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Vanguard Health Care Fund’s Top Five

February 10, 2014 | About:
Monica Wolfe

Monica Wolfe

129 followers
Over the duration of the fourth quarter the Vanguard Health Care Fund purchased added four new stocks to its holdings. The fund now holds on to 93 stocks valued at $32.35 billion. The following companies are Vanguard's top five portfolio holdings.

Merck & Co. (MRK)

Vanguard Health Care Fund’s largest position goes to Merck & Co where the fund holds on to 36,561,348 shares. This position represents 5.7% of the fund’s portfolio and 1.25% of the company’s shares outstanding.

Over the past quarter Vanguard upped their holdings 1.79% by purchasing 641,700 shares of the company’s stock. They purchased these shares somewhere near the average quarterly price of $47.90 per share. Since then the price per share is up about 14.3%.

Vanguard Health Care’s historical holding history:

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Merck & Co is a global health care company that delivers health solutions through its prescription medicines, vaccines, biologic therapies, animal health and consumer care products, which it markets directly and through its joint ventures.

Merck & Co’s historical revenue and net income:

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The analysis on Merck & Co reports that the company’s revenue has been in decline over the past year, it has issued $10.1 billion of debt over the past three years and its dividend yield is sitting near a 5-year low.

The Peter Lynch Chart suggests that Merck & Co is currently overvalued:

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Merck & Co has a market cap of $160.38 billion. Its shares are currently trading at around $54.89 with a P/E ratio of 36.80, a P/S ratio of 3.70 and a P/B ratio of 2.38. Merck currently holds a dividend yield of 3.20%. The company had an annual average earnings growth of 1.50% over the past ten years.

Forest Laboratories (FRX)

Vanguard’s second largest holding is in Forest Laboratories where the fund holds on to a total of 26,666,866 shares of the company’s stock. Vanguard’s position represents 4.9% of their total portfolio and 9.93% of the company’s shares outstanding.

Vanguard did not make any changes to their holdings over the past quarter.

The fund’s historical holding history:

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Forest Laboratories develops, manufactures and sells branded forms of ethical drug products most of which require a physician's prescription.

Forest Laboratories’ historical revenue and net income:

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The analysis on Forest Laboratories reports that the company has no debt, its revenue has been in decline over the past three years and its price is sitting at a 5-year high.

Also over the past year the company named a new President and CEO. Forest Laboratories named former CEO of Bausch + Lomb Brenton Saunders as the company’s new leader. Saunders took on his new role on Oct. 1, 2013.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Forest Laboratories has a market cap of $18.73 billion. Its shares are currently trading at around $69.14 with a P/S ratio of 5.70 and a P/B ratio of 3.10.

UnitedHealth Group (UNH)

Vanguard’s second largest position is in UnitedHealth Group where they hold on to 19,992,000 shares of the company’s stock. Their position represents 4.7% of fund’s total portfolio and 1.97% of the company’s shares outstanding.

During the past quarter Vanguard increased their position 5.21% by purchasing 990,900 shares. They bought these shares in the fourth quarter price range of $66.94 to $75.30, with an estimated average quarterly price of $71.84. Since then the price per share has dropped about -0.7%.

Vanguard’s historical holding history:

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UnitedHealth is a health and well-being company that helps people live healthier lives and help make health care work better. The company is helping individual's access quality care at an affordable cost; simplifying health care administration and delivery; strengthening the physician/patient relationship; and empowering physicians, health care professionals, consumers, and employers in the health system with actionable data to make better, more informed decisions.

UnitedHealth’s historical revenue and net income:

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The analysis on UnitedHealth reports that the company’s price is nearing a 10-year high, its dividend yield is at a 10-year high and it has shown predictable revenue and earnings growth.

UnitedHealth recently announced a $8.9 million investment in partnership with U.S. Bank which will bring affordable housing to Dayton, Ohio. The company invested $8.9 million of the $12.8 million total for affordable-housing community which will be called Germantown Village.

The Peter Lynch Chart suggests that the company is currently undervalued:

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UnitedHealth has a market cap of $70.21 billion. Its shares are currently trading at around $69.74 with a P/E ratio of 13.30, a P/S ratio of 0.60 and a P/B ratio of 2.20. The company had an annual average earnings growth of 14.20% over the past ten years.

GuruFocus rated UnitedHealth the business predictability rank of 4-star.

Bristol-Myers Squibb (BMY)

The guru fund’s fourth largest holding goes to Bristol-Myers Squibb where they hold on to 24,459,861 shares. This position makes up for 4% of the fund’s total portfolio and 1.49% of the company’s shares outstanding.

The fund did not alter their position in Bristol-Myers Squibb over the past quarter.

Vanguard Health Care Fund (Trades, Portfolio)’s historical holding history:

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Bristol-Myers Squibb is a biopharmaceutical company engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of biopharmaceutical products. The Company operates in one segment: Biopharmaceuticals.

Bristol-Myers Squibb’s historical revenue and net income:

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The analysis on Bristol-Myers Squibb reports that the company’s revenue has been in decline over the past year, its asset growth is currently faster than its revenue growth and its Piotroski F-Score is high, indicating a healthy situation for the company.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Bristol-Myers Squibb has a market cap of $85.82 billion. Its shares are currently trading at around $52.12 with a P/E ratio of 31.20, a P/S ratio of 5.30 and a P/B ratio of 5.80. The company had an annual average earnings growth of 1.50% over the past ten years.

McKesson Corp. (MCK)

Vanguard Health Care Fund (Trades, Portfolio)’s fifth largest holdings is in McKesson where they hold on to 7,449,500 shares. This position represents 3.7% of their total assets managed as well as 3.26% of the company’s shares outstanding.

Over the past quarter they reduced their holdings -11.73% by selling a total of 989,500 shares of the company’s stock. They sold these shares near the estimated average quarterly price of $153.59 per share. Since then the price per share has increased an additional 12.4%.

Vanguard’s holding history as of Q4:

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McKesson delivers medicines, pharmaceutical supplies, information and care management products and services designed to reduce costs and improve quality across the healthcare industry. It operates in two segments: The McKesson Distribution Solutions segment and The McKesson Technology Solutions segment.

McKesson’s historical revenue and net income:

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The analysis on McKesson reports that the company’s dividend yield is close to a 5-year low, its price is close to a 10-year high and its P/S and P/B ratios are also near 10-year highs. The analysis also notes that the company’s operating margin is expanding and its revenue and earnings have shown predictable growth.

The Peter Lynch Chart suggests that the company is currently overvalued:

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McKesson has a market cap of $39.76 billion. Its shares are currently trading at around $172.77 with a P/E ratio of 35.00, a P/S ratio of 0.30 and a P/B ratio of 4.90. McKesson had an annual average earnings growth of 23.60% over the past ten years.

GuruFocus rated McKesson the business predictability rank of 3.5-star.

Check out Vanguard Health Care Fund’s complete fourth quarter portfolio here. Also click here to try a free 7-day premium membership trial.


Rating: 3.7/5 (3 votes)

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