10 Healthcare Focused Hedge Funds and 5 Top Stock Picks

In this article, we discuss 10 healthcare focused hedge funds and 5 top stock picks. You can read our detailed analysis of the performance of healthcare focused hedge funds and go directly to read 10 Healthcare Focused Hedge Funds and 10 Top Stock Picks.

5. Elevance Health, Inc. (NYSE:ELV)

Number of Hedge Fund Holders: 82

Elevance Health, Inc. (NYSE:ELV) is a health benefits company supporting consumers’ families and communities across care journeys. It serves clients through a portfolio of medical, digital, pharmacy behavioural clinical and care solutions.

Elevance Health, Inc. (NYSE:ELV) has more than doubled in value over the past three years, affirming its status as one of the top stock picks for healthcare-focused hedge funds. According to our database, Elevance Health, Inc. (NYSE:ELV) was owned by 82 hedge funds in the second quarter of 2023. In Q3, Yacktman Asset Management held 387,382 company shares worth $168.67 million and was the prominent stakeholder in Elevance Health, Inc. (NYSE:ELV).

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4. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 87

Eli Lilly and Company (NYSE: LLY) discover, develop and market pharmaceutical products. Its lead product includes Basaglar, Mounjaro and Jardiance, Humalog and Humalog Mix 75/25. It is best known for selling diabetes and cancer drugs, generating billions of dollars. Its lead diabetes drug recorded a 652% jump in sales in Q3 to $1.41 billion. 

While Eli Lilly and Company (NYSE: LLY) is up by about 63% for the year, it remains one of the top stocks for healthcare-focused hedge funds due to its diversified pipeline of drugs. 

According to Insider Monkey’s Q2 2023 database, it was observed that 87 hedge funds held positions in Eli Lilly and Company (NYSE:LLY), marking an increase from 72 in the prior quarter. The combined value of these holdings exceeds $5 billion. Impax Asset Management, led by Ian Simm, stood out as the significant shareholder of the company, possessing 28,708 shares valued at $15.42 million.

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3. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 88

Johnson & Johnson (NYSE:JNJ) makes and sells healthcare products. It is known for providing skin health/beauty products and oral care products. Its pharmaceutical segment offers products for rheumatoid arthritis, psoriatic arthritis, and psoriasis. 

With 88 hedge funds holding stakes, Johnson & Johnson (NYSE:JNJ) remains one of the top stock picks for gaining exposure in the healthcare sector. Among the 910 prominent hedge funds monitored by Insider Monkey, 88 of them possessed Johnson & Johnson (NYSE:JNJ) stock during the second quarter, up from 86 in the preceding quarter. Donald Yacktman’s Yacktman Asset Management emerged as the remarkable shareholder of the company, with 1.52 million shares valued at $237.21 million.

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2. Thermo Fisher Scientific Inc. (NYSE:TMO)

Number of Hedge Fund Holders: 103

Thermo Fisher Scientific Inc. (NYSE:TMO) has always been a top stock pick for healthcare hedge funds, eyeing exposure to life solutions, analytical instruments, speciality diagnostics, and laboratory products. The company offers reagents, instruments, and consumables for biological and medical research. It also provides solutions, including biosciences, genetic sciences, clinical next-generation sequencing, and bio-production to pharmaceutical, biotechnology, agricultural, clinical, and healthcare markets.

Following an analysis of the second-quarter 2023 shareholdings of 910 hedge funds, Insider Monkey identified that 103 of them had invested in Thermo Fisher Scientific Inc. (NYSE:TMO). In Q3 2023, the notable investor in the company is William Von Mueffling’s Cantillon Capital Management, which holds shares worth $457.46 million.

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1. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 111

UnitedHealth Group Incorporated (NYSE:UNH) is a diversified healthcare company and one of the top stock picks for healthcare-focused hedge funds. The company offers consumer-oriented health benefit plans and services in addition to care delivery, care management, wellness, and health financial services for consumers.

While the overall healthcare sector is down by about 6%, UnitedHealth Group Incorporated (NYSE:UNH) is up by about 3%, having emerged as a solid defensive play in the sector. The outperformance explains the vast holdings of up to 111 hedge funds. Our list of hedge funds that focus on healthcare has UnitedHealth Group Incorporated (NYSE:UNH) at the top.

Insider Monkey examined Q2 hedge fund portfolios for UnitedHealth Group Incorporated (NYSE:UNH) and identified that 111 hedge funds held positions in the company. Notably, in Q3 2023, Stephen J. Errico’s Locust Wood Capital Advisers was a significant investor in UnitedHealth Group Incorporated (NYSE: UNH), acquiring 217,338 shares valued at $109.58 million.

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