5 Biotech Stocks to Buy According to Billionaire Ken Fisher

2. Abbott Laboratories (NYSE:ABT)

Number of Hedge Fund Holders: 63 

Abbott Laboratories (NYSE:ABT) is an Illinois-based healthcare company. Fisher Asset Management owned 8.3 million shares in Abbott Laboratories (NYSE:ABT) at the end of September 2021 worth $989 million. 

In earnings results for the third quarter, posted on October 20, Abbott Laboratories (NYSE:ABT) reported earnings per share of $1.40, beating market predictions by $0.46. The revenue over the period was $10.9 billion, up 22% year-on-year. 

Among the hedge funds being tracked by Insider Monkey, Ohio-based investment firm Diamond Hill Capital is a leading shareholder in Abbott Laboratories (NYSE:ABT) with 6.2 million shares worth more than $732 million.

In its Q2 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Abbott Laboratories (NYSE:ABT) was one of them. Here is what the fund said:

“Abbott Laboratories was the lone detractor in the quarter as the company preannounced that revenue and earnings this year would be below their previous guidance. We still expect the company to grow earnings more than 20% this year and continue double-digit earnings growth in the years to come. However, weakness in COVID-19 testing revenue is primarily responsible for the guidance reduction. Abbott is a leader in multiple types of COVID-19 diagnostic tests, and the largely successful vaccine rollout globally is leading to less COVID testing than the company expected. Two years ago, these tests obviously accounted for $0 in revenue but recently accounted for nearly $10 billion in annualized revenues as of the fourth quarter of 2020. We have expected COVID testing revenues to decline sequentially every quarter and eventually level out at less than $1 billion per year. We are not surprised by the current reality, but the decline has been more rapid than what management had expected.

Abbott is a diversified medical products company with likely strong growth to come from its core businesses outside of COVID testing— our investment thesis was not dependent on pandemic related revenue. While the reduction in guidance is atypical for Abbott’s conversative management team, we do not believe it changes our long-term growth assumptions or the investment case in Abbott.”