In this piece we will take a look at the 10 healthcare stocks to buy today according to Steven Cohen’s Point72 Asset Management. If you aren’t interested in the billionaire hedge fund owner’s background or the fund’s profile and want to jump straight to its top healthcare stock picks, then head over to 5 Healthcare Stocks to Buy Today According to Steven Cohen’s Point72 Asset Management.
Point72 Asset Management LP is an American hedge fund based out of Stamford, Connecticut. It is managed by New York Mets owner Mr. Steven Cohen, who is also the fund’s founder and owner and one of the richest people in the world.
Point72 was formerly known as SAC Capital, a hedge fund that was also based out of Connecticut. Mr. Cohen set up SAC Capital in 1992, and oversaw the fund’s affairs until 2014, when SAC Capital was shut down and its assets were transferred to Point72 Asset Management.
The hedge fund investor has a long career in the financial world. He is a graduate of the illustrious Wharton Business School of the University of Pennsylvania, from where he received his degree in Economics in 1978. Mr. Cohen’s entry into the financial world came during his time at Wharton, when he opened a brokerage account with a portion of his tuition fees.
Immediately after graduating, the now billionaire hedge fund executive, whose net worth is estimated at a whopping $17.4 billion by Forbes Magazine as of March 2022, took up a job at the boutique firm Gruntal & Co. His role at Gruntal was as a junior trader for options arbitrage. Mr. Cohen spent more than a decade at the firm, following which he started SAC Capital. He is also an active philanthropist, having donated and committed more than a billion dollars to a multitude of charitable causes.
Point72 Asset Management’s investment philosophy sees it employ both long and short equity trading strategies, alongside operating through a venture capital division that invests in startups all over the world. Some of the industries that the firm has invested heavily in include biotechnology, machine learning, artificial intelligence, and financial technology (fintech).
As the fourth quarter of last year came to an end, the investment firm had a 13F portfolio worth $25 billion, making it one of the largest hedge funds in the world. In this piece, we will focus on Point72 Asset Management’s stakes in the healthcare sector, which covers a diverse set of companies ranging from biotechnology firms to health plan providers. The fund’s largest holdings in this sector are in Jazz Pharmaceuticals plc (NASDAQ:JAZZ), Krystal Biotech, Inc. (NASDAQ:KRYS), and Biogen Inc. (NASDAQ:BIIB).
Steven Cohen of Point72 Asset Management
Our Methodology:
In order to find out which healthcare stocks are on Mr. Cohen and Point72 Asset Management’s radar, we sifted through the investment firm’s filings with the Securities and Exchange Commission. These filings list the companies that Point72 was invested in as the fourth quarter of last year came to an end. After the firms were identified, we then took a look at their largest shareholders, investor letters, analyst sentiment, quarterly earnings, and the number of hedge fund holdings out of the 924 funds in Insider Monkey’s database that filed 13Fs for the fourth quarter of 2021.
10. Bicycle Therapeutics plc (NASDAQ:BCYC)
Point72 Asset Management’s Holdings: $95.7 million
Percentage of Point72 Asset Management’s Portfolio: 0.38%
Number of Hedge Fund Holders: 21
Bicycle Therapeutics plc (NASDAQ:BCYC) is a biopharmaceutical firm that is headquartered in the United Kingdom. It is developing drugs to target tumors and diabetic macular disease. Additionally, it is also engaged in therapies that treat eye, respiratory, and heart diseases.
Point72 Asset Management held 1.5 million Bicycle Therapeutics plc (NASDAQ:BCYC) shares at the end of the fourth quarter of last year, a $95.7 million stake which represented 0.38% of its 13F investment portfolio. 21 hedge funds in our database owned the company’s shares as of December 31, which stands as an all-time high. Bicycle Therapeutics plc (NASDAQ:BCYC)’s largest investor among that group is Wayne Holman’s Ridgeback Capital Management, which owns 2.16 million shares worth $131 million.
Bicycle Therapeutics plc (NASDAQ:BCYC) earned $3.7 million in revenue and lost $0.63 in GAAP EPS for its fiscal fourth quarter, missing analyst estimates for revenue but beating them for EPS. JMP Securities stuck with its ‘Outperform’ rating for the company’s shares in March 2022, but lowered their price target to $70 from $85, stating that strong drug development could spell out a positive future for the firm.
Bicycle Therapeutics plc (NASDAQ:BCYC) joins Krystal Biotech, Inc. (NASDAQ:KRYS), Jazz Pharmaceuticals plc (NASDAQ:JAZZ), and Biogen Inc. (NASDAQ:BIIB) on the list of Mr. Cohen’s favorite healthcare stocks.
9. Cigna Corporation (NYSE:CI)
Point72 Asset Management’s Holdings: $96 million
Percentage of Point72 Asset Management’s Portfolio: 0.38%
Number of Hedge Fund Holders: 53
Cigna Corporation (NYSE:CI) is a healthcare plan provider headquartered in Bloomfield, Connecticut. The company’s products cover several kinds of services, such as benefits management, care delivery, and behavioral health, dental, and vision products, alongside individual health insurance plans.
During its fiscal Q4, Cigna Corporation (NYSE:CI) posted a strong set of results that impressed Wall Street, beating analysts’ revenue and non-GAAP EPS estimates. The company posted $45 billion in revenue and $4.77 in non-GAAP EPS for the quarter. Subsequently, Mizuho raised its price target on the company to $266 from $245 in March 2022, outlining that the managed care industry will enjoy strong growth this year due to a confluence of factors.
Mr. Cohen’s stake in Cigna Corporation (NYSE:CI) stood at $96 million by the end of 2021’s final quarter, as Point72 Asset Management owned 419,730 shares of the healthcare company. Of the 924 hedge funds in our database that filed 13Fs for Q4 2021, 53 owned the company’s shares on December 31.
Dodge & Cox Stock Fund mentioned the company in its third quarter 2021 investor letter. Here is what the fund said:
“Cigna (2.5% position) is one of the largest and most diversified health care services organizations in the United States. The stock has underperformed recently due to weak financial results, which included higher than expected medical costs. Nevertheless, the company continues to work towards its 10-13% annual earnings growth target, generates significant cash flow, and has plans to deploy capital to shareholders through debt repayments, share buybacks, and a newly announced dividend program. Cigna trades at an attractive valuation of nine times forward earnings.”
8. Seagen Inc. (NASDAQ:SGEN)
Point72 Asset Management’s Holdings: $98 million
Percentage of Point72 Asset Management’s Portfolio: 0.39%
Number of Hedge Fund Holders: 46
Seagen Inc. (NASDAQ:SGEN) is an American biotechnology firm that is developing and commercializing cancer treatments. The company’s treatments cover cancer types such as t-cell lymphomas, urothelial cancer, breast cancer, and cervical cancer.
By the end of the fourth quarter of 2021, Point72 Asset Management had a $98 million stake in Seagen Inc. (NASDAQ:SGEN), owning 634,581 shares. This stake represented 0.39% of the investment firm’s multi-billion dollar 13F portfolio. Insider Monkey’s Q4 2021 data revealed that 46 funds owned the company’s shares on December 31, up from 40 a quarter earlier.
Seagen Inc. (NASDAQ:SGEN) earned $429 million in revenue for its fiscal fourth quarter, beating analyst revenue estimates, but lost $0.95 in GAAP EPS, missing estimates on the earnings front. Earlier this month, the company announced an exclusive partnership with another healthcare firm, Sanofi, to develop and commercialize antibody drugs for three different cancer types.
Carillon Tower Advisers mentioned the company in its fourth quarter 2020 investor letter. Here is what the fund said:
“Seagen Inc. (NASDAQ:SGEN) is a biotechnology company engaged in the development and commercialization of monoclonal antibody-based therapies for the treatment of cancer. The stock slumped a bit in the quarter after the firm announced it was lowering guidance for its drug Adcetris, which is an antibody medication used to treat lymphoma. We remain optimistic on the stock, primarily due to the company’s appealing pipeline of new products as well as the continued growth of Padcev (for metastatic urothelial cancer) and Tucatinib (for breast cancer).”
7. Natera, Inc. (NASDAQ:NTRA)
Point72 Asset Management’s Holdings: $99 million
Percentage of Point72 Asset Management’s Portfolio: 0.39%
Number of Hedge Fund Holders: 40
Natera, Inc. (NASDAQ:NTRA) is a molecular testing provider headquartered in the United States. The company offers tests that allow for the screening of fetal abnormalities, zygosities, gene disorders, inherited gene conditions, miscarriage causes, and paternity determination.
For its fiscal fourth quarter, Natera, Inc. (NASDAQ:NTRA) earned $173 million in revenue and lost $1.48 in GAAP EPS, a mixed bag of results that saw it beat analyst revenue estimates but miss the mark for EPS. Piper Sandler named the stock its ‘best idea’ in March 2022, though it reduced its price target on the company’s stock to $70 from $80, adding that the healthcare company is too valuable to be trading at its current low levels.
Point72 Asset Management’s stake in Natera, Inc. (NASDAQ:NTRA) during 2021’s concluding quarter was worth $99 million as the fund owned 1 million shares. Insider Monkey’s data shows that 40 elite hedge funds owned a stake in the company on December 31. Natera, Inc. (NASDAQ:NTRA)’s largest investor among that group of 40 funds is Paul Marshall and Ian Wace’s Marshall Wace LLP, which owns 1.8 million shares worth $169 million.
Alger mentioned the company in its fourth quarter 2021 investor letter, as it outlined that:
“Natera discovers, develops and commercializes genetic testing services. It provides a suite of blood-based testing products in three primary verticals: reproductive health, oncology and transplant. The company is exposed to factors that have recently been out of favor in this market (eg: high growth, high multiple, long duration, cash burn). Natera posted solid third quarter results with revenues beating consensus expectations by $6 million. The company also raised revenue guidance by $10 million. Natera has beaten Wall Street expectations and raised guidance every quarter since the third quarter of 2020 when guidance was reinstated after COVID-19 started. Gross margins came in below publicly available Wall Street estimates but were still up year-over-year and quarter over quarter with the trajectory for continued expansion in-tact. While the beat was slightly smaller than the past two quarters, this was still a strong report and we believe it shows evidence of continued business momentum.”
6. AstraZeneca PLC (NASDAQ:AZN)
Point72 Asset Management’s Holdings: $103 million
Percentage of Point72 Asset Management’s Portfolio: 0.41%
Number of Hedge Fund Holders: 44
AstraZeneca PLC (NASDAQ:AZN) is a British biopharmaceutical company that is responsible for developing, manufacturing, and selling prescription drugs. The company’s products cover a host of diseases such as those involving the kidneys and lungs, as well as influenza, metabolism, and psychiatric-related diseases.
Mr. Cohen’s hedge fund held 1.7 million AstraZeneca PLC (NASDAQ:AZN) shares at the end of Q4 2021, a $103 million stake that represented 0.41% of its 13F investment portfolio. During the same period, 44 hedge funds in our database were long AstraZeneca. Ken Fisher’s Fisher Asset Management is one of AstraZeneca PLC (NASDAQ:AZN)’s largest investors, owning 20.11 million shares worth $1.17 billion.
AstraZeneca PLC (NASDAQ:AZN)’s fiscal Q4 revenue stood at $12 billion, while its non-GAAP EPS came in at $1.67, which represented a strong set of results that ended up beating Wall Street estimates on both counts. Stifel set a GBp 12,300 price target for the company in February 2022, as it outlined that the company’s expected compound annual growth rate (CAGR) for EPS of 14.2% was the highest in the financial firm’s sector coverage.
Along with Jazz Pharmaceuticals plc (NASDAQ:JAZZ), Krystal Biotech, Inc. (NASDAQ:KRYS), and Biogen Inc. (NASDAQ:BIIB), AstraZeneca PLC (NASDAQ:AZN) is one of Point72 Asset Management’s top healthcare stock picks.
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Disclosure: None. 5 Healthcare Stocks to Buy Today According to Steven Cohen’s Point72 Asset Management is originally published on Insider Monkey.
