雅虎香港財經 15 Healthcare Stocks Billionaires Are Loading Up On
In this article, we discuss 15 best healthcare stocks billionaires are loading up on. You can skip our detailed discussion on the healthcare sector and its performance, and go directly to read 5 Healthcare Stocks Billionaires Are Loading Up On.
The healthcare sector in the US is a multifaceted industry that plays a crucial role in providing medical services to the population. The sector overall includes healthcare providers, health insurers, MedTech companies, pharmaceuticals, and research and development companies. The healthcare sector demonstrated resilience over the years mainly because of its defensive nature. The stable demand for medical products and services also contributes to the sector’s performance during recessionary periods. BlackRock reported that the healthcare industry outperformed the broader market over the last seven recessionary periods by an average of 10.3%.
Last year’s financial turmoil altered the investment landscape as investors struggled to balance their portfolios due to persistent interest rate hikes and growing inflation. The healthcare sector emerged as one of the winners in 2022, with the S&P 500 Healthcare Index falling by just 2.44%, compared with an 18.5% decline in the S&P 500.
Also read: 15 Best Healthcare Stocks To Buy Now
Apart from their defensive nature, another reason for the outperformance of the healthcare sector is its adaptability to address the challenges and changes brought about by the pandemic of 2020. The rapid expansion of telehealth gave way to improved healthcare services, particularly for individuals in rural or underserved areas. In 2022, 68% of physicians offered virtual health options, up from 14% in the prior year, according to Deloitte’s data we reported in 14 Best Healthcare Dividend Stocks to Buy. We further highlighted that 57% to 80% of patients prefer telehealth services.
These advancements in medical technology and the long-term growth potential of healthcare stocks have billionaire investors gravitating toward these equities. Paul Tudor Jones of Tudor Investment Corp opened new positions in two leading healthcare companies, Abbott Laboratories (NYSE:ABT) and Johnson & Johnson (NYSE:JNJ), in the first quarter of 2023. In addition to this, the billionaire increased its position in CVS Health Corporation (NYSE:CVS) by 141% during the quarter.
The stellar performance of healthcare stocks attracted a large number of billionaire investors into the sector this year, as reported by Forbes. According to the report, 201 billionaires globally invest in the healthcare sector, making up 8% of the list.
Our Methodology:
For this article, we used Insider Monkey's database of billionaire-owned stocks for Q1'2023 and picked healthcare stocks with the highest number of billionaires. The stocks are ranked in ascending order of the number of billionaire investors having stakes in them.
15 Healthcare Stocks Billionaires Are Loading Up On
15. Humana Inc. (NYSE:HUM)
Number of Billionaire Investors: 15
Number of Hedge Fund Holders: 68
Humana Inc. (NYSE:HUM) is one of the leading health insurance providers in the US. In the first quarter of 2023, the company reported revenue of $26.7 billion, up 11.6% from the same period last year. The company's operating cash flow for the quarter came in at over $6.6 billion, compared with $308 million in the prior-year period. It is among the healthcare stocks billionaires are loading up on alongside Abbott Laboratories (NYSE:ABT), Johnson & Johnson (NYSE:JNJ), and CVS Health Corporation (NYSE:CVS).
In May, TD Cowen raised its price target on Humana Inc. (NYSE:HUM) to $616 with an Outperform rating on the shares, highlighting the company's business stability.
Humana Inc. (NYSE:HUM) is also a dividend stock and has raised its payouts for 6 years in a row. The company pays a quarterly dividend of $0.885 per share and has a dividend yield of 0.69%, as of June 7.
At the end of Q1 2023, 68 hedge funds tracked by Insider Monkey reported having stakes in Humana Inc. (NYSE:HUM), up from 67 in the previous quarter. These stakes have a collective value of over $3.78 billion. Billionaire Rajiv Jain's GQG Partners was the company's leading stakeholder in Q1.
14. Abbott Laboratories (NYSE:ABT)
Number of Billionaire Investors: 15
Number of Hedge Fund Holders: 70
Abbott Laboratories (NYSE:ABT) is an American multinational healthcare and medical devices company. In May, Morgan Stanley assumed its coverage on the stock with an Equal Weight rating and a $112 price target. The firm mentioned that the stock's valuation is now looking fair.
In the first quarter of 2023, the company posted revenue of $9.7 billion and reported a 10% year-over-year growth in its organic sales on an underlying basis. The company is also a Dividend King with 51 years of consecutive dividend growth. It pays a quarterly dividend of $0.51 per share for a dividend yield of 1.99%, as recorded on June 7.
Abbott Laboratories (NYSE:ABT) is one of the most popular healthcare stocks among billionaires. Ray Dalio, Cliff Asness, and Ken Griffin were some of the most popular billionaire investors having stakes in the company.
Overall, Abbott Laboratories (NYSE:ABT) was a part of 70 hedge fund portfolios in Q1 2023, up from 60 in the previous quarter. The collective value of stakes owned by these hedge funds is over $2.37 billion.
Polen Capital mentioned Abbott Laboratories (NYSE:ABT) in its Q1 2023 investor letter. Here is what the firm has to say:
“As stated below in the portfolio activity section, Abbott Laboratories (NYSE:ABT) is expected to see roughly $6 billion in COVID test sales evaporate this year, creating a headwind for margins and underlying earnings per share. As long-term owners of the business, these test sales were never part of our original investment case. The core business, our primary focus, has a clear path of growing high single digits in 2023 with durable growth beyond, in our view. We believe the current price of 23x NTM P/E , while reasonable, is also misleading considering earnings this year will be artificially depressed because of the drop in COVID testing sales. On normalized earnings, the price is lower. We anticipate underlying EPS growth of at least low-teens over the next three to five years.
Lastly, we trimmed Abbott Laboratories, bringing it back to a more average position size and to also fund our increase in Thermo Fisher. Abbott is entering a year in which the company is expected to see approximately $6bn in COVID-19 test sales disappear, thus, creating a headwind for margins and EPS. That said, the core business has a clear path to growing high single digits in FY23. EPS grew at a 20% CAGR from 2019-2022, far beyond our expectations when we initiated our investment. Now, we expect a more normal growth rate of low teens EPS beyond this year. Further, management’s adeptness at allocating capital continues to impress us. We expect Abbott to drive top line growth without heavily investing in R&D and SG&A this year— management effectively “front-loaded” those investments in 2021 and 2022 when COVID test sales created a bolus of cash. We believe this should allow for leverage on the operating margin going forward. Combined, Abbott and Thermo Fisher now represent 7% of the Portfolio.”
13. McKesson Corporation (NYSE:MCK)
Number of Billionaire Investors: 15
Number of Hedge Fund Holders: 60
McKesson Corporation (NYSE:MCK) is a Texas-based company that distributes pharmaceuticals and provides other care management tools. It is one of the most popular healthcare stocks with 15 billionaires in our database having stakes in the company in Q1 2023, including Warren Buffett and Andreas Halvorsen.
In fiscal Q4 2023, McKesson Corporation (NYSE:MCK) generated roughly $69 billion in revenues, which showed a 4.3% growth from the same period last year. The company holds a 6-year streak of dividend growth. It pays a quarterly dividend of $0.54 per share with a 0.56% dividend yield as of June 7.
McKesson Corporation (NYSE:MCK) also reported a very strong cash position in FY23. The company's operating cash flow came in at $5.2 billion and its free cash flow amounted to $4.6 billion. During the year, it returned $292 million to shareholders in dividends.
Credit Suisse raised its price target on McKesson Corporation (NYSE:MCK) in May to $450 with an Outperform rating on the shares, appreciating the company's strong earnings.
The number of hedge funds tracked by Insider Monkey owning stakes in McKesson Corporation (NYSE:MCK) grew to 60 in Q1 2023, from 54 in the previous quarter. These stakes have a consolidated value of roughly $4 billion.
Here is what Broyhill Asset Management has to say about McKesson Corporation (NYSE:MCK) in its Q4 2022 investor letter:
“Shares of McKesson Corporation (NYSE:MCK) gained 50% for the twelve months ending December 2022, as opioid-related litigation concerns, which weighed on the stock for years, took a back seat to strong operating performance. When we first established the position in 2018, we explained that, “Although headlines remind us daily of growing threats to the business, the actual probability of this business dramatically changing in the next five years is much lower than the perceived probability. We are simply betting that the future might not be as bad as the price suggests.”
Consensus FY22 and FY23 EPS estimates at the time were around $17 – $18 per share. The company reported ~ $24 in earnings in FY22, and is on pace for $26 in FY23, even as consensus estimates for the broader market were repeatedly revised lower. We continued to trim our position throughout the year as shares rerated higher from ~ 8x earnings in FY18 to ~ 16x earnings at recent highs.”
12. Bio-Rad Laboratories Inc. (NYSE:BIO)
Number of Billionaire Investors: 16
Number of Hedge Fund Holders: 47
Bio-Rad Laboratories Inc. (NYSE:BIO) is an American research company that manufactures specialized products for clinical diagnostic markets. The company reported mixed results in the first quarter of 2023 with revenues of $676.8 million, down 3.3% from the same period last year. However, the company's operating cash flow of $98.1 million grew from $50.5 million recorded in the prior-year quarter.
Billionaires Steve Cohen and Ken Griffin were two of the most prominent stakeholders of Bio-Rad Laboratories Inc. (NYSE:BIO) in Q1 2023. Overall, 47 hedge funds tracked by Insider Monkey owned stakes in the company in Q1, up from 42 in the previous quarter. These stakes have a collective value of nearly $960 million.
11. DexCom, Inc. (NASDAQ:DXCM)
Number of Billionaire Investors: 16
Number of Hedge Fund Holders: 66
DexCom, Inc. (NASDAQ:DXCM) is a California-based company that manufactures glucose monitoring systems for diabetes management. Morgan Stanley appreciated the strong volumes and fundamentals of the company and assumed its coverage on the stock with an Equal Weight rating in May with a $131 price target.
In the first quarter of 2023, DexCom, Inc. (NASDAQ:DXCM) reported revenue of $741.5 million, which saw an 18% growth from the same period last year. At the end of March, the company had over $623 million available in cash and cash equivalents and its total assets amounted to over $5.5 billion.
As of the close of Q1 2023, 66 hedge funds in Insider Monkey's database reported having stakes in DexCom, Inc. (NASDAQ:DXCM), worth collectively over $2.34 billion. Billionaire Ken Griffin was the company's leading stakeholder in Q1.
Baron Funds shared its outlook on DexCom, Inc. (NASDAQ:DXCM) in its Q1 2023 investor letter. Here’s what the firm said:
“We started a position in DexCom, Inc. (NASDAQ:DXCM), a medical device company that sells continuous glucose monitoring (CGM) devices for people with diabetes. DexCom is in the early stages of the launch of its seventh-generation device called the G7, which offers many new features, including 60% smaller size, a disposable transmitter, and 30-minute sensor warmup, among other features. We think the G7 will drive revenue growth acceleration through continued penetration in the core insulin-intensive diabetes population globally. In addition, Medicare recently decided to provide coverage of CGM for people with Type 2 diabetes who are basal insulin users, meaning people with diabetes who use insulin daily but don’t need to use insulin intensively at every meal or multiple times daily. This expanded coverage adds millions of people to DexCom’s addressable market. Over the long term, we believe DexCom will have an opportunity to expand into the even larger category of non-insulin users with Type 2 diabetes given the benefits of CGM in helping all people manage their diabetes.”
10. Eli Lilly and Company (NYSE:LLY)
Number of Billionaire Investors: 16
Number of Hedge Fund Holders: 72
Eli Lilly and Company (NYSE:LLY) is next on our list of healthcare stocks billionaires are loading up on. The pharmaceutical company is a part of 16 billionaires in our database, including Rajiv Jain Ken Griffin, and Ray Dalio.
In the first quarter of 2023, the company posted revenue of roughly $7 billion and its net income came in at $1.34 billion. The company is a regular dividend payer for the past 138 years. It currently pays a quarterly dividend of $1.13 per share and has a dividend yield of 1.03%, as of June 7.
In May, BofA increased its forecast for Eli Lilly and Company (NYSE:LLY)'s diabetes and obesity drugs based on consumer demand and prescriber feedback. In view of this, the firm lifted its price target on the stock to $500 and kept a Buy rating on the shares.
At the end of March 2023, 72 hedge funds in Insider Monkey's database owned stakes in Eli Lilly and Company (NYSE:LLY), worth collectively over $3.7 billion.
Fred Alger Management mentioned Eli Lilly and Company (NYSE:LLY) in its Q1 2023 investor letter. Here is what the firm has to say:
“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company with core franchises in diabetes, obesity, neurology, and oncology. The company offered exposure to therapeutics in obesity and diabetes via the launch of Mounjaro, as well as in Alzheimer’s via Donanemab which was filed in November 2022 for accelerated Phase 3 approval in mid-2023. While the company reported decent fiscal fourth quarter results, shares detracted from performance after a modest miss in their obesity and diabetes drug. Mounjaro. Moreover, investors became skeptical of potential regulatory scrutiny around Donanemab and its efficacy relative to Biogen’s competing offering.”
9. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)
Number of Billionaire Investors: 16
Number of Hedge Fund Holders: 77
Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is a biopharmaceutical company that specializes in the research, development, and commercializing of medicines. The company reported revenue of over $832 million and its adjusted net income came in at $232 million. At the end of March, it had over $2.3 billion available in cash and cash equivalents.
The number of hedge funds tracked by Insider Monkey having stakes in Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) grew to 77 in Q1 2023, from 75 in the previous quarter. Their collective stake value is over $6.6 billion. Billionaire Thomas Steyer's Farallon Capital was one of the company's leading stakeholders in Q1.
Aristotle Atlantic Partners, LLC made the following comment about Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) in its Q1 2023 investor letter. Here is what the firm has to say:
“We sold Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) after Amgen announced their intention to acquire Horizon for $116.50 per share. The deal is expected to close in mid-year 2023.”
8. Merck & Co., Inc. (NYSE:MRK)
Number of Billionaire Investors: 17
Number of Hedge Fund Holders: 75
Merck & Co., Inc. (NYSE:MRK) is next on our list of healthcare stocks popular among dividends. It is a dividend company, consistently lifting its payouts for the past 12 years. The company currently pays a quarterly dividend of $0.73 per share and has a dividend yield of 2.69%, as of June 7.
In the first quarter of 2023, Merck & Co., Inc. (NYSE:MRK) reported revenue of $14.5 billion, which beat Street estimates by $660 million. The company's net income for the quarter came in at over $2.8 billion.
As of the close of Q1 2023, 75 hedge funds in Insider Monkey's database owned stakes in Merck & Co., Inc. (NYSE:MRK), compared with 77 in the previous quarter. These stakes have a collective value of over $3.7 billion. Billionaire Cliff Asness and Ken Griffin were some of the company's leading stakeholders in Q1.
7. CVS Health Corporation (NYSE:CVS)
Number of Billionaire Investors: 17
Number of Hedge Fund Holders: 75
CVS Health Corporation (NYSE:CVS) is an American healthcare and pharmacy company that operates a wide range of healthcare businesses. The company reported revenue of $85.3 billion in the first quarter of 2023, which showed an 11% growth from the same period last year. Its operating cash flow for the quarter came in at $7.4 billion. CVS Health Corporation (NYSE:CVS) offers a quarterly dividend of $0.605 per share and has a dividend yield of 3.40%, as recorded on June 7.
Piper Sandler initiated its coverage on CVS Health Corporation (NYSE:CVS) with an Overweight rating in May with an $85 price target. The firm called the company a 'market leader' across its healthcare financing.
At the end of Q1 2023, billionaires Cliff Asness, Ray Dalio, and Ken Griffin were some of the company's leading stakeholders. In addition to these, 75 hedge funds tracked by Insider Monkey held investments in the company in Q1, with a collective value of over $3.7 billion.
6. Boston Scientific Corporation (NYSE:BSX)
Number of Billionaire Investors: 17
Number of Hedge Fund Holders: 65
Boston Scientific Corporation (NYSE:BSX) is one of the most popular healthcare stocks among billionaires. The company was a part of 65 hedge fund portfolios in Q1 2023, up from 57 in the previous quarter, as per Insider Monkey's database. The collective value of these stakes is over $3.8 billion. Billionaires Ken Griffin and Thomas Steyer were some of the company's leading stakeholders.
Other healthcare stocks billionaires are piling into include Abbott Laboratories (NYSE:ABT), Johnson & Johnson (NYSE:JNJ), and CVS Health Corporation (NYSE:CVS).
In May, Morgan Stanley assumed its coverage on Boston Scientific Corporation (NYSE:BSX) with an Overweight rating and a $58 price target. The firm mentioned that the company's fundamentals and volumes are strong.
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Disclosure. None. 15 Healthcare Stocks Billionaires Are Loading Up On is originally published on Insider Monkey.
