Krishen Sud’s Sivik Global Healthcare has filed its latest 13F with the SEC, disclosing the holdings in its equity portfolio as of March 31. Formerly known as Argus Management, Sivik was one of the top performing funds in our database during the third quarter of 2014, not entirely surprising given its focus on healthcare and the recent strength of that sector. The fund’s equity portfolio has experienced a good deal of turnover at the top since its previous filing, with only one of its previous top five holdings remaining in the top five, providing us with some fresh insight into the stocks the fund is bullish on during this quarter.
kurhan / shutterstock.com
Professional investors like Sud spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However, we also know that the returns of hedge funds have not been that great for several years now, underperforming the market. We studied the historical stock picks of these investors and our research revealed that the small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performance as a whole has been poor. A portfolio of the 15 most popular small-cap stocks among funds outperformed the S&P 500 Total Return Index by 95 basis points per month between 1999 and 2012 in backtesting. The exceptional results of this strategy got even better in forward testing after the strategy went live at the end of August 2012. A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned more than 137% and beaten the market by more than 82 percentage points since then, and by 4.6 percentage points in the first quarter of this year (see the latest details).
Sivik’s top pick is now Humana Inc (NYSE:HUM), which we ranked as the number one potential takeover target in 2015. While it has yet to be taken over, Humana Inc (NYSE:HUM) has offered investors big returns regardless, up by 27% year-to-date. Sivik added 20,300 shares to its holding of Humana, lifting it to an even 55,000 shares total, valued at $9.79 million. Humana Inc (NYSE:HUM) recently acquired Your Home Advantage, a Florida-based provider of home nursing, which Humana said in a press release will allow it to strengthen its own capabilities in this area. In late March Humana sold its wholly owned subsidiary Concentra for $1.06 billion. Among other things, Humana said the capital raised from that deal would be used to fund share repurchases. Billionaires Larry Robbins and Stephen Mandel held two of the largest positions in Humana at the end of 2014.
Sivik was just one of many funds with a position in Gilead Sciences, Inc. (NASDAQ:GILD) heading into 2015, as it was the most popular biotech stock among the funds in our database. Investing legend Julian Robertson was among them, with Gilead Sciences, Inc. (NASDAQ:GILD) occupying the second-largest position in his portfolio. Gilead is also Sivik’s second-largest position now after the fund increased its holding by 126% to 90,000 shares during the first quarter, the position now being valued at $8.83 million. Gilead Sciences, Inc. (NASDAQ:GILD) is often mentioned as a prime takeover target itself, for a bigger pharmaceutical company, though that becomes less and less likely as it continues to rapidly appreciate in value. Gilead has ballooned by more than 250% over the past 28 months, and is up another 10% year-to-date.
