Baron Funds, an investment management company, released its “Baron Health Care Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. The fund advanced 9.22% (Institutional Shares) in the quarter compared to a 3.44% gain for the Russell 3000 Health Care Index (benchmark) and an 8.74% gain for the S&P 500 Index. Since its inception, on April 30, 2018, the fund gained 13.58% on an annualized basis, compared to the benchmark’s 10.85% gain and the S&P 500 Index’s 12.54% return. Favorable stock selection led the fund to outperform in the quarter. Investments in biotechnology, pharmaceuticals, and healthcare equipment accounted for most of the relative gains of the fund in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Health Care Fund highlighted stocks like Boston Scientific Corporation (NYSE:BSX) in the second quarter 2023 investor letter. Headquartered in Marlborough, Massachusetts, Boston Scientific Corporation (NYSE:BSX) develops, manufactures, and markets medical devices. On July 24, 2023, Boston Scientific Corporation (NYSE:BSX) stock closed at $52.17 per share. One-month return of Boston Scientific Corporation (NYSE:BSX) was -2.49%, and its shares gained 37.29% of their value over the last 52 weeks. Boston Scientific Corporation (NYSE:BSX) has a market capitalization of $75.005 billion.
Baron Health Care Fund made the following comment about Boston Scientific Corporation (NYSE:BSX) in its second quarter 2023 investor letter:
“We re-established a position in Boston Scientific Corporation (NYSE:BSX), a global developer, manufacturer, and marketer of medical devices that are used in a broad range of interventional medical specialties. We believe Boston Scientific can grow revenue reliably in the high single digits, driven by differentiated products in electrophysiology and structural heart. Coupled with cost discipline and over 50 basis points of annual operating margin expansion, we believe the company’s double-digit EPS growth profile makes Boston Scientific a compelling name within the large medical device universe.
Within electrophysiology, we think Boston Scientific is well positioned as a leader in the emerging field of pulsed field ablation (PFA). Traditionally, physicians have used temperature-based methods (either hot or cold) to disable heart tissue responsible for irregular heartbeats. Temperature-based methods may damage surrounding tissue, however. Examples include damaging the esophagus (food tube) and the phrenic nerve (which controls breathing). PFA, in comparison, relies on electricity to damage aberrant tissue, and because different types of tissue have different electrical thresholds, the surrounding tissue can be selectively spared. Boston Scientific is ahead of the pack with high-quality, randomized controlled trial data (Advent) to come out in the back half of 2023. Electrophysiology is an $8 billion market growing 12%, and we believe Boston Scientific can grow significantly above this market rate as it takes share with its PFA program.
Within structural heart, we like Boston Scientific’s position within left atrial appendage closure, which is a procedure that lowers stroke risk for atrial fibrillation patients. The company’s Watchman device continues to maintain dominant share (over 90%), and this is a $1 billion market growing over 25%. We are most excited about the potential for Watchman to expand into first-line therapy: currently patients would only get a Watchman if they cannot take anticoagulants because of bleeding risk; Boston Scientific is running the CHAMPION-AF trial to support Watchman as the first option. It has completed enrollment, and if the trial is successful, the company believes this has the potential to more than triple the addressable patients by 2027.”
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Boston Scientific Corporation (NYSE:BSX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 65 hedge fund portfolios held Boston Scientific Corporation (NYSE:BSX) at the end of first quarter which was 57 in the previous quarter.
We discussed Boston Scientific Corporation (NYSE:BSX) in another article and shared Viking Global’s performance, AUM, and long-term stock picks. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
