Billionaire Jeffrey Talpins Just Fled From These 10 Healthcare Stocks

Published July 7, 2022 at 10:15 am EDT Updated September 7, 2026 at 2:17 pm EDT

In this article we look at why Billionaire Jeffrey Talpins Just Fled From These 10 Healthcare Stocks.

Moderna, Inc. (NASDAQ:MRNA), Thermo Fisher Scientific Inc. (NYSE:TMO), and Danaher Corporation (NYSE:DHR) are three of the healthcare stocks that billionaire money manager Jeffrey Talpins has been unloading in 2022.

Jeffrey Talpins’ Element Capital Management is a New York-based hedge fund that Talpins launched with $250 million in 2005. It has since grown to become a powerhouse in the industry, managing over $48 billion in assets as of March 2022 and making its founder and chief investment officer a billionaire in the process, with a fortune estimated at $2.2 billion by Forbes.

Talpins graduated from Yale where he studied economics and applied mathematics with a focus on finance, which would serve him well in his later roles as a trader at Goldman Sachs and Citigroup. He carried his experience from those roles over to Element Capital, where he employs a macro investing approach, investing across stocks, bonds, and currencies.

Billionaire Jeffrey Talpins Just Fled From These 10 Healthcare Stocks

Jeffrey Talpins of Element Capital

Element Capital has consistently ranked among the upper echelon of hedge funds, appearing in the Barron’s Top 100 Hedge Funds list eight times between 2008 and 2017. Through August 2018 the fund’s annualized returns stood at an exceptional 21%, obliterating the broader hedge fund industry during that period.

Element Capital did have a down year in 2021 however, losing 9% even as many other macro trading hedge funds were outperforming the market. Element Capital was also off to a shaky start in 2022, being down 2.7% in January.

Perhaps given the fund’s recent struggles, Talpins massively shook up its 13F portfolio in Q1, slashing its assets down to $200 million from $1.55 billion a quarter earlier and investing across a much wider range of equities. Talpins axed 36 of his fund’s former holdings during Q1, and massively reduced his position in all but one of his other positions, while adding 125 new holdings to Element’s portfolio.

Talpins also drastically shook up his sector allocation during the quarter, greatly cutting his exposure to healthcare, consumer staples, and consumer discretionary stocks, while building up stakes in tech, industrial, and transportation stocks in their place.

In this article we’ll look at ten healthcare stocks that Talpins was cutting loose from Element Capital’s portfolio during Q1 as he turned his eyes towards other investment opportunities.

Our Methodology

The following data is gathered from Element Capital Management‘s latest 13F filing with the SEC. We follow hedge funds like Element Capital Management because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.

All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q1 2022 reporting period.

Billionaire Jeffrey Talpins Just Fled From These 10 Healthcare Stocks

10. Convey Health Solutions Holdings Inc (NYSE:CNVY)

Former Value of Element Capital Management‘s 13F Position: $1.31 million

Number of Hedge Fund Shareholders: 16

Convey Health Solutions Holdings Inc (NYSE:CNVY) joined Moderna, Inc., Thermo Fisher Scientific Inc., and Danaher Corporation as some of the healthcare stocks that Jeffrey Talpins was fleeing from in Q1. Several hedge funds have fallen off the Convey Health Solutions Holdings Inc bandwagon since the company’s IPO in the second quarter of 2021.

27 of the select group of hedge funds that are tracked by Insider Monkey’s database were long CNVY at the end of its first quarter on the market, a figure that had fallen to just 16 by the end of March 2022. After selling off 39% of its Convoy Health position in Q4, Element Capital unloaded another 77% of its remaining position during Q1.

As it turned out, Talpins and other money managers missed out on Convey Health Solutions Holdings Inc shares skyrocketing by over 135% after it was announced that the company would be taken private by TPG Capital at $10.50 per share, about a 143% premium to what CNVY shares were trading at before the merger was announced. Convey’s board has approved the deal, which is expected to close in the second half of this year.

9. Pfizer Inc. (NYSE:PFE)

Former Value of Element Capital Management‘s 13F Position: $148 million

Number of Hedge Fund Shareholders: 80

Next up is Pfizer Inc. (NYSE:PFE), which Jeffrey Talpins’ hedge fund unloaded a significant position in during Q1. The fund sold off 98% of its former stake in the pharmaceutical giant, which ranked as its top stock pick at the end of 2021. It was also a newly added position during that quarter, as Talpins invested in and then quickly divested himself of Pfizer and several other healthcare stocks between October 1 and March 31.

Pfizer Inc. has become embroiled in a lawsuit with Enanta Pharmaceuticals Inc (NASDAQ:ENTA), which was just recently granted a patent for its protease inhibitor COVID drug that the firm now accuses Pfizer of having violated in the creation of its antiviral pill Paxlovid. Enanta is seeking a jury trial in the case, with the aim of securing royalties on Pfizer’s sales of the drug, which totaled $1.5 billion in the first quarter.

Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) has also accused Pfizer Inc. of patent infringement when it comes to the delivery technology used by Pfizer’s blockbuster vaccine, sales of which are expected to top $30 billion this year. Pfizer has refuted those allegations, claiming the tech was irrelevant to the vaccine’s success.

8. Johnson & Johnson (NYSE:JNJ)

Former Value of Element Capital Management‘s 13F Position: $109 million

Number of Hedge Fund Shareholders: 84

Johnson & Johnson ranked as Element Capital’s 4^th-largest 13F position heading into 2022 after the fund bought 635,767 JNJ shares during Q4. A quarter later and the fund appears to be headed for the exits, as it sold off 98% of those shares during Q1. Hedge fund ownership of pharmaceutical products manufacturer and drug developer has stayed remarkably steady over the past several years, as many hedge funds appear content to take the long view with JNJ shares.

Johnson & Johnson shares have gained 4% this year as the company is likely viewed as a good safe haven investment to hold during the current and future economic turbulence. Johnson & Johnson, which pulled in $93 billion in revenue last year, has a diverse lineup of products that are likely to be fairly recession proof, including Tylenol, Johnson’s Baby, and Listerine.

The 2008 financial crisis provides a possible glimpse into how Johnson & Johnson is likely to fare in the coming years, and the company not only survived but thrived during the crisis, growing its net income every year throughout the 2007-2013 period. JNJ’s sales grew by 5% year-over-year in the first quarter, hitting $23.43 billion, while its gross profit grew by 3.7% to $15.83 billion.

7. Eli Lilly and Company (NYSE:LLY)

Former Value of Element Capital Management‘s 13F Position: $86.8 million

Number of Hedge Fund Shareholders: 53

Element Capital also took a large position in Eli Lilly and Company (NYSE:LLY) during the fourth quarter before promptly unloading 99% of that holding during the first three months of 2022. Hedge fund ownership of LLY has dipped by 20% since peaking in the middle of 2021.

Eli Lilly and Company shares have also been strong in 2022, gaining over 20%. The company’s intriguing pipeline of treatments that target diabetes and obesity, two of the greatest epidemics in the U.S today, have the potential to be blockbusters. Eli Lilly’s glycemic control treatment Mounjaro has been pegged by research firm Evaluate Pharma as having a net present value of $22.1 billion. The research firm also thinks highly of Eli Lilly’s Alzheimer’s treatment donanemab, which it pegs at $12.4 billion in NPV.

The Baron Health Care Fund is also bullish on Eli Lilly and Company’s potential blockbuster Alzheimer’s treatment, as well as the company’s future growth outlook, sharing this in its Q1 2022 investor letter:

“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company with a diverse offering primarily focused on therapeutics. Performance was strong mostly due to consistent financial growth powered by its core diabetes (and future obesity) franchise, as well as the constant drumbeat surrounding the Alzheimer’s therapeutic market, of which Eli Lilly has one of the three potential winning blockbuster candidates in Donanemab. We retain conviction in Eli Lilly given the company’s strong long-term growth outlook.”

6. Quest Diagnostics Incorporated (NYSE:DGX)

Former Value of Element Capital Management‘s 13F Position: $11.46 million

Number of Hedge Fund Shareholders: 38

Closing out the first half of the list is Quest Diagnostics Incorporated (NYSE:DGX), the clinical laboratory company that Element Capital unloaded from its 13F portfolio in Q1, a quarter after building a new stake in the company. DGX shares went on a torrid run coming out of their pandemic floor, gaining 136% through the end of 2021, but have lost 23% of their value this year.

With Covid testing on the decline, Quest Diagnostics Incorporated’s revenue is likewise falling, dipping by 4% year-over-year in Q1 to $2.61 billion, with testing slowing further as the quarter went on. Despite those headwinds, the company raised its full-year top and bottom-line guidance, thanks in part to Covid emergency measures being extended into July. The company is also confident that its direct-to-consumer business can pick up the Covid testing slack. That business doubled its sales during the first quarter.

The Davis Opportunity Fund is bullish on the healthcare space given the aging demographics of the United States. It cited Quest Diagnostics Incorporated as one of its holdings primed to take advantage of that trend in its Q4 2021 investor letter:

“Healthcare is included in the portfolio both for company-specific reasons, as well as big picture trends. At the company level, we hold select companies in pharmaceuticals, healthcare services and health insurance at attractive valuations. This is at a time when the average age of the U.S. population is fast approaching 40, older than Asia-Pacific and a little younger than the aged populations of Europe and Japan. The number of seniors in the U.S.—i.e., 65 years or older— now surpasses 54 million, or about 15% of the population. Seniors, on average, take a much greater number of medications and account for a large and disproportionate share of healthcare spending, and we expect that trend to continue due to both raw demographics and a proliferation in the number of available treatments and services available now, the latter being driven by innovation and investment in the healthcare industry. Representative holdings in the Fund include Cigna, United Health Group, Viatris and Quest Diagnostics.”

In the second half of this article we’ll look at five other healthcare stocks that Jeffrey Talpins was fleeing from in Q1, including Moderna, Inc., Danaher Corporation, and Thermo Fisher Scientific Inc..

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 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’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.”

4. Thermo Fisher Scientific Inc. (NYSE:TMO)

Former Value of Element Capital Management‘s 13F Position: $34.6 million

Number of Hedge Fund Shareholders: 101

More hedge funds have taken long positions in Thermo Fisher Scientific Inc. than ever before following four straight quarters of rising hedge fund ownership of the stock. Talpins’ fund was on that buying bandwagon in Q4, taking a new position of 51,823 shares in the life sciences company. The fund hopped off the bandwagon in Q1 however, unloading its entire stake in the company.

While Thermo Fisher Scientific Inc.’s Covid-related revenue also fell heavily during Q1, slumping by over 30% to $1.7 billion, the company was able to overcome that and grow its overall sales by nearly $2 billion to $11.8 billion. PPD, which Thermo Fisher acquired in December, contributed heavily to those gains, boosting revenue by $1.7 billion in the first quarter. The laboratory supplies and clinical research company appears to be well positioned to capture more of the growing healthcare market, which is projected to grow by more than 7% annually through 2027.

The ClearBridge Investments Sustainability Leaders Strategy loves the fertility benefit management services that Thermo Fisher Scientific Inc. provides to clients, saying this about the company in its Q4 2021 investor letter:

“Improving health remains a key impact theme for the portfolio, and over the past year or so we have increased our exposure to the health care sector, through the addition of Thermo Fisher Scientific, a leading health care tools company, a leading provider of fertility benefit management services to self-insured employers that offers a rare win-win-win for employers, employees, health systems, and doctors, with clear savings and quality improvements.”

3. Moderna, Inc. (NASDAQ:MRNA)

Former Value of Element Capital Management‘s 13F Position: $38.5 million

Number of Hedge Fund Shareholders: 41

Element Capital also built a new stake in Moderna, Inc. during the fourth quarter, perhaps eyeing one of the 5 Stocks to Buy Before the Next Pandemic as an intriguing buy in the midst of the omicron variant’s rapid spread around the world. By Q1 however, the fund had unloaded its entire stake in the vaccine developer and biotech firm.

Moderna, Inc. is far from done with Covid, as the company’s booster shots for the omicron variants appear to be poised for action come this fall after the FDA approved their use earlier this month. Those variants have proven to be even more transmissible than omicron itself, and the Biden administration has warned of yet another wave of Covid descending upon us later this year.

The latest news comes just two weeks after Moderna, Inc.’s vaccine was also approved for use in children as young as six months old, opening another pathway to increased deliveries of vaccine doses. Moderna previously projected that its mRNA vaccine would generate $19 billion in sales this year, a figure that could rise substantially should the omicron variants gain a foothold.

2. BioNTech SE (NASDAQ:BNTX)

Former Value of Element Capital Management‘s 13F Position: $40.1 million

Number of Hedge Fund Shareholders: 29

Element Capital was also loading up on another major player in the vaccine space during Q4, BioNTech SE (NASDAQ:BNTX), which has a strong vaccine collaboration in place with Pfizer Inc., which had ranked as Element Capital’s top stock pick at the end of last year. The fund unloaded nearly its entire Pfizer stake during Q1, and did sell off its entire BNTX position during the quarter as it looks to target other investment areas.

BioNTech SE has been the beneficiary of the some of the same positive news as Moderna, with the U.S government recently ordering another 105 million doses of the company’s Comirnaty vaccine, with an option to purchase a further 195 million doses. Pfizer estimated the companies’ co-developed vaccine would generate $32 billion in sales this year.

BioNTech SE also has a booster candidate that’s currently in phase 2/3 testing which has shown strong efficacy against several omicron variants, including the most dominant strains. A resurgence of Covid would certainly be a short-term boon for the company, which pulled in $22 billion in revenue last year, a figure that analysts predict will crash to just $3.1 billion by 2026.

1. Danaher Corporation (NYSE:DHR)

Former Value of Element Capital Management‘s 13F Position: $47.2 million

Number of Hedge Fund Shareholders: 87

Topping the list of healthcare stocks that Jeffrey Talpins was fleeing from in Q1 is Danaher Corporation. Talpins’ fund bought 143,552 shares of DHR during Q4, ranking the stock as its 11^th-largest 13F position. It sold out of the stake entirely during the first quarter. Danaher has steadily grown in popularity among hedge funds over the last three-plus years, with smart money ownership of DHR rising by 71% during that time.

Danaher was recently upgraded to ‘Outperform’ from ‘Sector Perform’ by RBC Capital analyst Deane Dray, who believes the market is overreacting to the tough Covid comps the company will face this year. The analyst has a $310 price target on the stock, up from $299.

While Danaher Corporation’s slowing Covid testing sales growth is weighing on the company’s overall growth, its core businesses are performing quite well, particularly when it comes to the company’s monoclonal antibodies pipeline, which has grown by 50% over the last five years.

The Cooper Investors Global Equities Fund is confident that Danaher Corporation will rebound from its Q1 weakness, having this to say about the company in its Q1 2022 investor letter:

“This combination of attributes was not in favour during a quarter where the market rotated into larger, more traditional index heavyweights that, while growing more slowly and generating lower returns on capital, typically trade on lower headline multiples. In Healthcare for example, we saw portfolio holdings Danaher fall 10-15% in the quarter. Given the relative business quality and growth prospects for a life sciences capital allocator champion like Danaher versus a large diversified pharma company, we think this period of underperformance is likely more a blip than a trend.”

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