Sivik Global Healthcare Betting Big on These Five Stocks in Q4

Sivik Global Healthcare, led by Krishen Sud, has issued its latest 13F filing with the U.S. Securities and Exchange Commission for the reporting period ended September 30, revealing an equity portfolio worth over $206 million. Greenwich, Connecticut-based Sivik Global is a healthcare-focused hedge fund that was founded by Krishen Sud in 2006. The fund had over 90% of its equity portfolio invested in the healthcare sector. In this article, we will be taking a closer look at Sivik Global’s top stocks for the third quarter.

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Most investors don’t understand hedge funds and indicators that are based on hedge funds’ activities. They ignore hedge funds because of their recent poor performance in the bull market. Our research indicates that hedge funds underperformed because they aren’t 100% long. Hedge fund fees are also very large compared to the returns generated and they reduce the net returns experienced by investors. We uncovered that hedge funds’ long positions actually outperformed the market. For instance the 15 most popular small-cap stocks among funds beat the S&P 500 Index by more than 53 percentage points since the end of August 2012. These stocks returned a cumulative of 102% vs. a 48.7% gain for the S&P 500 Index (see the details here). That’s why we believe investors should pay attention to what hedge funds are buying (rather than what their net returns are).

#5 McKesson Corporation (NYSE:MCK)

Shares held (as of September 30): 45,000

Total Value (as of September 30): $8,326,000

Percent of Portfolio (as of September 30): 4.04%

Sivik Global was bullish on McKesson Corporation (NYSE:MCK) during the third quarter, with the investor boosting its position by 70%. McKesson Corporation (NYSE:MCK) is a $42.28-billion market cap healthcare services and information technology company. It posted strong financial results for the second quarter ended September 30, with revenue increasing by 10% to $48.8 billion year-over-year. Earnings per share for the quarter was $3.31, up from $2.79 a year ago. Another largest shareholder of the company among those we track is Eli Cohen’s Crescent Park Management, which holds 220,195 shares.

#4 Aetna Inc (NYSE:AET)

Shares held (as of September 30): 80,000

Total Value (as of September 30): $8.75 million

Percent of Portfolio (as of September 30): 4.25%

Sivik Global upped its position in health care benefits company Aetna Inc (NYSE:AET) by around 14%. In July, Aetna Inc (NYSE:AET) signed an agreement to acquire Humana Inc (NYSE:HUM) for $37 billion. The merger was approved by shareholders of both companies last month. Under the terms of the deal, Humana stockholders will receive $125 in cash and 0.8375 share of Aetna common stock for each Humana share. The deal is expected to close in the second half of 2016. Shares of Aetna Inc (NYSE:AET)’s have gained over 20% year-to-date. Another investor that sees value in Aetna is Larry Robbins’ Glenview Capital, with ownership of around 5.57 million shares as of the end of June. Robbins also mentioned Aetna in his third-quarter investor letter.

#3 Humana Inc (NYSE:HUM)

Shares held (as of September 30): 50,000

Total Value (as of September 30): $8.95 million

Percent of Portfolio (as of September 30): 4.34%

In Humana Inc (NYSE:HUM), Sivik Global cut its position by over 26% during the quarter. The company’s pending merger with Aetna Inc (NYSE:AET) is expected to close in the second half of 2016. Humana Inc (NYSE:HUM) is a health and well-being company, whose revenues for the third quarter rose to $13.36 billion, versus $12.24 billion in a year ago. Earnings per share was $2.09, up from $1.85 in 2014. Humana Inc (NYSE:HUM)’s is up over 23% year-to-date. Another investor, from our database, that holds Humana is Andreas Halvorsen’s Viking Global, which owns 3.21 million shares of the company.

#2 Health Net Inc. (NYSE:HNT)

Shares held (as of September 30): 160,000

Total Value (as of September 30): $9.64 million

Percent of Portfolio (as of September 30): 4.67%

Sivik Global was bullish on Health Net Inc. (NYSE:HNT), in which the investor boosted its stake by over 75%. Having a market cap of over $5 billion, Health Net Inc. (NYSE:HNT) is a managed care organization, which is being acquired by Centene Corporation (NYSE: CNC). In July, the companies signed a merger agreement, under which Centene will acquire all of the issued and outstanding shares of Health Net. The transaction is expected to close in early 2016, subject to receipt of required regulatory approvals and satisfaction of other customary closing conditions. Shares of Health Net Inc. (NYSE:HNT) have increased by 22.64% year-to-date. Samuel Isaly’s Orbimed Advisors also likes Health Net, in which the investor holds also holds about 3.70 million shares.

#1 CIGNA Corporation (NYSE:CI)

Shares held (as of September 30): 75,000

Total Value (as of September 30): $10.13 million

Percent of Portfolio (as of September 30): 4.91%

CIGNA Corporation (NYSE:CI) is a health services company, with a market cap of $34.20 billion. The investor upped its position in the company by more than 24% during the quarter. CIGNA Corporation (NYSE:CI) was profitable in the third quarter, with its income increasing to $547 million, or $2.10 per share, compared to $534 million, or $2.01 per share, for the same quarter last year. Revenues for the quarter rose to $9.4 billion, versus $8.76 billion in 2014. CIGNA Corporation (NYSE:CI)’s stock has been performing well, increasing by over 29% year-to-date on the back of its upcoming acquisition by Anthem. CIGNA is also a favorite stock of Larry Robbins‘ Glenview Capital, which held around 2.82 million shares of the company at the end of the second quarter

Disclosure: none