In this article, we will take a look at 10 pharmaceutical stocks to buy today according to Tiger Cub Billionaire Lee Ainslie. You can skip our detailed analysis of Lee Ainslie’s history, investment strategy, and hedge fund performance, and go directly to see the 5 Pharmaceutical Stocks to Buy Today According to Tiger Cub Billionaire Lee Ainslie.
Lee Ainslie is an American value investor and the head of the hedge fund, Maverick Capital. Ainslie is a Tiger Cub, who has worked at Tiger Management Corp under the guidance of one of the most famous investors, Julian Robertson. He founded Maverick Capital, a long/short equity hedge fund in 1993, which now has $12.6 billion in total Assets Under Management (AUM).
Maverick Capital was launched with $38 million, funded by Texas-based entrepreneur, Sam Wyly. The hedge fund generates returns through a typical ‘Tiger Cub’ strategy of long/short stock picking. Lee Ainslie follows a bottom-up approach to stock picking rather than investing in bonds and other commodities. Today, it is one of the most successful and consistent hedge funds which has averaged over 13% a year in returns from 1995-2009. In July 2021, Maverick Capital gained 2%, while its year-to-date returns came in at 39.6%, versus the S&P 500 return of 21.2%.
Maverick Capital mainly invests in technology, healthcare, financial, consumer goods, and industrial goods sector. As of Q2, some of the most notable picks of Lee Ainslie include Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), Amazon. com, Inc. (NASDAQ: AMZN), Alphabet Inc. (NASDAQ: GOOG), and Netflix, Inc. (NASDAQ: NFLX). However, in this article, we lay our focus on healthcare picks of the billionaire.
Over the past four years, the hedge fund has raised its positions in the biotech/pharmaceutical sector. In Q2 2021, the healthcare sector, which also includes pharmaceutical stocks, represents 18.9% of the fund’s 13F portfolio. Some of the notable pharmaceutical holdings of Maverick Capital include Atara Biotherapeutics, Inc. (NASDAQ: ATRA), Wave Life Sciences Ltd. (NASDAQ: WVE), Curis, Inc. (NASDAQ: CRIS), and Johnson & Johnson (NYSE: JNJ).
In the second quarter of 2021, Maverick Capital bought over 965,300 shares in Atara Biotherapeutics, Inc. (NASDAQ: ATRA), growing its position by 14.3%. The company represents 1.12% of the fund’s 13F portfolio. Similarly, the fund also increased its activity in Wave Life Sciences Ltd. (NASDAQ: WVE) and Curis, Inc. (NASDAQ: CRIS). Apart from increasing its positions in pharmaceutical stocks, Maverick Capital also initiated new stakes in one of the largest pharmaceutical and consumer goods companies, Johnson & Johnson (NYSE: JNJ). The fund owns shares worth $7.7 million in the company. Along with this, the hedge fund also started building its position in Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT), with 173,887 shares.
Pharmaceutical stocks have always garnered the attention of famous hedge funds. According to a report by S&P Global, between 2014 and 2015, hedge fund activity in the pharmaceutical industry grew from $67.2 billion to $105 billion. Moreover, the onset of Covid-19 resulted in the growth of global drug spending by $88 billion in 2020, which peeled open new avenues for hedge funds in the pharma industry.
Our Methodology:
We picked the top pharmaceutical stocks from the Q2 portfolio of Lee Ainslie’s Maverick Capital.
Lee Ainslie
Why pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
10 Pharmaceutical Stocks to Buy Today According to Tiger Cub Billionaire Lee Ainslie
10. Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT)
Maverick Capital’s Stake Value: $7,701,000
Percent of Maverick Capital’s 13F Portfolio: 0.07%
Number of Hedge Fund Holders: 19
Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT) is a clinical-stage pharmaceutical company that develops gene therapies that could cure rare childhood diseases. The company was founded in 1999 and is based in the U.S.
Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT) is one of the newest acquisitions of Maverick Capital in the second quarter as the fund bought 173,887 shares in the company worth $7.7 million. The company accounts for 0.07% of Maverick Capital’s 13F portfolio. In Q2 2021, Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT) posted a GAAP EPS of -$0.55, beating the consensus by -$0.11. Recently, Chardan Capital lifted its price target on Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT) to $56, with a ‘Buy’ rating on the shares. The stock gained 19.06% in the past year.
As of Q2 2021, 19 hedge funds tracked by Insider Monkey have positions in Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT), worth over $539.1 million.
9. Johnson & Johnson (NYSE: JNJ)
Maverick Capital’s Stake Value: $7,708,000
Percent of Maverick Capital’s 13F Portfolio: 0.07%
Number of Hedge Fund Holders: 88
Johnson & Johnson (NYSE: JNJ) is an American multinational company that develops medical devices, pharmaceuticals, and consumer packaged goods. The company mainly develops medicines for rare diseases, such as immune-mediated inflammatory diseases, multiple myeloma, and plaque psoriasis.
In Q2, Maverick Capital started building its positions in Johnson & Johnson (NYSE: JNJ) with 46,787 shares, worth $7.7 million. The company represents 0.07% of the hedge fund’s 13F portfolio. In Q2 2021, Johnson & Johnson (NYSE: JNJ) posted its pharmaceutical revenue of $12.5 billion, up from $10.7 billion during the same period last year. The company also generated $164 million in Covid-19 vaccine revenue in the second quarter. In August, Morgan Stanley lifted its price target on Johnson & Johnson (NYSE: JNJ) to $187, with an ‘Overweight’ rating on the shares. Since the beginning of the year, the stock has delivered a 12.08% return to shareholders, while its 12-month returns are up by 15.2%.
Of the 873 hedge funds tracked by Insider Monkey, 88 funds have positions in Johnson & Johnson (NYSE: JNJ) in Q2 2021, up from 81 in the previous quarter. These stakes are valued at over $7 billion.
Like Atara Biotherapeutics, Inc. (NASDAQ: ATRA), Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), Amazon. com, Inc. (NASDAQ: AMZN), Alphabet Inc. (NASDAQ: GOOG), and Netflix, Inc. (NASDAQ: NFLX), Johnson & Johnson (NYSE: JNJ) is one of the notable stock picks of Lee Ainslie as of Q2.
8. SQZ Biotechnologies Company (NYSE: SQZ)
Maverick Capital’s Stake Value: $14,206,000
Percent of Maverick Capital’s 13F Portfolio: 0.13%
Number of Hedge Fund Holders: 4
SQZ Biotechnologies Company (NYSE: SQZ) is a biotechnology company that develops transformative cell therapies for patients with cancer, infectious diseases, and other serious conditions. The company’s cell therapies are believed to be of therapeutic benefit for patients. SQZ Biotechnologies Company (NYSE: SQZ) ranks eighth on our list of the best pharmaceutical stocks to buy today according to Tiger Cub Billionaire Lee Ainslie.
In Q2, Maverick Capital increased its position in SQZ Biotechnologies Company (NYSE: SQZ) by 3% and owns 983,096 shares in the company. The shares are valued at $14.2 million. SQZ Biotechnologies Company (NYSE: SQZ) accounts for 0.13% of the hedge fund’s 13F portfolio. In Q2 2021, the company posted revenue of $4.54 million. In May, Brookline Capital Management initiated its coverage on SQZ Biotechnologies Company (NYSE: SQZ) with a ‘Buy’ rating and a $40 price target.
As of Q2 2021, 4 hedge funds tracked by Insider Monkey have positions in SQZ Biotechnologies Company (NYSE: SQZ), worth $39.9 million.
7. Curis, Inc. (NASDAQ: CRIS)
Maverick Capital’s Stake Value: $15,896,000
Percent of Maverick Capital’s 13F Portfolio: 0.14%
Number of Hedge Fund Holders: 24
Curis, Inc. (NASDAQ: CRIS) is a biotechnology company that develops treatments for regenerating and restoring human tissues and organs. In addition to that, the company also develops therapeutics for the treatment of cancer. The company ranks seventh on our list of the best pharmaceutical stocks to buy today according to Tiger Cub Billionaire Lee Ainslie.
Curis, Inc. (NASDAQ: CRIS) is one of the newest acquisitions of Maverick Capital in Q2. The hedge fund bought over 1.9 million shares in the company, worth $15.8 million. The company now represents 0.14% of Maverick Capital’s 13F portfolio. In August, B. Riley rated the stock as a ‘Buy’, with a $22 price target. In Q2 2021, Curis, Inc. (NASDAQ: CRIS) posted revenue of $2.3 million, while research and development expenses stood at $8.8 million. In the past year, Curis, Inc. (NASDAQ: CRIS) has delivered a 595% return to shareholders.
As of Q2 2021, 24 hedge funds have positions in Curis, Inc. (NASDAQ: CRIS), worth $314.2 million. Like Johnson & Johnson (NYSE: JNJ), Atara Biotherapeutics, Inc. (NASDAQ: ATRA), TG Therapeutics, Inc. (NASDAQ: TGTX), Nektar Therapeutics (NASDAQ: NKTR), Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY), and Dicerna Pharmaceuticals, Inc. (NASDAQ: DRNA), Curis, Inc. (NASDAQ: CRIS) is one of the best pharmaceutical stocks to buy today according to Tiger Cub billionaire Lee Ainslie.
6. Wave Life Sciences Ltd. (NASDAQ: WVE)
Maverick Capital’s Stake Value: $20,567,000
Percent of Maverick Capital’s 13F Portfolio: 0.19%
Number of Hedge Fund Holders: 14
Wave Life Sciences Ltd. (NASDAQ: WVE) is an American pharmaceutical company that focuses on transformational therapies for patients suffering from genetically defined diseases. The company’s pipeline is focused on neurological disorders as well as other therapeutic areas. The company ranks sixth on our list of the best pharmaceutical stocks to buy today according to Tiger Cub Billionaire Lee Ainslie.
In Q2, Maverick Capital bought 4,900 shares in Wave Life Sciences Ltd. (NASDAQ: WVE), increasing its position in the company by 1%. The hedge fund now holds over 3.08 million shares in the company, worth $20.5 million. Wave Life Sciences Ltd. (NASDAQ: WVE) accounts for 0.19% of the fund’s 13F portfolio. In May, Mizuho raised its price target on Wave Life Sciences Ltd. (NASDAQ: WVE) to $8.00 with a ‘Buy’ rating on the shares.
As of Q2 2021, 14 hedge funds tracked by Insider Monkey have positions in Wave Life Sciences Ltd. (NASDAQ: WVE), worth $141.9 million. RA Capital Management is the company’s largest shareholder, with over 7.7 million shares.
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Disclosure. None. 10 Pharmaceutical Stocks to Buy Today According to Tiger Cub Billionaire Lee Ainslie is originally published on Insider Monkey.
