The Eaton Vance Worldwide Health Sciences Fund (Trades, Portfolio) disclosed this week that it established three new holdings during fourth-quarter 2019: Humana Inc. (HUM, Financial), Exact Sciences Corp. (EXAS, Financial) and Abcam PLC (LSE:ABC, Financial).
Managed by Jason Kritzer, a vice president of Eaton Vance Management, the fund invests worldwide in companies principally engaged in the discovery, development, production and distribution of products and services related to scientific advances in health care, including biotechnology, pharmaceuticals, diagnostics, managed health care, medical equipment and supplies. The Boston and London-based fund seeks companies that are reasonably priced in relation to intrinsic value and have potential to increase market share or advance research and development products.
As of quarter-end, the fund’s $1.03 billion equity portfolio contains 55 stocks with a turnover ratio of 9%. The fund has approximately 42% of the equity portfolio in generic drug manufacturers and approximately 12.84% of the portfolio in biotech.
Humana
The fund purchased 73,559 shares of Humana, giving the position 2.44% weight in the equity portfolio. Shares averaged $290.54 during the quarter.
The Louisville, Kentucky-based company provides government-sponsored plans, with approximately 75% of memberships tied to government health care programs like Medicare and Medicaid. GuruFocus ranks Humana’s profitability 8 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and a return on equity that outperforms over 75% of global competitors.
Other gurus riding Humana’s high profitability include Steve Mandel (Trades, Portfolio)’s Lone Pine Capital and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.
Exact Sciences
The fund purchased 84,144 shares of Exact Sciences, giving the holding 0.66% weight in the equity portfolio. Shares averaged $93.48 during the quarter.
The Madison, Wisconsin-based company analyzes stool-based DNA samples to detect the precancerous and early states of colorectal cancer. GuruFocus ranks the company’s financial strength 5 out of 10: Although it has a strong Altman Z-score of 7.89, Exact Sciences’ debt-to-equity ratio of 1.09 underperforms 84.07% of global medical diagnostics and research competitors.
Gurus with holdings in Exact Sciences include Andreas Halvorsen (Trades, Portfolio), Spiros Segalas (Trades, Portfolio) and PRIMECAP Management (Trades, Portfolio). During the quarter, Segalas added 118,145 shares, increasing the position 8.44%.
Abcam
The fund purchased 272,036 shares of Abcam, giving the position 0.46%. Shares averaged 11.89 pounds ($15.46) during the quarter.
The U.K.-based biotech company develops and provides antibodies to life science research and clinical communities. According to GuruFocus, Abcam has no long-term debt, suggesting good short-term financial strength. Other positive investing signs that contribute to a GuruFocus profitability rank of 10 include a five-star business predictability rank and operating margins that are outperforming over 94% of global competitors despite contracting approximately 1.9% per year on average over the past five years.
The Wasatch International Growth (Trades, Portfolio) Fund also has a holding in Abcam.
Disclosure: No positions.
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