Portfolio Cuts Couldn’t Stop HealthInvest From Buying Up These Stocks

HealthInvest Partners AB is a Stockholm-based fund management company co-founded by Carl Bennet and Anders Hallberg in 2006, which specializes in the healthcare sector. The Swedish asset manager engages in active management on the basis of a value-based investment philosophy. Specifically, the firm’s investment approach focuses on finding companies with low valuations and potential catalysts to drive shareholder value.

Although HealthInvest Partners AB does not seem to be very well-known in the United States or even in its native Sweden (as a resident of Sweden for quite some time, I have never seen any mention of this firm), the asset management firm has consistently delivered strong returns since its inception. The firm’s HealthInvest Value Fund generated a net-of-fees return of 7% in 2015, after gaining 33% in 2014 and 35% in 2013. More importantly, the HealthInvest Value Fund has not suffered a down year in the past seven years or so, delivering an average return of 22% per annum. Considering the rather exceptional performance of the Stockholm-based investment firm compared to the broader hedge fund industry, it definitely seems like a great idea to have a look at the fund’s recent moves.

Although HealthInvest Partners AB significantly trimmed its U.S. public equity portfolio during the third quarter, with its value falling to $138 million on September 30 from $218 million a quarter earlier, the Stockholm-based fund still boosted the size of several holdings, as well as initiated a few new positions. Hence, the following article will have a look at five bullish moves completed by the health-focused firm during the September quarter.

But before diving deeper into the fund’s bullish moves, enthusiastic investors interested in both health stocks and healthy living shouldn’t miss this article about the Top 10 Healthiest Bottled Water in the World.

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SPDR Barclays 1-3 Month T Bill (ETF) (NYSEARCA:BIL)

– Shares Owned by HealthInvest Partners AB (as of September 30): 20,000

– Value of HealthInvest Partners AB’s Holding (as of September 30): $915,000

HealthInvest Partners AB initiated a new position in the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF, an ETF that seeks to provide investment results that correspond to the price and yield performance of the Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index. The position was worth $915,000 at the end of September. The Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index includes all publicly-issued, zero-coupon U.S. Treasury Bills that have a remaining maturity of less than three months and more than one month, are rated investment grade, as well as have $250 million or more of outstanding face value. Ken Griffin’s Citadel Advisors held a $1.82 million-position in the SPDR Barclays 1-3 Month T Bill (ETF) (NYSEARCA:BIL) at the end of the June quarter.

On the next two pages of this article, we’ll reveal the fund’s bullish moves on four publicly-traded companies.

Progenics Pharmaceuticals Inc. (NASDAQ:PGNX)

– Shares Owned by HealthInvest Partners AB (as of September 30): 280,000

– Value of HealthInvest Partners AB’s Holding (as of September 30): $1.77 Million

The Stockholm-based fund run by Carl Bennet and Anders Hallberg acquired a 280,000-share stake in Progenics Pharmaceuticals Inc. (NASDAQ:PGNX) during the third quarter, which was valued at $1.77 million on September 30. The oncology company, which develops innovative medicines and other products for targeting and treating cancer, has seen the value of its shares fall by 16% this year. Progenics Pharmaceuticals recently licensed its first commercial drug, Relistor, a drug used to treat opioid-induced constipation, to Salix Pharmaceuticals, a wholly-owned subsidiary of embattled Canadian drug maker Valeant Pharmaceuticals Intl Inc. (NYSE:VRX). In July, the FDA approved the tablet form of the drug to treat constipation brought on by taking opioids for chronic, non-cancer pain, which resulted in a $50 million-development milestone payment from Valeant. Progenics is also entitled to receive as much as $200 million in milestone payments tied to sales of the drug. Ken Fisher’s Fisher Asset Management trimmed its position in Progenics Pharmaceuticals Inc. (NASDAQ:PGNX) by 22% during the three-month period ended September 30, to 107,663 shares.

Anthem Inc. (NYSE:ANTM)

– Shares Owned by HealthInvest Partners AB (as of September 30): 135,900

– Value of HealthInvest Partners AB’s Holding (as of September 30): $17.03 Million

HealthInvest Partners AB lifted its holding in Anthem Inc. (NYSE:ANTM) by 42,000 shares during the September quarter, to 135,900 shares. The position was worth $17.03 million at the end of the quarter and accounted for 12.7% of the value of the firm’s U.S. public equity portfolio. In late-July 2015, Anthem agreed to acquire CIGNA Corporation (NYSE:CI) in a cash-and-stock deal worth around $48 billion. Under the terms of the agreement, Cigna’s shareholders are set to receive $103.40 in cash and 0.5152 Anthem shares should the deal go through. In late-July of this year, the U.S. Department of Justice sued to block the health-insurance deal on antitrust grounds. Should the multi-billion-dollar merger deal fall apart, Anthem would need to pay Cigna a $1.85 billion-breakup fee according to their merger agreement. Anthem has seen its market capitalization fall by 12% since the start of the year. Beech Hill Partners, led by Paul Cantor, Joseph Weiss, and Will Wurm, reported owning 66,625 shares of Anthem Inc. (NYSE:ANTM) through the current round of 13F filings for the September quarter.

The final page of this article will discuss HealthInvest Partners AB’s two most valuable public equity holdings as of September 30.

AmerisourceBergen Corp. (NYSE:ABC)

– Shares Owned by HealthInvest Partners AB (as of September 30): 212,000

– Value of HealthInvest Partners AB’s Holding (as of September 30): $17.13 Million

The Swedish investment firm also upped its stake in AmerisourceBergen Corp. (NYSE:ABC) during the June-to-September quarter, by 52,000 shares to 212,000. The position was valued at $17.13 million on September 30, and accounted for 12.7% of the value of its public equity portfolio. The shares of AmerisourceBergen, one of the largest global pharmaceutical sourcing and distribution services companies, took a serious hit yesterday amid signs that a price war had broken out in the sector. The signs were reflected in the grim earnings report from McKesson Corporation (NYSE:MCK), one of the largest pharmaceutical distributors in the United States. AmerisourceBergen has seen its market value drop by a disturbing 33% since the start of the year. Earlier this month, analysts at Argus reaffirmed their ‘Buy’ rating and price target of $135 on AmerisourceBergen, arguing that the extension of contracts with two of its largest customers should boost revenue. Fisher Asset Management owns 84,606 shares of AmerisourceBergen Corp. (NYSE:ABC) as of September 30.

Cardinal Health Inc. (NYSE:CAH)

– Shares Owned by HealthInvest Partners AB (as of September 30): 230,800

– Value of HealthInvest Partners AB’s Holding (as of September 30): $17.93 Million

The Stockholm-based asset manager owned 230,800 shares of Cardinal Health Inc. (NYSE:CAH) at the end of September, 70,800 shares more than it did at the end of June. The reshuffled position was worth $17.93 million on September 30 and represented 13.3% of the value of firm’s public equity portfolio. As in the case of AmerisourceBergen, the shares of Cardinal Health also took a serious hit this Friday, as investors feared the emergence of a pricing war in the industry. The global integrated healthcare services and products company has seen the value of its shares plunge by 24% this year. The CEO of McKesson Corporation (NYSE:MCK), whose aforementioned earnings report impacted the share prices of the other two U.S. prescription drug wholesalers, said on a conference call with analysts that his company has seen “competitive activity that is broader than our original expectations, more aggressive,” as well as added that “when a competitor significantly undercuts our existing pricing, we are compelled to respond.” Ray Carroll’s Breton Hill Capital was the owner of 8,992 shares of Cardinal Health Inc. (NYSE:CAH) at the end of September.

Disclosure: None