10-year

10-Year Anniversary Promotion (20% off)

Join GuruFocus Premium Membership Now for Only $279/Year

Once a decade discount

Save up to $500 on Global Membership.

Don't Miss It !

Free 7-day Trial
All Articles and Columns »

Bruce Berkowitz Health Care Plays: Humana Inc., WellPoint Inc., WellCare Health Plans Inc., Pfizer Inc, Forest Laboratories Inc., Bristol-Myers Squibb Company

December 02, 2009 | About:
guruek

guruek

80 followers
(GuruFocus, December 2, 2009) On the eve of senate debating and voting on a major healthcare reform bill, CNBC brought out our favorite Investment Guru, interviewed by my favorite reporter.

























Bruce Berkowitz is very heavy with healthcare sector. GuruFocus data show that as of September 30, a hefty 36.4 percent of his stocks money is invested in Health Care related stocks. Followed by financials (31.1%) and consumer services (21.8%):

Industry2009-06-302009-09-30
Financials25%31.1%
Consumer Services20.2%21.8%
Health Care41%36.4%
Consumer Goods0%0%
Industrials13.5%10.5%


Specifically, here are the Health Care names that Berkowitz bet his fund’s money on:

Symbol Price ($) Number of Shares Weighting(%) Change from the 2Q09(%) % of Company
HUM 42.54 14962600 6.92 56.88 8.82
WLP 54.61 6644504 3.9 -23.72 1.4
WCG 35.31 8387474 2.56 -0.15 19.81
PFE 18.74 73469780 15.07 -15.73 1.09
FRX 31.56 14915414 5.44 -17.81 4.94
BMY 24.77 14100 -26.18


A brief survey of these companies:

Humana, Inc. (HUM)

Humana, Inc. is a health services company that facilitates the delivery of health care services through networks of providers to its medical members. Humana Inc. has a market cap of $7.22 billion; its shares were traded at around $42.54 with a P/E ratio of 7.4 and P/S ratio of 0.2. Humana Inc. had an annual average earning growth of 18.7% over the past 10 years. GuruFocus rated Humana Inc. the business predictability rank of 3-star.

WellPoint, Inc. (WLP)

WellPoint, Inc. is the largest publicly traded commercial health benefits company in terms of membership in the United States. Wellpoint Inc. has a market cap of $25.94 billion; its shares were traded at around $54.61 with a P/E ratio of 8.9 and P/S ratio of 0.4. Wellpoint Inc. had an annual average earning growth of 20.8% over the past 5 years.

WellCare Health Plans, Inc. (WCG)

WellCare Health Plans, Inc. provides managed care services targeted exclusively to government-sponsored healthcare programs, focusing on Medicaid and Medicare. WellCare provides high-quality, affordable healthcare services to members in Florida, New York, Connecticut, Illinois and Indiana. Wellcare Health Plans Inc. has a market cap of $1.5 billion; its shares were traded at around $35.31 with a P/E ratio of 28.4 and P/S ratio of 0.2.

Pfizer Inc (PFE)

Pfizer Inc is a research-based, global pharmaceutical company. Pfizer Inc has a market cap of $126.48 billion; its shares were traded at around $18.74 with a P/E ratio of 8.5 and P/S ratio of 2.6. The dividend yield of Pfizer Inc stocks is 3.4%. Pfizer Inc had an annual average earning growth of 11% over the past 10 years.

Forest Laboratories, Inc. (FRX)

Forest Laboratories, Inc. and its subsidiaries develop, manufacture and sell both branded and generic forms of ethical drug products. Forest Laboratories Inc. has a market cap of $9.52 billion; its shares were traded at around $31.56 with a P/E ratio of 9 and P/S ratio of 2.4. Forest Laboratories Inc. had an annual average earning growth of 30.7% over the past 10 years. GuruFocus rated Forest Laboratories Inc. the business predictability rank of 2-star.[

Bristol-Myers Squibb Company (BMY)

Bristol-Myers Squibb Company is a global leader in the research and development of drugs. Bristolmyers Squibb Company has a market cap of $49.07 billion; its shares were traded at around $24.77 with a P/E ratio of 12.3 and P/S ratio of 2.3. The dividend yield of Bristolmyers Squibb Company stocks is 5%.

GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Bruce Berkowitz for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.


Rating: 3.5/5 (11 votes)

Comments

kfh227
Kfh227 premium member - 5 years ago
Has PFE but no JNJ.

No offense but I must know these companies better than he does. PFE does stupid things like selling pieces (such as Tetra products) that give constant free cash flow streams to level out the chaos of the pharma business. Also, PFEs global research center in CT has a revolving door for top execs there. They are repeat the same stupid things mistakes of the past like outsourcing IT to India. Yes, they did this 5-10 years ago. It failed due to time zone/language issues. They broguth it back to the US. Then the revolving door exec with no tribal knowledge sent IT back to India (or somewhere) to "save money".

I own both PFE and JNJ. If it were not for the undervalued nature (possibly a value trap) of PFE, I would have dumped it long ago. Trust me though. If it gets near $25, it is gone.

AS for JNJ, management is much better and the product mix is better and they are wise with reinvestment of free cash flows.

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK