The Eaton Vance Worldwide Health Science Fund, part of Boston-based Eaton Vance, disclosed in a regulatory portfolio update that its top trades during the first quarter included a new holding in Amplifon SpA (MIL:AMP, Financial) and the switch of its Abcam PLC holding from the U.K.-listed shares (LSE:ABC, Financial) to the U.S.-listed shares (ABCM, Financial). The fund also closed its position in Inari Medical Inc. (NARI, Financial) and trimmed its holdings of Johnson & Johnson (JNJ, Financial) and Novo Nordisk (OCSE:NOVO B, Financial).
The fund seeks long-term capital appreciation by investing in global companies principally engaged in the discovery, development, production or distribution of products and services related to scientific advances in health care. Stock selection is based on several key factors, including the potential to increase market share and the potential for research and development projects. The fund looks for stocks that are reasonably priced in relation to intrinsic value.
As of February, the fund’s $984 million equity portfolio contains 48 stocks, with four new positions and a quarterly turnover ratio of 3%. The top five health care industries in terms of weight are drug manufacturers, medical devices and instruments, medical diagnostics and research, health care plans and biotech, accounting for 41.96%, 18.66%, 13.14%, 10.4% and 9.99% of the equity portfolio.
Investors should be aware that portfolio updates for mutual funds do not necessarily provide a complete picture of a guru’s holdings. The data is sourced from the quarterly updates on the website of the fund(s) in question. This usually consists of long equity positions in U.S. and foreign stocks. All numbers are as of the quarter’s end only; it is possible the guru may have already made changes to the positions after the quarter ended. However, even this limited data can provide valuable information.
Amplifon
The fund purchased 189,111 shares of Amplifon (MIL:AMP, Financial), giving the position 0.56% equity portfolio weight.
Shares of Amplifon averaged 27.22 euros ($30.05) during the first quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.79 as of Thursday.
The Italian hearing solutions company has a GF Score of 83 out of 100 based on a growth rank of 10 out of 10, a rank of 9 out of 10 for profitability and GF Value, a financial strength rank of 4 out of 10 and a momentum rank of 1 out of 10.
Amplifon’s high profitability rank is driven by several positive investing signs, which include a 4.5-star business predictability rank and an operating margin that has increased by approximately 1.8% per year on average over the past five years and outperforms approximately 87% of global competitors.
Abcam
The fund exchanged 371,519 U.K. shares of Abcam (LSE:ABC, Financial) for the same number of the company’s U.S. shares (ABCM, Financial). The net impact on the equity portfolio was zero.
U.S. shares of Abcam averaged $15.54 during the first quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.72 as of Thursday.
The Cambridge, U.K.-based biotech company has a GF Score of 84 out of 100 based on a GF Value rank of 10 out of 10, a profitability rank of 8 out of 10, a growth rank of 7 out of 10, a financial strength rank of 6 out of 10 and a momentum rank of 4 out of 10.
Abcam’s high profitability rank is driven by several positive investing signs, which include operating margins outperforming more than 72% of global competitors and returns on equity topping more than 80% of global biotech companies.
Inari Medical
The fund sold all 151,170 shares of Inari Medical (NARI, Financial), reducing its equity portfolio by 1.04%.
Shares of Inari Medical averaged $63.02 during the first quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.41 as of Thursday.
The Irvine, California-based medical device company has a GF Score of 44 out of 100 based on a financial strength rank of 8 out of 10 and a rank of 4 out of 10 for profitability and GF Value. Despite this, the stock does not have enough data to compute ranks for momentum and growth and thus, the GF Score may give an incomplete picture of its potential.
The company’s high financial strength rank is driven by several positive investing signs, which include a high Altman Z-score of 27 and a cash-to-debt ratio that outperforms approximately 68% of global competitors.
Johnson & Johnson
The fund sold 143,723 shares of Johnson & Johnson (JNJ, Financial), trimming 32.57% of the position and 2.38% of its equity portfolio.
Shares of Johnson & Johnson averaged $170.45 during the first quarter; the stock is fairly valued based on its price-to-GF Value ratio of 0.92 as of Thursday.
The New Brunswick, New Jersey-based pharmaceutical company has a GF Score of 83 out of 100 based on a profitability rank of 9 out of 10, a growth rank of 8 out of 10, a financial strength rank of 7 out of 10, a GF Value rank of 6 out of 10 and a momentum rank of 2 out of 10.
Johnson & Johnson’s high profitability rank is driven by several positive investing signs, which include a four-star business predictability rank and an operating margin that outperforms approximately 91% of global competitors.
Other gurus with holdings in Johnson & Johnson include Ken Fisher (Trades, Portfolio)’s Fisher Investments and Bridgewater Associates.
Novo Nordisk
The fund sold 56,661 shares of Novo Nordisk (OCSE:NOVO B, Financial), paring 14.2% of the position and 0.66% of its equity portfolio.
Shares of Novo Nordisk averaged 946.41 Danish krone ($139.91) during the fourth quarter; the stock is modestly overvalued based on its price-to-GF Value ratio of 1.23 as of Thursday.
The Denmark-based diabetes care products company has a GF Score of 94 out of 100 based on a rank of 10 out of 10 for profitability and growth, a momentum rank of 9 out of 10, a financial strength rank of 8 out of 10 and a GF Value rank of 3 out of 10.
Novo Nordisk’s high profitability rank is driven by several positive investing signs, which include a five-star business predictability rank and an operating margin that outperforms approximately 95% of global biotech companies.
Gurus with holdings in Novo Nordisk’s U.S.-listed shares (NVO, Financial) include Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Fisher Investments.
