Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Healthcare Gurus at Baker Bros. Advisors Were Buying These Stocks in Q3

Baker Bros. Advisors has arguably been the most successful healthcare-focused hedge fund on the Street in recent years. Founded by brothers Julian Baker and Felix Baker in 2000, the New York-based hedge fund was managing around $250 million in assets back in 2003. However, in the last few years the fund has grown exponentially, scoring some major wins in the meantime, and as of April 25, 2016 managed regulatory assets north of $11.5 billion. According to the fund’s latest 13F filing, at the end of September, over 90% of that capital was invested in publicly traded healthcare companies in the United States.

As per the filing, Baker Bros. Advisors’ U.S equity portfolio was worth $11.02 billion at the end of the third quarter, which was 15% more than the $9.54 billion it was worth at the end of second quarter. The filing also revealed that the fund’s equity portfolio had a low quarterly turnover rate of only 12.88% during the third quarter and consisted entirely of healthcare stocks. Furthermore, the top-10 equity holdings of the fund accounted for almost 85% of the value of its portfolio at the end of September. In this article, we’ll take a look at the five major bullish moves made by the fund during the third quarter and will discuss how these stocks have performed recently.

 – Related Reading: 11 Countries with Free Health Care

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Felix Baker - Baker Bros.

#5 ContraFect Corp (NASDAQ:CFRX)

– Shares Held By Baker Bros. Advisors (as of September 30): 76,473

– Value of The Holding (as of September 30): 4.36 Million

ContraFect Corp (NASDAQ:CFRX) was a new entrant into Baker Bros. Advisors’ equity portfolio during the third quarter. ContraFect Corp (NASDAQ:CFRX) is a small-cap biotech company that focuses on developing therapeutic protein and antibody products for life-threatening and drug-resistant infectious diseases. The company had its IPO in September 2014 and has lost almost 60% of its market capitalization so far in 2016. For its most recent quarter, ContraFect Corp reported a loss of $0.28 per share, missing analysts’ EPS estimate by $0.07.

Follow Contrafect Corp (NASDAQ:CFRX)
Trade (NASDAQ:CFRX) Now!

#4 Advanced Accelerator Application SA (ADR) (NASDAQ:AAAP)

– Shares Held By Baker Bros. Advisors (as of September 30): 76,473

– Value of The Holding (as of September 30): 4.36 Million

Baker Bros. Advisors  upped its stake in Advanced Accelerator Application SA (ADR) (NASDAQ:AAAP) by 23% during the third quarter. Since being listed in the U.S in November of last year, shares of the France-based radiopharmaceutical company have appreciated by almost 40%. In September, Advanced Accelerator Application SA (ADR) (NASDAQ:AAAP) announced that the European Medicines Agency (EMA) had issued a positive opinion on the Marketing Authorization Application for its drug SomaKit TOC 40µg, for Positron Emission Tomography (PET) imaging of somatostatin receptor overexpression in adult patients with gastroenteropancreatic neuroendocrine tumors. Last month, analysts at Wells Fargo initiated coverage on the stock with an ‘Outperform’ rating.

We’ll check out three more of the fund’s Q3 stock purchases on the next page.