With the high volatility prevalent in the biotechnology sector, investors have a hard time picking the right stocks to invest in. Moreover, due to the complexity of products and regulations, it can be hard to predict their success both in terms of clearing the clinical trials and also in terms of being successful in the market. A wiser and easier option would be to follow the professional investors who have over the years made billions owing to their shrewd investing skills in this sector.
At Insider Monkey we track a total of 737 hedge funds and monitor their moves as they change their portfolio positions every quarter. Through the 13F filings that these funds submit to the Securities and Exchange Commision, we categorize the holding of each fund into different sectors to gain an insight into some of the favorite picks of these professional money managers. Following these picks has the added advantage of removing some of the volatility that would result from a retail investor’s ignorance, as these companies have already been meticulously researched by the hedge fund managers and hence in all probability, provide the best chance of beating the average market returns. Investors also don’t have to pay the high management fees that these funds usually charge their investors.
Gilead Sciences, Inc. (NASDAQ:GILD) occupies the first spot in this regard. A total of 12 billionaires had stakes in the biotechnology company, as of the latest filing, with the value of their positions at about $914 million. 97 total hedge funds had positions in this biotech company, with their investments totaling about $5.34 billion. Among the billionaires that have significant stakes in the company, Julian Robertson of Tiger Management is the most prominent in terms of value to his own portfolio. He increased his stake by 21% during the fourth quarter, giving him 533,911 shares of Gilead Sciences, Inc. (NASDAQ:GILD) valued at $50 million, 9.87% of his portfolio value.
Shire PLC (ADR) (NASDAQ:SHPG) has the backing of 9 billionaires that are tracked at Insider Monkey. John Paulson of Paulson & Co and Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell are the main Shire investors among them. After decreasing their stake by 8% in the company, Paulson & Co now owns 8.33 million shares valued at $1.77 billion. Arrowstreet owns 1.28 million shares, valued at $272.98 million. Shares of Shire PLC (ADR) (NASDAQ:SHPG) are up 13.2% year-to-date. The fourth quarter EPS of $2.63 missed estimates by $0.04, but strong revenues of $1.58 billion beat the estimates by $30 million.
Amgen, Inc. (NASDAQ:AMGN) has sparked the interest of 8 billionaires as they renewed their trust in the company’s products designed for cancer care, inflammation, nephrology and bone disease. Of these, Dan Loeb of Third Point takes precedence, as he increased his fund’s stake in the company by a staggering 706%. Third Point is currently in possession of 10.68 million shares of Amgen, Inc. (NASDAQ:AMGN) with a market value of $1.7 billion.
Amgen’s popularity level in terms of hedge funds invested in the company as a percentage of those we track at Insider Monkey stood at 8.10%. Although this was a dip from the 9.10% popularity figure from last quarter, the total amount that hedge funds had invested in Amgen, Inc. (NASDAQ:AMGN) increased from $3.15 billion in the third quarter to $4.21 billion in the fourth.
Biogen Idec Inc (NASDAQ:BIIB) is another favourite of Stanley Druckenmiller, as well as 6 other billionaires, as he increased his stake in the company focused on treating neurodegenerative diseases, hemophilia and autoimmune disorders, by a whopping 247%. The fund’s current stake amounts to 359,400 shares, having a market value of $122 million. Biogen Idec Inc (NASDAQ:BIIB) forms 11.96% of Duquesne Capital’s portfolio value.
The stock of this biotechnology firm is up nearly 20% year to date on the back of a strong fourth quarter earnings release. Earnings per share stood at $4.09 and were up 74% year-over-year. Revenues of $2.64 billion were also up nearly 34% year-over-year. With a $95.85 billion market cap, Biogen Idec Inc (NASDAQ:BIIB) is currently trading at a forward earnings multiple of 20.52.
Celgene Corporation (NASDAQ:CELG) is another favorite pick of billionaires in the biotechnology sector. 5 billionaires were invested in the company dedicated in treating cancer and immune-inflammatory related diseases. Their total investment in the company was valued at $201.8 million. Of these Stanley Druckenmiller of Duquesne Capital is the most prominent. Although he reduced his exposure in Celgene Corporation (NASDAQ:CELG) by 23% during the fourth quarter, the position still comprises of 4.76% of his fund’s portfolio value. The position constitutes of 434,100 shares and has a market value of $48.56 milliion. The stock price of Celgene Corporation (NASDAQ:CELG) is up 10.8% year to date. Moreover, the $97.81 billion market cap biotech firm has a forward earnings multiple of 19.57.
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