Anders Hallberg and Carl Bennet’s healthcare-focused fund, Healthinvest Partners AB, recently disclosed its equity holdings in a 13F filing with the Securities and Exchange Commission. After some shuffling during the first quarter, the new top picks of the fund are Magellan Health Inc (NASDAQ:MGLN), Pfizer Inc. (NYSE:PFE), Anthem Inc (NYSE:ANTM), Aetna Inc (NYSE:AET), and LifePoint Hospitals, Inc. (NASDAQ:LPNT).
Founded in 2006, Healthinvest AB invests in healthcare companies that are market leaders in the segments that they operate in. The fund’s investing strategy thus entails that it avoids investing in companies with pending clinical experiments, which are naturally a riskier option. Moreover, Healthinvest seeks to invest in smaller-sized companies, since it believes that it provides an informational advantage owing to less analysts covering them. Through the fund’s own financial analysis, which is more focused on free cash flow than earnings, the analysts seek out the the companies trading at discounted valuations, and invests in them with a long term perspective. The market value of the fund’s equity portfolio at the end of the second quarter stood at $144.37 million.
Before we move on to Healthinvest’s top picks, it is noteworthy that the fund’s focus on small caps is the same strategy that we have been advising to retail investors for quite a while now. Through our research, we discovered that a portfolio of the 15 most popular small cap picks of hedge funds can beat the S&P 500 Total Return Index by nearly a percentage point per month between 1999 and 2012. On the other hand the most popular large cap picks of hedge funds underperformed the same index by 7 basis points per month during the same period. In forward tests since August 2012 through March 2015 top small-cap stocks beat the market by a hefty 79.4 percentage points and returned more than 130% (read the details here).
With 260,606 shares valued at $18.46 million, Magellan Health Inc (NASDAQ:MGLN) represents Healthinvest’s largest holding. Hallberg and Bennet bumped the exposure of their fund by 58% during the last quarter. The $1.94 billion healthcare management company has appreciated by nearly 18.16% year to date. Magellan Health Inc (NASDAQ:MGLN) recently completed the acquisition of privately held pharmacy benefit manager (PBM), 4D Pharmacy Management Systems, Inc. The largest stockholder of Magellan Health Inc (NASDAQ:MGLN), among the funds that we track, is Samuel Isaly‘s Orbimed Advisors holding about 1.2 million shares as of the end of 2014.
Next in line is the $217.06 billion biopharmaceutical giant Pfizer Inc. (NYSE:PFE), in which Healthinvest owns 528,000 shares valued at $18.37 million. Recently, Pfizer’s antibody-drug conjugate, for leukemia has successfully met one of its two primary efficacy endpoints. The other primary endpoint is still being assessed. Moreover, Pfizer Inc. (NYSE:PFE) got the Breakthrough Therapy status from the FDA for Xalkori, which treats patients with a rare type of lung cancer. Among the billionaires that we track, 10 had an aggregate investment of $1.56 billion at the end of the fourth quarter of 2014, including Ken Fisher of Fisher Asset Management, which held about 31.20 million shares valued at $971.77 million.
Healthinvest acquired an additional 30,000 shares of Anthem Inc (NYSE:ANTM) during the first quarter to raise its total stake to 109,700 shares valued at $16.94 million. The stock of the $40.9 billion health benefits company has risen by about 22.38% year-to-date. Anthem Inc (NYSE:ANTM) is collaborating with Careevolution to produce the cFHR app for Apple Watch, which connects consumers to their healthcare providers, and will be one of the first apps available for the users of Apple’s new gadget. Larry Robbins‘ Glenview Capital held about 3.59 million shares of Anthem Inc (NYSE:ANTM) valued at $451.49 million at the end of 2014.
During the first quarter 46,000 shares of Aetna Inc (NYSE:AET) were added to Healthinvest’s equity portfolio, taking the stake to 158,900 shares valued at $16.93 million. Aetna is a $37.69 billion company operating in the life & health insurance industry, whose stock has gained nearly 22.6% since the beginning of the year. At the end of the fiscal year 2014, nearly 40% of Aetna Inc (NYSE:AET)’s health premiums came from its Government business, beating the industry growth rates in both the Medicare supplement and Medicare Advantage during the last fiscal year. Billionaire David Einhorn’s Greenlight Capital held about 1.35 million shares of Aetna Inc (NYSE:AET), according to its latest 13F filing.
The investor’s position in LifePoint Hospitals, Inc. (NASDAQ:LPNT) was increased by 21% and now comprises some 171,400 shares valued at $12.59 million. In the last decade, the provider of close to home healthcare services has grown to more than 60 hospital campuses in 21 states from 23 hospitals in 1999. In our hedge fund database, the largest shareholder of LifePoint Hospitals, Inc. (NASDAQ:LPNT) as of the end of 2014 is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital with about 640,600 shares valued at $46.07 million.
Disclosure: None
