Blue Jay Capital Betting On Big Returns From These Healthcare Stocks

#3. Mead Johnson Nutrition CO (NYSE:MJN)

– Shares Owned by Blue Jay Capital Management (as of June 30): 135,045

– Value of Holding (as of June 30): $12.25 Million

Having initiated its stake in Mead Johnson Nutrition CO (NYSE:MJN) during the first quarter of 2016, Blue Jay Capital proceeded to reduce it by 19% during the second quarter. Mead Johnson Nutrition CO (NYSE:MJN)’s stock has fallen considerably since late-July and is currently trading down by 3.24% in 2016. The company currently pays a quarterly dividend of $0.4125 per share, which amounts to an annual dividend yield of 2.15%. Despite the stock’s recent weakness, given the company’s weak financial numbers since the beginning of 2015 and the significant operational headwinds that it is facing from increased competition, some analysts believe that MJN’s shares are still trading at a premium valuation, which could result in the stock seeing further downside going forward. However, analysts at Credit Suisse don’t agree with that view. On September 12, they reiterated their ‘Buy’ rating on the stock and set a price target of $100 on it, which represents potential upside of 30.2%. The popularity of Mead Johnson Nutrition among the funds covered by Insider Monkey took a significant beating during the second quarter, as ownership of the stock declined by 30% to 28 and the aggregate value of their holdings in it shrank by $234.4 million to $765.22 million.

#2. Seattle Genetics, Inc. (NASDAQ:SGEN)

– Shares Owned by Blue Jay Capital Management (as of June 30): 328,430

– Value of Holding (as of June 30): $13.27 Million

Seattle Genetics, Inc. (NASDAQ:SGEN) was a new entry in Blue Jay Capital’s equity portfolio during the second quarter. The stock has appreciated by over 35% since the end of that period and is currently trading very close to its lifetime high. Though most analysts don’t think that the company will be reporting stellar financial number for its next two quarters, a lot of them are of the opinion that 2017 will be a breakout year for the company in terms of sales, which will push the stock higher. On September 16, analysts at Goldman Sachs upgraded the stock to ‘Neutral’ from ‘Sell’ and also hiked their price target on it to $47 from $30. However, that price target still represents potential downside of 14.2%. During the second quarter, ownership of Seattle Genetics, Inc. (NASDAQ:SGEN) among that funds that we cover increased by 66% to 20 and the aggregate value of their holdings in it jumped by 20.75% to $1.90 billion.

#1. Neurocrine Biosciences, Inc. (NASDAQ:NBIX)

– Shares Owned by Blue Jay Capital Management (as of June 30): 305,630

– Value of Holding (as of June 30): $13.89 Million

Despite Blue Jay Capital reducing its stake in the company by 15% during the second quarter, Neurocrine Biosciences, Inc. (NASDAQ:NBIX) jumped two spots to become its largest holding at the end of June. Neurocrine Biosciences’ stock took a big hit at the beginning of 2016, but has recouped most of those losses since then and is currently trading down by 3.29% for the year. At the end of last month, the company submitted a New Drug Application (NDA) with the FDA seeking approval for once-daily ‘valbenazine’, for the treatment of tardive dyskinesia, a neurological disorder characterized by involuntary repetitive movements of the face. Analysts who track Neurocrine’s stock feel that it is undervalued if one takes into account the potential of its two lead drugs elagolix and valbenazine. Neurocrine Biosciences, Inc. (NASDAQ:NBIX) was held by 39 funds in our system on June 30, with the aggregate value of their holdings in it standing at $650 million.

Disclosure: None