Below we present the list of Top 5 Large-Cap Healthcare Stocks to Buy Now. For our methodology and a more comprehensive look at Henrik Rhenman’s Rhenman & Partners Asset Management and the healthcare fund’s top stock picks, check out Top 10 Large-Cap Healthcare Stocks to Buy Now.
5. Cigna Corporation (NYSE:CI)
Cigna Corporation (NYSE:CI) starts the second half of our list, as Rhenman & Partners Asset Management owned 140,000 shares of CI on December 30, selling off 10,000 shares during Q4. As with Humana and several other healthcare stocks, hedge fund ownership of Cigna fell during Q3, dipping by 14%.
Billionaire investing icon Leon Cooperman was not one of them, as he pitched the stock during a November CNBC interview, praising it for its low forward P/E and good story. Cigna grew its adjusted revenue by 14% during 2020 alongside adjusted EPS of $18.45. Cigna grew its Medicare Advantage membership by 18% last year.
4. Eli Lilly and Company (NYSE:LLY)
Rhenman & Partners Asset Management owned bought 10,000 shares of Eli Lilly and Company (NYSE:LLY) during Q4, lifting its holding to 180,000 shares valued at $30.39 million on December 30. LLY shares have been on a massive roll since the beginning of November, gaining over 50%.
Some of those gains were triggered by Eli Lilly posting strong 2020 results in January. Sales for the year grew by 10% to $24.5 billion, including a 22% surge during Q4, which was driven by over $870 million in sales for its Covid-19 antibody treatment. LLY shares also spiked in mid-January following the release of positive results from the trial for its experimental Alzheimer’s drug, which significantly slowed cognitive decline compared to placebo among patients demonstrating early signs of Alzheimers.
3. UnitedHealth Group Inc. (NYSE:UNH)
UnitedHealth Group Inc. (NYSE:UNH) is o1wne of the oldest holdings in Rhenman’s 13F portfolio, dating back to 2013. The fund sold 5,000 UNH shares during Q4, leaving it with 105,000. 89 hedge funds were long UNH at the end of Q3, down from over 100 six months earlier, though the stock maintained its standing as one of the 30 Most Popular Stocks Among Hedge Funds.
UnitedHealth acquired Change Healthcare at the beginning of 2021 in a deal valued at close to $13 billion, which includes United taking on $5 billion in debt. The data analytics company will be folded into UnitedHealth’s OptumInsight division and should enable it to further boost earnings, with the company forecasting the deal will add $470 million to its 2022 adjusted earnings.
2. Medtronic plc (NYSE:MDT)
Medtronic plc (NYSE:MDT) lands in the penultimate position after Rhenman & Partners boosted its stake in the company by 44% during Q4, giving it 320,000 shares. It was one of 62 hedge funds that were long MDT on September 30.
While Medtronics’ revenue was down by just under 1% year-over-year during Q2, it did record strong double-digit quarterly growth in all of its major segments as hospitals less burdened by Covid patients began performing more operations that utilize Medtronics’ medical devices. Results could slide again in the short term however as Covid cases rise and eat up more of hospitals’ resources.
1. AbbVie Inc (NYSE:ABBV)
Topping the list is AbbVie Inc (NYSE:ABBV), which Rhenman owned 500,000 shares of on December 30, ranking it as the fund’s top stock pick supplanting mid-cap BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) atop its 13F portfolio.
The dividend aristocrat had a big Q4, growing revenue by 59% year-over-year to $13.9 billion. Autoimmune disorder treatment Humira was again AbbVie’s top seller pulling in $5.1 billion in sales. AbbVie has several other strong performers during the quarter, including Venclexta (sales up 46.2%) and Vraylar (sales up 38%). The 2023 exclusivity loss of Humira, which is projected to lead to a sales decline that year, could weigh over the stock in the near-term but AbbVie projects returning to solid high-single-digit growth in the second-half of the 2020’s.
If you’re in the mood for some potentially mouth-watering returns, don’t miss the list of the 10 Best Water Stocks and ETFs to Buy in 2021.
Please also see 12 Best Genomic Stocks To Buy Now and 10 Cheap Healthcare Stocks To Invest In.
Disclosure: None.
