In this article, we will take a look at the 5 personalized medicine stocks billionaires are purchasing. If you want to read our detailed analysis of the industry and its growth prospects, go to the 10 Personalized Medicine Stocks Billionaires Are Loading Up On.
5. Abbott Laboratories (NYSE:ABT)
Number of Billionaire Investors: 15
Dollar Value of Billionaire Holdings: $1,296,158,361
Number of Hedge Fund Holders: 70
Abbott Laboratories (NYSE:ABT) is an Illinois, United States-based healthcare company.
In Q1 2023, Abbott Laboratories (NYSE:ABT) posted revenue of $9.75 billion, surpassing the analysts’ estimates by $104.18 million. Furthermore, the company also managed to exceed the EPS estimates by 5 cents. Click here to read Abbott Laboratories’ (NYSE:ABT) earnings call transcript for the latest quarter.
Here’s what Polen Capital said about Abbott Laboratories (NYSE:ABT) in its Q1 2023 investor letter:
“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.”
4. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Billionaire Investors: 15
Dollar Value of Billionaire Holdings: $477,264,538
Number of Hedge Fund Holders: 69
Bristol-Myers Squibb Company (NYSE:BMY) is at the fourth position on our list of the best personalized medicine stocks billionaires are purchasing.
In August 2022, Bristol Myers Squibb (NYSE:BMY) acquired Turning Point Therapeutics, Inc. (NASDAQ:TPTX), a precision oncology company, for $76 per share. Bristol-Myers Squibb Company (NYSE:BMY) made the acquisition of Turning Point Therapeutics, Inc. (NASDAQ:TPTX) to enhance its position in the field of precision oncology.
3. Merck & Co., Inc. (NYSE:MRK)
Number of Billionaire Investors: 17
Dollar Value of Billionaire Holdings: $1,403,465,639
Number of Hedge Fund Holders: 75
Merck & Co., Inc. (NYSE:MRK) is a New Jersey, United States-based pharmaceutical company.
At the end of Q1 2023, 17 billionaires reported owning a stake in Merck & Co., Inc. (NYSE:MRK), justifying its inclusion in our list of the best personalized medicine stocks to buy now. The 17 investors held a cumulative stake of over $1.4 billion in Merck & Co., Inc. (NYSE:MRK).
Here’s what Aristotle Capital Management, LLC said about Merck & Co., Inc. (NYSE:MRK) in its Q4 2022 investor letter:
“Founded in 1891 and headquartered in New Jersey, Merck & Co., Inc. (NYSE:MRK) is one the world’s largest pharmaceutical firms. The company’s drugs are used to treat conditions in a variety of areas, including oncology (~38% of revenue), vaccines (~19%), diabetes (~11%), animal health (~11%) and other (~21%). Merck produced over $48 billion in sales in 2021, just under half of which were generated in the United States. Within oncology, the firm’s immuno-oncology platform is becoming a major contributor to overall sales, driven by the blockbuster1 drug Keytruda. The company’s vaccine business is also significant and includes Gardasil for the prevention of HPV (the disease that can lead to cervical cancer in women), as well as vaccines for hepatitis B, pediatric diseases and shingles. In recent years, Merck has been shifting its focus toward unmet medical needs in specialty-care areas. As part of this shift in focus, in June 2021, Merck received $9 billion from the spinoff of its women’s health, established brands, and biosimilars businesses into the now independent, publicly traded company Organon…” (Click here to read the full text)
2. Johnson & Johnson (NYSE:JNJ)
Number of Billionaire Investors: 17
Dollar Value of Billionaire Holdings: $2,834,974,813
Number of Hedge Fund Holders: 86
Johnson & Johnson (NYSE:JNJ) is working actively to invest in the research and development of personalized treatments. The company, in collaboration with Janssen Research & Development LLC, initiated the Immunology Innovations QuickFire Challenge to encourage advancements in precision medicine.
As of Q1 2023, 86 hedge funds held a stake in Johnson & Johnson (NYSE:JNJ). D E Shaw raised its stake in Johnson & Johnson (NYSE:JNJ) by 86% during the first quarter of the year.
1. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Billionaire Investors: 19
Dollar Value of Billionaire Holdings: $2,384,906,137
Number of Hedge Fund Holders: 98
Thermo Fisher Scientific Inc. (NYSE:TMO) has secured first place on our list of the best personalized medicine stocks to invest in.
In 2018, Thermo Fisher Scientific Inc. (NYSE:TMO) opened its U.S. Precision Medicine Science Center (PMSC) in Cambridge, Massachusetts. Thermo Fisher Scientific’s PMSC is at the forefront of advancing precision medicine by enabling advanced personalized healthcare treatments.
Here’s what Polen Capital said about Thermo Fisher Scientific Inc. (NYSE:TMO) in its Q1 2023 investor letter:
“During the quarter, we also raised our position in Thermo Fisher Scientific Inc. (NYSE:TMO). The company effectively sells pickaxes and shovels to the life sciences industry, is well balanced, is durable, and has a strong management team at the helm. We took an initial position recently and are now raising it to an average weight within the Portfolio. During the most recent quarter, the company grew revenue 11% in constant currency. Core organic growth, excluding COVID-19 testing revenue which fell 16%, grew a very strong 13%. This company plays an important role within the Portfolio as a “safety” within our growth spectrum approach and over the next five years we expect EBITDA and EPS to grow at roughly low double digits and low teens, respectively.”
Disclosure: None. You can also take a look at the 10 Best Indian Stocks For Next 10 Years and the 10 Companies That Announced Huge Share Buybacks.
