Welch Capital’s Must-Buy Healthcare Stocks

In Zimmer Biomet Holdings Inc (NYSE:ZBH), Welch Capital reported a $10.29 million stake containing 79,100 shares. The company is engaged in production and sale of spine, bone healing, dental implants, and related surgical products. The stock is slightly down year-to-date, mainly due to the 15% drop registered on Monday when the company released its financial results and cut its full-year revenue growth outlook to 1.65%-1.9% from 2.5%-3%. The company reported revenue of $1.83 billion for the third quarter, up by 4% on the year and earnings of $0.78 per share, up from $0.11 posted a year earlier. However, its full-year EPS guidance was reduced to $7.90-$7.95 from $7.90-$8.00. Even though the number of funds tracked by us holding shares of Zimmer Biomet declined to 37 from 45 during the second quarter, the total value of their holdings appreciated by 9.7% to $1.38 billion.

Amsurg Corp (NASDAQ:AMSG) represents a new position in Welch’s equity portfolio as the fund held 147,180 shares worth $9.87 million at the end of September. Amsurg is an owner and operator of ambulatory surgery centers (ASCs) in the United States. Its stock is trading near its 52-week low price and it has fallen by 16% year to date. Earlier this week, the company has reported third-quarter revenue of $822.20 million, up by 26.4% over the year and $51.91 million above estimates. Its EPS of $1.13 also slightly topped expectations by $0.01. Aproximately $248 million worth of Amsurg shares was held in aggregate by 30 hedge funds that we track on June 30.

Last, but not least, in Tenet Healthcare Corp (NYSE:THC), Welch boosted its position by over 90% to  380,590 shares worth $8.62 million in the third quarter. Overall, the healthcare service company saw the number of funds from our database bullish on its stock rise to 39 from 34 between April and June. The company operates under three segments: Hospital Operations and other, Ambulatory Care and Conifer. In the third quarter, its revenue went up by 3.4% on the year to $4.85 billion and was $80 million higher than expected. On the other hand, the company’s EPS of $0.16 missed the consensus estimate by $0.03. The company provided an EPS and revenue guidance of $0.17-$0.22 and $4.9-$5 billion for the fourth quarter.

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