5 Healthcare Stocks Billionaires Are Loading Up On

In this article, we discuss 5 best healthcare stocks billionaires are loading up on. If you want to read our detailed discussion on the healthcare sector and its performance, go directly to read 15 Healthcare Stocks Billionaires Are Loading Up On.

5. Johnson & Johnson (NYSE:JNJ)

Number of Billionaire Investors: 17
Number of Hedge Fund Holders: 86

Johnson & Johnson (NYSE:JNJ) was one of the most popular healthcare stocks among billionaires. According to our database, billionaires Ken Griffin, D. E. Shaw, and Ray Dalio were some of the leading stakeholders in Q1. One of the main reasons for this inclination is the company’s long dividend growth history of 62 years. It currently offers a quarterly dividend of $1.19 per share and has a dividend yield of 3%, as of June 7.

In May, Citigroup resumed its coverage on Johnson & Johnson (NYSE:JNJ) with a Buy rating and a $185 price target. The firm highlighted that the company has ‘world-leading’ medical technology and pharmaceutical franchises.

According to Insider Monkey’s database, 86 hedge funds owned stakes in Johnson & Johnson (NYSE:JNJ) at the end of Q1 2023, up from 83 in the previous quarter. These stakes have a consolidated value of $4.5 billion.

4. Sarepta Therapeutics, Inc. (NASDAQ:SRPT)

Number of Billionaire Investors: 18
Number of Hedge Fund Holders: 57

Sarepta Therapeutics, Inc. (NASDAQ:SRPT) is an American medical research and drug development company that also specializes in genetic medicine. In May, RBC Capital boosted its price target on the stock to $218 with an Outperform rating on the shares, presenting a positive stance on the company’s outlook.

In the first quarter of 2023, Sarepta Therapeutics, Inc. (NASDAQ:SRPT) reported revenue of $253.5 million, which showed a 20.3% growth from the same period last year. At the end of March 2023, it had over $871.6 million in cash and cash equivalents.

As of the close of the March quarter, 57 hedge funds in Insider Monkey’s database owned stakes in Sarepta Therapeutics, Inc. (NASDAQ:SRPT), with a collective value of over $2.4 billion. Billionaire Thomas Steyer’s Farallon Capital was one of the company’s leading stakeholders in Q1.

3. The Cigna Group (NYSE:CI)

Number of Billionaire Investors: 18
Number of Hedge Fund Holders: 79

The Cigna Group (NYSE:CI) is a Connecticut-based multinational managed healthcare and insurance company. It reported revenue of $46.5 billion in Q1 2023, up 5.7% from the same period last year. The company’s income from operations came in at $1.6 billion. The Cigna Group (NYSE:CI) is also a dividend payer and currently pays a quarterly dividend of $1.23 per share. The stock’s dividend yield on June 7 came in at 1.88%.

At the end of Q1 2023, billionaire Ken Griffin’s Citadel Investment Group was the leading stakeholder of The Cigna Group (NYSE:CI). Overall, 79 hedge funds tracked by Insider Monkey owned stakes in the company, worth over $3 billion collectively.

Artisan Partners mentioned The Cigna Group (NYSE:CI) in its Q1 2023 investor letter. Here is what the firm has to say:

“The Cigna Group (NYSE:CI) delivered strong operating results that came in well ahead of the company’s initial guidance, yet the stock has continued to sell off since the beginning of 2023. It seems there are a few reasons for it: 1) concerns over the government targeting pharmacy benefit managers and trying to directly negotiate drug prices under the president’s new budget, 2) a potential normalization of elective procedures that increases medical costs, 3) a rotation by dedicated health care investors toward medical technology and technology areas and away from the safety of big pharma and HMOs, 4) disenrollment trends as it relates to the commercial book of business heading into a potential downturn, and 5) selling in the space as we approach another presidential election in 2024. Pick your poison, but the selling has taken the stock price back to its levels of mid-2022. Our investment case hasn’t changed. Cigna is one of the few managed care organizations in the US with the scale and size to compete effectively. In 2022, free cash flow was $7.4 billion, up $1.3 billion from 2021. Cigna paid down $3.5 billion of debt, repurchased $7.6 billion in stock and sold its life, accident and supplemental benefits business in Asia to Chubb that helped fund the share repurchases. In short, the business in performing well, and management is smartly allocating capital. Additionally, the stock is selling for less than 11X next year’s earnings, which is inexpensive.”

2. Elevance Health, Inc. (NYSE:ELV)

Number of Billionaire Investors: 19
Number of Hedge Fund Holders: 81

Elevance Health, Inc. (NYSE:ELV) is an American health insurance provider, which remained widely popular among billionaire investors in Q1 2023. In April, Morgan Stanley upgraded the stock to Overweight and also lifted its price target on the stock to $571. The firm noted the company’s strong potential for long-term earnings growth and its overall profile.

Elevance Health, Inc. (NYSE:ELV) is one of the strongest dividend payers, with 11 years of consecutive dividend growth. The company offers a quarterly dividend of $1.48 per share for a dividend yield of 1.23%, as of June 7.

Elevance Health, Inc. (NYSE:ELV) was a part of 81 hedge fund portfolios in Q1 2023, up from 75 in the previous quarter, as per Insider Monkey’s database. Billionaire Rajiv Jain’s GQG Partners was one of the company’s largest stakeholders in Q1.

1. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Billionaire Investors: 25
Number of Hedge Fund Holders: 116

UnitedHealth Group Incorporated (NYSE:UNH) tops our list of billionaire-owned healthcare stocks. The managed healthcare and insurance company was a part of 25 billionaire portfolios in our database, including those of Rajiv Jain, Ken Griffin, and Andreas Halvorsen, as of Q1 2023.

UnitedHealth Group Incorporated (NYSE:UNH) pays a quarterly dividend of $1.88 per share and has a dividend yield of 1.37%, as of June 7. The company has been growing its dividends consistently for the past 13 years.

At the end of March 2023, 116 hedge funds in Insider Monkey’s database owned positions in UnitedHealth Group Incorporated (NYSE:UNH), compared with 110 in the previous quarter. The stakes owned by these hedge funds have a collective value of over $11.7 billion.

Fred Alger Management mentioned UnitedHealth Group Incorporated (NYSE:UNH) in its Q1 2023 investor letter. Here is what the firm has to say:

“UnitedHealth Group Incorporated (NYSE:UNH) is an integrated healthcare benefits company uniquely positioned to address rising healthcare costs for its customers, due to its vertical integration, size, and scale. The Optum health benefits services unit, which accounts for approximately 45% of the company’s operating earnings, in our view, has the potential to grow even further as customers look for ways to manage rising healthcare costs. During the period, shares detracted from performance due to several factors: 1) many 2022 healthcare winners with shorter duration profiles and persistent earnings profiles, such as UnitedHealth Group. underperformed in the first quarter of 2023, 2) uncertainty surrounding Medicare Advantage reimbursement levels from the Federal government in 2023, which will be determined later in the year, and 3) increased regulatory scrutiny in the form of potential Medicare Advantage audits across the industry. While these concerns have impacted UnitedHealth in the near-term, we believe company fundamentals remain intact given its large scale business model, competitive advantages, and medium to long- term growth prospects.”

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