Below we present the list of the top 5 healthcare stocks the experts at Sphera Global Healthcare Fund are buying. For our methodology and a more comprehensive list, go directly to Top 10 Healthcare Stocks the Experts at Sphera Global Healthcare Fund Are Buying.
5. SpringWorks Therapeutics, Inc. (NASDAQ:SWTX)
Closing out the first half of our list of Sphera Global’s big stock buys of Q3 is SpringWorks Therapeutics, Inc. (NASDAQ:SWTX), which the fund bought 52,800 shares of during the quarter, building its stake in the company to 247,917 shares in the process, a position valued at $15.73 million on September 30.
The amount of shares of SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) that are collectively owned by the group of hedge funds tracked by Insider Monkey has declined in each of the past five quarters, though by a modest amount each time. Those declines were frequently the result of prominent shareholder OrbiMed Advisors trimming its position.
SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) has announced several developments over the past two months, including a new partnership with pharmaceutical giant AbbVie Inc (NYSE:ABBV) that will see the latter foot the bill for a collaborative clinical trial that will utilize that company’s ABBV-383 in combination with SpringWorks’ gamma-secretase inhibitor for the treatment of relapsed or refractory multiple myeloma. SpringWorks also announced the dosing of the first patient in its Phase 1b/2 trial of nirogacestat.
To see which other healthcare stocks Sphera Global was buying instead of some of its other current or former holdings like Merck & Co., Inc. (NYSE:MRK), Johnson & Johnson (NYSE:JNJ), and Perrigo Co Plc (NASDAQ:PRGO), check out the conclusion of this article linked to below.
4. Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX)
Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) has been in Sphera Global’s portfolio since early 2020 and the fund bought another 203,416 shares of the company during Q3. Those additions gave the fund 750,603 shares overall and a 1.52% ownership stake in the company as of September 30. Sphera Global was one of many hedge funds to take a stake in SNDX during 2020, as hedge fund ownership of Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) more than tripled during the year, similar to the surge in the stock’s share price.
Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX)’s SNDX-5613 for the treatment of critical leukemia in adult and pediatric patients, was granted orphan drug designation in Europe towards the end of last year, following in the footsteps of its fast track designation by the FDA in June. Syndax is well positioned, with a cash runway that extends into early 2024 and having a commercialization collaboration in place with Incyte Corporation (NASDAQ:INCY).
3. Eli Lilly and Company (NYSE:LLY)
Topping the list is Eli Lilly and Company (NYSE:LLY), which ranks as Sphera Global’s top stock pick as of September 30. It’s also a company the fund was buying more shares of during the third quarter, 166,600 when all was said and done. That gives Sphera Global 348,495 LLY shares valued at $80.52 million on September 30. Hedge funds have never been more bullish on Eli Lilly and Company (NYSE:LLY) and have cashed in mightily on the stock as shares doubled between Q3 2019 and Q3 2021.
Eli Lilly and Company (NYSE:LLY) also has a growing legion of fans outside the hedge fund world, with the company ranking as one of Jim Cramer’s Top 10 Stock Picks for 2022. Cramer likes the earnings potential of Eli Lilly’s Alzheimer’s and diabetes drugs, which the company discussed during its December investor presentation. The company is also bullish on the uptake of its key growth products, predicting 2022 EPS of $8.50 to $8.65, well ahead of the consensus estimate of $7.30.
2. AstraZeneca plc (NYSE:AZN)
AstraZeneca plc (NYSE:AZN) ranks second on the list after Sphera Global loaded up on 143,994 shares of AZN during the third quarter. That gave it a holding of 1.29 million shares on September 30, valued at $77.58 million. Hedge funds have generally grown more bullish on AstraZeneca plc (NYSE:AZN) in recent years, though they’re quite underweighting the $177 billion pharmaceutical giant nonetheless, with just 42 funds long the stock among those tracked by Insider Monkey.
While AstraZeneca plc (NYSE:AZN) is another prominent Covid vaccine producer that Sphera Global likes, the fund is likely more interested in Astra’s strong oncology portfolio, revenue from which grew by 24% in 2020. AstraZeneca has several strong performing drugs in important cancer indications like lung, breast, and ovarian, and a pipeline loaded with more than 150 projects. While the market was skeptical about the $39 billion price tag the company paid to acquire Alexion Pharmaceuticals, the increased cash flow generation that will result should help grow the company’s dividend and further bolster its R&D spending.
1. AbbVie Inc. (NYSE:ABBV)
Sphera Global also made a large purchase of AbbVie Inc. (NYSE:ABBV) shares during Q3, nearly doubling the fund’s exposure to the stock as far as its 13F portfolio is concerned. Sphera Global bought 230,100 shares of ABBV during the quarter, giving it a total of 596,294 valued at $64.32 million at the end of September. Hedge fund ownership of AbbVie Inc. (NYSE:ABBV) has grown by 55% over the previous three years as of Q3 and hedge funds have been cashing in over the latter two years of that stretch as ABBV shares gained nearly 70%.
In its Q3 2021 investor letter, Miller Howard Investments pointed out that while it’s optimistic about a broader recovery, it has continued to balance out its cyclical holdings with stable dividend payers like AbbVie Inc. (NYSE:ABBV), which ranks as one of the 5 Most Popular Dividend Stocks Among Hedge Funds. The fund likes AbbVie’s strong balance sheet and cash flow and believes investors have been overly pessimistic about the company’s potential to release blockbuster drugs in the future.
Miller Howard Investments, an investment management firm, published its third-quarter 2021 investor letter and mentioned AbbVie Inc. (NYSE:ABBV). Here is what the fund said:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We hold three pharmaceutical companies, (which includes) AbbVie (ABBV). All three have strong cash flows and balance sheets, making their high dividends reasonably safe. The investment controversy surrounding these pharma companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations on these stocks reflects what we believe to be undue pessimism by investors on the prospects for new drugs.”
You can also take a peek at 10 Best Healthcare Dividend Stocks and Top 15 Dividend Stocks With Upside Potential.
