In this article, we discuss 5 stocks to buy according to Stephen DuBois’ Camber Capital Management. If you want to read our detailed analysis of DuBois’ history, investment philosophy, and hedge fund performance, go directly to 10 Stocks to Buy According to Stephen DuBois’ Camber Capital Management.
5. Gilead Sciences, Inc. (NASDAQ:GILD)
Camber Capital Management’s Stake Value: $148,625,000
Percentage of Camber Capital Management’s Portfolio: 5.37%
Number of Hedge Fund Holders: 68
Gilead Sciences, Inc. (NASDAQ:GILD) is an American bio-pharmaceutical company researching and creating antiviral medications used to treat COVID-19, hepatitis B, hepatitis C, influenza, and HIV/AIDS. Those medications include ledipasvir/sofosbuvir.
On May 23, David Risinger, an analyst at SVB Leerink, initiated coverage of Gilead Sciences (NASDAQ:GILD), assigning a ‘Market Perform’ rating and a price objective of $68. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital stood as the largest shareholder of Gilead Sciences (NASDAQ:GILD) in the first quarter, with a $1.07 billion stake representing a 325% increase in holding size over the previous quarter.
Gilead Sciences, Inc. (NASDAQ:GILD) was in 68 hedge funds’ portfolios at the end of the first quarter of 2022, compared to 54 funds in the fourth quarter of 2021. Gilead Sciences, Inc. (NASDAQ:GILD) shares have lost 8.84% over the past 12 months as of July 4.
With an estimated net worth of $62.57 million, DuBois first picked up Gilead Sciences, Inc. (NASDAQ:GILD) for Camber Capital Management’s portfolio in the second quarter of 2016. The hedge fund increased its stake by 12% in Q1 to bring its total holding up to 2.50 million shares worth $149 million as of March 31.
In its Q4 2021 investor letter, ClearBridge Investments mentioned Gilead Sciences, Inc. (NASDAQ:GILD). Here is what the firm said:
“Other pharma companies are providing solutions as well. Biopharmaceutical company Gilead Sciences’ remdesivir, sold under the brand name Veklury, is a broad-spectrum antiviral medication administered by intravenous infusion; it can shorten the time to recovery in hospitalized patients and reduce the risk of hospitalization and death in non-hospitalized patients.”
4. Zimmer Biomet Holdings, Inc. (NYSE:ZBH)
Camber Capital Management’s Stake Value: $172,665,000
Percentage of Camber Capital Management’s Portfolio: 6.24%
Number of Hedge Fund Holders: 33
Zimmer Biomet Holdings, Inc. (NYSE:ZBH) develops, produces, and sells orthopedic reconstructive implants and surgical equipment. Elite hedge funds were less interested in Zimmer Biomet Holdings, Inc. (NYSE:ZBH) at the end of the first quarter than they were a quarter earlier; 33 hedge funds disclosed having long positions in the business as of March 31, down from 43 funds a quarter earlier.
Camber Capital Management has held a stake since Q1 2021. In addition, the hedge fund turned bullish in the first quarter of 2022, as it upped the size of its Zimmer Biomet Holdings, Inc. (NYSE:ZBH) holding by 35%, or 320,000 shares. With nearly 1.35 million shares worth $172.67 million as of March 31, Zimmer Biomet Holdings, Inc. (NYSE:ZBH) stands in fourth position in the portfolio of DuBois’ Camber Capital Management.
Analyst Joanne Wuensch of Citi maintained a ‘Neutral’ rating on Zimmer Biomet Holdings, Inc. (NYSE:ZBH)’s shares on May 17 and lowered her price target on them from $135 to $125. Wuensch warned investors in a research report that higher inflation, slower growth, and rising interest rates have caused market multiples to contract.
Ariel Investments, an investment management firm, mentioned Zimmer Biomet Holdings, Inc. (NYSE:ZBH) in its Q4 2021 investor letter. Here is what the fund said:
“A reopening of the global economy with a reduction in the severity of the pandemic has led us to invest in companies that would perform well with an end to Covid restrictions such as canceled sports and entertainment events or companies that would benefit from pent-up demand for consumer products. Healthcare holdings such as Zimmer Biomet Holdings Inc. (ZBH) saw demand for their “elective” healthcare services decline sharply as hospitals lost capacity for non-essential surgeries or orthotics. We believed those companies should see a rebound in their business as cases decline. Unfortunately, two new Covid variants turned this theme from a tailwind to a headwind in the second half of the year. First, Delta then Omicron sent Covid cases higher and both companies saw their businesses slow again. Zimmer’s stock lost -13.04% in the fourth quarter. As we write, we believe Omicron cases could be nearing a peak which would allow our thesis to better play out this year.”
3. Sanofi (NASDAQ:SNY)
Camber Capital Management’s Stake Value: $205,360,000
Percentage of Camber Capital Management’s Portfolio: 7.42%
Number of Hedge Fund Holders: 19
Sanofi (NASDAQ:SNY) is a global French healthcare corporation headquartered in Paris, France. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) announced on July 1 that it had successfully acquired Sanofi (NASDAQ:SNY)’s interest in Libtayo. As a result, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) would own the exclusive rights to produce the medicine that was first created in Regeneron’s research labs and commercialize it globally.
On June 7, UBS analyst Laura Sutcliffe maintained a ‘Buy’ recommendation on Sanofi (NASDAQ:SNY), while increasing her price objective to EUR 119 from EUR 118. In addition, Camber Capital Management elevated its position in Sanofi (NASDAQ:SNY) by 6% in Q1 2022, holding 4 million shares worth over $205 million. The stock accounted for 7.42% of the fund’s total 13F portfolio.
According to Insider Monkey’s database, 19 hedge funds had a stake in Sanofi (NASDAQ:SNY) as of Q1 2022, with the total value of their holdings standing at $1.57 billion. Ken Fisher’s Fisher Asset Management held the most significant stake in Sanofi (NASDAQ:SNY) at the end of the first quarter of 2022, valued at $920.67 million.
Here’s what Dodge & Cox Stock Fund said about Sanofi (NASDAQ:SNY) in its Q3 2021 investor letter:
“Sanofi (3.5% position) is a diversified, global pharmaceuticals company with leading positions in vaccines, consumer health products, rare diseases, and emerging markets. Despite a favorable business mix, Sanofi has underperformed its peers in new product development, commercial execution, and profit growth. A new management team, recruited in 2018-19, has made progress turning the company around. Its drug pipeline is improving, targets for higher margins are being met, and earnings per share are growing. Sanofi also pays a 4% dividend yield, maintains a strong balance sheet, and has relatively low exposure to potential pressures from U.S. drug pricing.”
2. Universal Health Services, Inc. (NYSE:UHS)
Camber Capital Management’s Stake Value: $231,920,000
Percentage of Camber Capital Management’s Portfolio: 8.38%
Number of Hedge Fund Holders: 40
Universal Health Services, Inc. (NYSE:UHS) is a national supplier of hospital and healthcare services devoted to enhancing people’s lives and revolutionizing healthcare delivery. DuBois’ Camber Capital Management first acquired a position in Universal Health Services, Inc. (NYSE:UHS) in Q4 2012. It spent $44.99 on average for each share. The hedge fund sold 4% of its Universal Health Services, Inc. (NYSE:UHS) shares in the first quarter. With the sale of almost 50,000 shares, it ended the first quarter owning 1.60 million shares of Universal Health Services, Inc. (NYSE:UHS).
On July 1, Mizuho analyst Ann Hynes maintained a ‘Buy’ recommendation on Universal Health Services, Inc. (NYSE:UHS) while reducing her price target on UHS shares to $121 from $153. After polling 210 physicians across 14 specialties, the analyst concluded that nurse wage pressure remained a significant obstacle even if sequential volume trends continued to improve. Overall volumes were still below 2019 pre-pandemic levels.
Out of the hedge funds that are tracked by Insider Monkey, New York-based investment firm First Eagle Investment Management was the leading shareholder of Universal Health Services, Inc. (NYSE:UHS), with 4.16 million shares worth more than $602.34 million.
Overall, 40 hedge funds owned positions in Universal Health Services, Inc. (NYSE:UHS) at the end of March with a collective value of $623.14 million. This was an increase of 5 hedge funds from the previous quarter, when 35 hedge funds owned stakes in Universal Health Services, Inc. (NYSE:UHS).
1. Viatris Inc. (NASDAQ:VTRS)
Camber Capital Management’s Stake Value: $250,240,000
Percentage of Camber Capital Management’s Portfolio: 9.05%
Number of Hedge Fund Holders: 55
Viatris Inc. (NASDAQ:VTRS) is a healthcare firm that operates globally. Viatris Inc. (NASDAQ:VTRS) was losing popularity with the smart money in Q1, as the number of long hedge fund positions fell by 3. Viatris Inc. (NASDAQ:VTRS) was in 55 hedge funds’ portfolios at the end of March.
UBS analyst Ashwani Verma initiated coverage of Viatris Inc. (NASDAQ:VTRS) on June 13, assigning a ‘Sell’ rating and $9 price target. The analyst said that given the company’s valuation, it faced significant downside risk since consensus predictions did not consider declining sales and EBITDA, sluggish spin-offs, and weaker dividend growth.
According to hedge fund data compiled by Insider Monkey, Laurion Capital Management had the most valuable position in Viatris Inc. (NASDAQ:VTRS), worth close to $319.79 million, comprising 3.91% of its total 13F portfolio. Second on the list is Camber Capital Management, led by Dubois. The hedge fund upped its stake in Viatris Inc. (NASDAQ:VTRS) by 44% in Q1. Camber Capital Management held 23 million shares worth $250.24 million as of March 31. At 9.05% of the portfolio – up from 7.43% in Q4 – Viatris Inc. (NASDAQ:VTRS) is the largest holding of DuBois’ Camber Capital Management.
Davis Funds, an investment management firm, mentioned Viatris Inc. (NASDAQ:VTRS) and discussed its stance on the firm in its Q4 2021 investor letter. Here is what the fund said:
“Davis Global Fund added several new positions over the past year, including the pharmaceutical Viatris. Viatris is an unloved global pharmaceutical manufacturer created through the merger of Mylan and Upjohn (Pfizer’s off-patent drugs business). The company is highly diversified, with leading positions across a wide span of generic and specialty/partnered drugs in many countries around the world. While growth for the portfolio overall is moderated by pricing pressures in traditional generics, Viatris has an attractive pipeline of complex drugs (e.g., inhaled drugs, injectables, etc.) and biosimilars, the latter of which are poised to see growth in the years ahead after a long period of regulatory and legal deadlock in the U.S.
Near-term, Viatris is committed to using free cash flow to pay down debt, but we believe its extremely cheap valuation (4–5x owner earnings) and growing cash generation offers a compelling risk/reward proposition that should eventually be recognized by the market.”
You can also take a peek at 7 Stocks to Buy According to Eduardo Costa’s Calixto Global Investors and 10 Stocks to Buy According to BlueSpruce Investments.
