2022, 36 out of the 912 hedge funds tracked by Insider Monkey reported ownership of positions in Teladoc Health, Inc (NYSE:TDOC). This is down from 39 hedge funds a quarter earlier. ARK Investment Management of Cathie Wood stood as the firm’s most prominent Q1 shareholder, with a massive $1.4 billion stake.
Here is what Greenhaven Road Capital had to say about the market position and prospects of Teladoc Health, Inc. (NYSE:TDOC) in its Q1 2022 investor letter:
“Teladoc is the largest telehealth provider in the US and has recently begun to expand internationally. TDOC’s platform enables an ever-expanding list of patient-doctor interactions (including those for primary health care, mental health issues and chronic condition management) to transition from an on-site visit to one that can be done remotely with full video- based interaction. TDOC provides its platform of services on both a business-to-business and direct-to-consumer basis, through monthly subscription-based relationships. For its core business-to-business clients, the company contracts with a wide range of entities, including large scale employers (the company currently contracts with over 50% of the Fortune 500), health plans, health systems, and medical insurance companies, which currently cover more than 50 million members. For these customers, the company provides a win-win-win, as patients spend no time traveling and less time waiting, doctors are more efficient seeing more patients in less time, and payers (employers and plan sponsors) save money while being able to offer a highly popular additional benefit for their employees. This B to B market is projected to be a +$100 billion market opportunity and TDOC is the clear global market leader. For its direct-to- consumer clients, the company provides a growing suite of services for individuals to have affordable access to on-demand and scheduled medical services, for which their current insurance does not provide reimbursement (such as extended mental health counseling).
Although the company has been growing steadily for well over a decade, the business has transformed over the past few years as the COVID pandemic caused a significant increase in the demand for virtual healthcare. In addition, the company’s 2020 acquisitions of Livongo, the leader in virtual chronic condition management, and InTouch a competitive telehealth platform, materially broadened the company’s product offerings. At its recent analyst day, management guided to 25-30% top line growth for each of the next three years, exiting 2024 with more than $4 billion in annual revenue. The company also anticipates expanding margins by 100-150 basis points per year in each of the next three years, while still accelerating its investments in marketing and R&D. As with many of our recent purchases, we took advantage of the decline in the company’s shares (down a breathtaking 70% from its 2021 high of almost $300 per share) to establish a small position in Teladoc.”
