In this article we’ll examine why Billionaire Jeffrey Talpins Just Fled From These 5 Healthcare Stocks. For our methodology and a more comprehensive list of stocks the money manager has been selling, please see Billionaire Jeffrey Talpins Just Fled From These 10 Healthcare Stocks.
5. Laboratory Corporation of America Holdings (NYSE:LH)
Former Value of Element Capital Management‘s 13F Position: $17.4 million
Number of Hedge Fund Shareholders: 49
Jeffrey Talpins’ Element Capital Management was one of many hedge funds to unload their positions in Laboratory Corporation of America Holdings (NYSE:LH) during Q1, as the number of funds long LH fell by 21% during the quarter. Bruce Kovner’s Caxton Associates and Zach Schreiber’s Point State Capital were among the other funds offloading their LH positions in Q1.
Laboratory Corporation of America Holdings (NYSE:LH) is another Covid testing company that Jeffrey Talpins unloaded during Q1. The company missed revenue estimates in Q1 and saw its adjusted operating income slump 34.2% compared to Q1 2021. Margins also contracted quite a bit, as gross margin declined by 681 basis points to 31.6% and adjusted operating margin fared even worse. On the plus side, LabCorp has a $15.2 billion backlog as of March 31, nearly a third of which the company expects to show up as revenue over the next year.
The Vltava Fund has been impressed by the growth and profitability of Laboratory Corporation of America Holdings (NYSE:LH)’s Covid-19 PCR testing, while admitting in its Q4 2021 investor letter that the number of tests the company performs is likely to drop substantially in the near future:
“Three companies that most pleasantly surprised us by their profitability last year (including) LabCorp. LabCorp is earning a lot on COVID-19 PCR tests. While 2 years ago this business did not exist at all, today it is driving the company’s huge growth in profitability. Although we expect – and hope – that the number of tests performed will drop significantly soon (and by the way, LabCorp is able to do 250,000 of them daily), LabCorp’s profitability over the past 2 years has very pleasantly surprised us.”