HealthCor Management’s Core Health Picks For Q3

HCA Holdings Inc (NYSE:HCA) was a new addition to Healthcor’s equity portfolio during the second quarter. The fund bought 1.35 million shares of the company, which were worth $122.47 million as of June 30. HCA Holdings Inc (NYSE:HCA) is one of the largest hospital operators in the United States. Shares of the company rose by 20.4% in the April-June period, mostly backed by the Supreme Court ruling in June that the U.S. federal government can continue to offer subsidies to U.S. citizens through the Affordable Healthcare Act (colloquially known as Obamacare). HCA Holdings Inc (NYSE:HCA) reported an earnings and revenue beat for the second quarter on August 5. EPS for the quarter came in at $1.37 on revenue of $9.90 billion, while analysts were expecting EPS of $1.34 on revenue of $9.82 billion. On August 14 the stock was reiterated as a ‘Buy’ by analysts at Mizuho Securities, who also upped their price target on it to $103 from $100, representing a potential 14% upside from the stock’s current trading price. Jeffrey Gates‘ Gates Capital Management also initiated a position in the stock by buying over 1.4 million shares during the second quarter.

Healthcor increased its position in Mallinckrodt PLC (NYSE:MNK) by 804% to 975,000 shares worth $114.77 million as of June 30. Mallinckrodt PLC (NYSE:MNK) is a Dublin, Ireland-based speciality pharmaceutical company. On August 10, it announced that it has agreed to buy Therakos Inc, an immunotherapy maker, in a $1.33 billion deal. Shares of Mallinckrodt have slumped by more than 20% since it reported its fiscal third quarter 2015 results on August 4, for the period ending June 30. Although the EPS of $2.05 the company reported was above analysts’ estimates of $1.82, revenue of $983.81 million, came in $18.71 million light of expectations. The stock was upgraded to a ‘Buy’ rating from ‘Market Perform’ by analysts at Leerink Swann on August 6. However, they lowered their price target to $112 from $133, which nonetheless represents a potential upside of over 15% from the stock’s current trading price. Even after reducing its position by 23% to over 6.5 million shares during the second quarter, John Paulson‘s Paulson & Co was the largest shareholder of Mallinckrodt PLC (NYSE:MNK) among the hedge funds we cover.

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