Halvorsen Acquires Stake in Envision Healthcare

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Apr 20, 2015
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Healthcare stocks are, far and away, guru Andreas Halvorsen (Trades, Portfolio)’s preference. The healthcare sector has a 32.5% weighting in his portfolio, and Halvorsen – the founding partner and chief executive officer of Viking Global Investors – holds several stakes that are linked, directly or indirectly, to healthcare.

But, until recently, none of his healthcare positions were in the top 10 in his portfolio, and he hadn’t added to his existing holdings in a healthcare-related stock since the fourth quarter of 2014.

On April 9, Halvorsen bought 11,535,925 shares of Greenwood Village, Colorado-based Envision Healthcare Holdings Inc (EVHC, Financial) – a “leading provider of physician-led, outsourced medical services,” according to its website – for an average price of $39.31 per share. That was enough to make Envision Healthcare the seventh-largest stake in Halvorsen’s portfolio, just behind Bank of New York Mellon Corp (BK, Financial) and just ahead of Citigroup (C, Financial).

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It is the only completely new stake in Halvorsen’s portfolio. At the close of trading Monday, a share of EVHC was selling for $39.34, 13 cents lower than its opening price.

No major announcements are planned in the near future, and Envision doesn’t seem to be working on a project with the potential to transform health care, but it does offer a variety of healthcare services that appear to have been successful enough that many investors are eagerly anticipating the release of Envision’s first-quarter 2015 operating results on April 30.

Envision has a market cap of $7.22 billion and an enterprise value of $8.98 billion. It has a P/E of 59.3, a Price/Book of 4.1 and a Price/Sales of 1.7.

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Vanguard Healthcare Fund and Joel Greenblatt (Trades, Portfolio) have shares of Envision in their portfolios. John Burbank (Trades, Portfolio) sold his stake in Envision in the fourth quarter of 2014.

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