3. Abbott Laboratories (NYSE: ABT)
Number of Hedge Fund Holders: 64
Abbott ranks 3rd on the list of 10 best pharma stocks to buy now. Apart from a strong pipeline of products, the company is set to benefit from the COVID-19 testing boom all over the world. Abbott offers eight types of COVID-19 tests. The company gave full-year 2021 profit above analysts’ estimates in January. In the fourth quarter of 2020 alone, the company sold over 300 million test kits, raking in a revenue of $2.4 billion. The stock is up 66% over the last 12 months.
As of the end of the fourth quarter, 64 hedge funds in Insider Monkey’s database of 887 funds held stakes in ABT, compared to 62 funds in the third quarter. GQG Partners is the biggest stakeholder in the company, with 14.3 million shares, worth $1.6 billion.
Polen Global Growth, in their Q4 2020 investor letter, said that they added their position in Abbott Laboratories (NYSE: ABT) because of the company’s increasing sales of COVID tests. Here is what Polen Global Growth has to say about Abbott Laboratories in their investor letter:
“During the quarter, we added our position in Abbott Laboratories. We felt it was prudent to reallocate capital to faster-growing companies with greater business momentum like Abbott. Abbott Labs was in a favorable position to grow durably before COVID-19 swept across the world. The company pivoted rapidly to help societies manage the disease’s spread by creating accurate and rapid tests. Abbott has now sold over 100 million COVID tests globally and is building manufacturing capacity to meet further demand for testing around the world. In the company’s most recent quarter alone, it generated $880 million in COVID-related testing sales, likely influenced by the release of the company’s BinaxNOW COVID-19 rapid test, which can detect COVID in just 15 minutes with no instrumentation required (this is Abbott’s 6th COVID-19 test).
Abbott met the moment when COVID-19 became a global pandemic by going into overdrive to manufacture millions of tests
per month. These capabilities have become an accelerant to company revenue growth.With Abbott’s other business segments potentially returning to pre-COVID-19 growth in the near future, we believe the company is even better positioned than before the global pandemic to generate double-digit EPS growth during the next five years. It is difficult to know how long COVID testing will remain a meaningful driver of growth or how long the world will be dealing with the disease. That said, it has allowed Abbott to meaningfully grow its installed base of testing equipment and systems, which are capable of testing and detecting a whole host of many other diseases. Given the combination of these variables, we raised the position to an above-average weight. It is currently one of our largest positions within the Portfolio.”
