Arthur B. Cohen and Joseph Healey’s Healthcor Management LP recently filed its latest 13F with the SEC, disclosing its equity positions at the end of 2014. There has been a great deal of turnover among Healthcor’s top five picks, as only one pick from the previous quarter remains among its top choices. Meanwhile, three newly opened positions during the fourth quarter crack the top five.
As its name would suggest, Healthcor Management is a healthcare-focused hedge fund that was founded in 2005 by Cohen and Healey. The former is a “Tiger Cub”, who managed the healthcare investments of Julian Robertson’s Tiger Management from 1995 to 2000, while working as its managing director. Cohen later moved to SAC Capital Partners (now the family office Point72 Asset Management), working there until 2005. Healthcor was 93% invested in the healthcare sector at the end of 2014, with an equity portfolio valued at $1.79 billion.
One of those falling from the top five is Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), which was previously Healthcor’s top pick, and still ranked fourth at the end of the third quarter, even after Healthcor slashed over 25% of its position near the end of the third quarter. In the fourth quarter, Healthcor completely closed the position.
Mallinckrodt PLC (NYSE:MNK) is the one stock that remains in Healthcor’s top five, and not only that, it remains its top pick for the second straight quarter, though it did trim the position by 27% during the fourth quarter, down to 1.33 million shares. Mallinckrodt was one of Healthcor’s best picks in 2014, as it opened a position on the specialty pharmaceuticals company during the first quarter. Mallinckrodt soared 92.7% for the year, and is up another 19.77% year-to-date. All told, shares are up 172.67% since the company’s IPO in the summer of 2013.
John Paulson’s Paulson & Co. has been one of the biggest beneficiaries of that tremendous growth, having held 5.64 million shares at the end of the third quarter of 2013, which are now worth 150% what they were at the time, a windfall of more than $400 million. Paulson & Co. is still the largest shareholder among funds we track with 9.01 million shares.
Gilead Sciences, Inc. (NASDAQ:GILD) is Healthcor’s top new pick, as it opened a position on the biotech company during the fourth quarter consisting of 1.25 million shares. Best known for its Hepatitis C drug Sovaldi, which had $10.3 billion is sales in and 2014, and the HIV treatment Stribild, Gilead is in the midst of a strong three year run, up 350% during that time. Unsurprisingly, it’s been one of the top healthcare stocks among the funds we track, as well as a favorite stock among billionaires. Overall fund ownership has increased to 13.2% from 11.9%, and Ken Griffin and Steve Cohen are among the billionaires with stakes in Gilead.