The Eaton Vance Worldwide Health Sciences Fund (Trades, Portfolio) disclosed its equity portfolio for the fourth quarter of 2022 earlier this week.
Part of Boston-based Eaton Vance, the fund, which is managed by Jason Kritzer and Samantha Pandolfi, invests heavily in the health care space. The portfolio managers look around the world for securities that are not only reasonably priced, but are expected to grow in value over time.
NPORT-P filings show the fund entered three new holdings during the three months ended Nov. 30, sold out of five stocks and added to or trimmed a number of other existing investments. Eaton Vance’s most notable trades included new positions in Stryker Corp. (SYK, Financial), Gilead Sciences Inc. (GILD, Financial) and Humana Inc. (HUM, Financial) as well as the divestment of the iShares Global Healthcare ETF (IXJ, Financial) and Edwards Lifesciences Corp. (EW, Financial) holdings.
Investors should be aware that, just like 13F filings, NPORT-P reports do not provide a complete picture of a guru’s holdings to the public. Filed by certain mutual funds after each quarter’s end, they collect a wide variety of information on the fund for the SEC’s reference, but in general, the only information made public is in regard to long equity positions. Unlike 13Fs, they do require some disclosure for long equity positions in foreign stocks. Despite their limitations, even these partial filings can provide valuable information.
Stryker
The fund invested in 111,116 shares of Stryker (SYK, Financial), allocating 2.42% of the equity portfolio to the position. The stock traded for an average price of $216.90 per share during the quarter.
The Kalamazoo, Michigan-based medical device company, which manufactures a variety of products that include knee and hip replacements, endoscopy systems, operating room equipment, hospital beds and spinal devices, has a $95.77 billion market cap; its shares were trading around $253.06 on Friday with a price-earnings ratio of 39.36, a price-book ratio of 5.82 and a price-sales ratio of 5.40.
The GF Value Line suggests the stock is modestly fairly valued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
The GF Score of 92 out of 100 also indicates the company has high outperformance potential, driven by solid ratings for profitability, growth and momentum and middling marks for GF Value and financial strength.
Of the gurus invested in Stryker, the Vanguard Health Care Fund (Trades, Portfolio) has the largest stake with 1.41% of its outstanding shares. Ken Fisher (Trades, Portfolio) and Diamond Hill Capital (Trades, Portfolio) also have sizeable positions in the stock.
Gilead Sciences
The Worldwide Health Sciences Fund picked up 214,388 shares of Gilead Sciences (GILD, Financial), dedicating 1.75% of the equity portfolio to the holding. Shares traded for an average price of $71.54 each during the quarter. The fund previously sold out of the stock in the third quarter of 2020.
The biopharmaceutical company headquartered in Foster City, California, which develops antiviral drugs to treat HIV, AIDS, hepatitis B and C, influenza and Covid-19, has a market cap of $104.20 billion; its shares were trading around $83.38 on Friday with a price-earnings ratio of 31.46, a price-book ratio of 4.96 and a price-sales ratio of 3.87.
According to the GF Value Line, the stock is modestly overvalued currently.
Further, the GF Score of 70 implies the company has poor future performance potential. While it received a high profitability rank, the growth and financial strength ratings were more moderate and the GF Value and momentum were low.
With 2.90% of its outstanding shares, Dodge & Cox is the company’s largest guru shareholder. Other top guru investors include Jim Simons (Trades, Portfolio)’ Renaissance Technologies, John Rogers (Trades, Portfolio) and the Parnassus Value Equity Fund (Trades, Portfolio).
Humana
Eaton Vance entered a 27,524-share position in Humana (HUM, Financial), giving it 1.41% space in the equity portfolio. During the quarter, the stock traded for an average per-share price of $512.74. The fund previously exited the stock during the second quarter of 2021.
The Louisville, Kentucky-based health insurance company has a $61.75 billion market cap; its shares were trading around $485.04 on Friday with a price-earnings ratio of 22, a price-book ratio of 3.78 and a price-sales ratio of 0.67.
Based on the GF Value Line, the stock appears to be fairly valued currently.
With a GF Score of 89, the company has good outperformance potential on the back of high ratings for profitability and growth as well as moderate financial strength, GF Value and momentum ranks.
Vanguard is the company’s largest guru shareholder with a 1.73% stake. Humana is also being held by Diamond Hill, Barrow, Hanley, Mewhinney & Strauss, Simons’ firm, Hotchkis & Wiley, Lee Ainslie (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Chris Davis (Trades, Portfolio), Ray Dalio (Trades, Portfolio)’s Bridgewater Associates and many others.
IShares Global Healthcare ETF
The fund exited a 194,624-share holding in the iShares Global Healthcare ETF (IXJ, Financial), impacting the equity portfolio by -1.51%. The stock traded for an average price of $79.46 per share during the quarter.
GuruFocus estimates Eaton Vance gained 1.45% on the investment over its lifetime.
The exchange-traded fund, which tracks the performance of an index composed of global health care stocks, was trading around $84.34 on Friday.
The 14-day relative strength index of 48.98 indicates the ETF is neither overbought nor oversold.
Fisher is currently the only guru invested in the ETF.
Edwards Lifesciences
The Worldwide Health Sciences Fund dumped its 137,573 remaining shares of Edwards Lifesciences (EW, Financial), which had an impact of -1.23% on the equity portfolio. During the quarter, shares traded for an average price of $82.18 each.
GuruFocus found the fund gained approximately 162.47% on the long-held investment.
Headquartered in Irvine, California, the medical devices manufacturer, which specializes in artificial heart valves and hemodynamic monitoring, has a market cap of $48.21 billion; its shares were trading around $78.18 on Friday with a price-earnings ratio of 33.70, a price-book ratio of 7.79 and a price-sales ratio of 9.14.
The GF Value Line suggests the stock is modestly undervalued currently.
The company has high outperformance potential with a GF Score of 96. Although four of the criteria raked in solid ratings, the momentum rank was more moderate.
Frank Sands (Trades, Portfolio) is Edwards Lifesciences’ largest guru shareholder with a 1.68% stake. Other top guru investors include Vanguard, Fisher, PRIMECAP Management (Trades, Portfolio), Dalio’s firm, Baillie Gifford (Trades, Portfolio), David Rolfe (Trades, Portfolio), Simons’ firm and Ron Baron (Trades, Portfolio).
Additional trades and portfolio performance
During the quarter, the fund also cut back its holdings of AbbVie Inc. (ABBV, Financial) and Eli Lilly and Co. (LLY, Financial), sold out of Novartis AG (XSWX:NOVN, Financial) and Abbott Laboratories (ABT, Financial) and boosted its Neogen Corp. (NEOG, Financial) position.
Eaton Vance’s $1.07 billion equity portfolio, which is composed of 46 stocks, is largely invested in the drug manufacturing industry with a weight of 44.27%.
The fund returned -9.43% in fiscal 2022, underperforming the MSCI World Health Care Index’s -5.41% return.
