Louis Navellier’s Navellier & Associates enjoyed a solid first quarter, returning 6.4% according to our methodology, from its 254 long positions in equities with a market cap of $1.0 billion or greater. Navellier’s portfolio consisted of 326 long positions entering 2015, in a highly diversified and balanced portfolio. Its top 10 holdings accounted for just 36.44% of the value of its portfolio, and its investments were spread out across numerous sectors, with the healthcare and information technology sectors having the most capital allocated to them, at 23% apiece.
We can glean our first clues as to why Navellier outperformed the market (the S&P 500 returned 0.9% in the first quarter) based on that sector allocation. Nearly half of Navellier’s capital was tied up in two of the highest-performing sectors during the past quarter. According to Morningstar data the healthcare sector returned 4.48% during the quarter as a whole, while the IT sector returned 3.84%. They were the second- and third-best performing sectors, behind only real estate.
Navellier also outperformed the market despite its top pick Micron Technology, Inc. (NASDAQ:MU), which accounts for 4.23% of its portfolio, having a very poor quarter. Micron Technology, Inc. (NASDAQ:MU) was down 23% during the quarter, though after posting a solid earnings report on April 1 the maker of flash memory products is getting support from analysts.
Navellier’s top healthcare stock and second overall pick was the first of its stocks to deliver big returns. That stock is Actavis Plc (NYSE:ACT), which also happened to be the most popular healthcare stock among all funds we track, and it returned 16% during the past quarter. Overall, Actavis Plc (NYSE:ACT) has enjoyed a hugely successful run since its IPO in October 2013, gaining over 100% in 18 months. Navellier has held shares of Actavis Plc (NYSE:ACT) from the very beginning, and continues to profit off of the dynamic stock, whose acquisitions and growth continue to drive its stock price higher and higher. Navellier holds 321,400 shares as of the end of the 2014, a position which accounted for 4.13% of its portfolio.
AmerisourceBergen Corp. (NYSE:ABC) is another healthcare stock that enjoyed an extremely strong quarter. It was also the fourth top pick of Navellier’s, as it held 857,900 shares at the end of 2014, representing 3.86% of its portfolio. AmerisourceBergen Corp. (NYSE:ABC) was not one of the top ten healthcare stocks among the funds in our database, which meant many funds missed out on its 26% returns during the quarter. AmerisourceBergen Corp. (NYSE:ABC) is one of the largest distributors of drugs and healthcare supplies in North America, and its stock has enjoyed phenomenal growth over the past 27 months, ballooning by more than 150%. Panayotis Takis Sparaggis’s Alkeon Capital Management is the largest shareholder among the funds we track, holding 1.62 million shares at the end of 2014.
