The Eaton Vance Worldwide Health Sciences Fund (Trades, Portfolio) disclosed its equity portfolio for the second quarter 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 one new position during the three months ended May 31, sold out of three stocks and added to or trimmed a number of other existing investments. Eaton Vance’s most notable trades included a new holding of Vertex Pharmaceuticals Inc. (VRTX, Financial), an increased bet on the iShares Global Healthcare ETF (IXJ, Financial), a reduction of the Gilead Sciences Inc. (GILD, Financial) investment and the divestment of Dechra Pharmaceuticals PLC (LSE:DPH, Financial).
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.
Vertex Pharmaceuticals
The fund invested in 51,891 shares of Vertex Pharmaceuticals (VRTX, Financial), allocating 1.69% of the equity portfolio to the position. The stock traded for an average price of $323.41 per share during the quarter.
The Boston-based biopharmaceutical company, which focuses on specialty markets, has a $92.06 billion market cap; its shares were trading around $357.45 on Monday with a price-earnings ratio of 28.46, a price-book ratio of 6.38 and a price-sales ratio of 10.11.
The GF Value Line suggests the stock is fairly valued currently based on historical ratios, past financial performance and analysts’ future earnings projections.
At 87 out of 100, the GF Score indicates the company has good outperformance potential. While it received high ratings for profitability, growth and financial strength, momentum was moderate and the value rank was low.
Of the gurus invested in Vertex, the Vanguard Health Care Fund (Trades, Portfolio) has the largest stake with 1.15% of its outstanding shares. Jim Simons (Trades, Portfolio)’ Renaissance Technologies, the Harbor Capital Appreciation Fund (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Ray Dalio (Trades, Portfolio)’s Bridgewater Associates and several other gurus also own the stock.
IShares Global Healthcare
Eaton Vance picked up 84,640 more shares of the iShares Global Healthcare ETF (IXJ, Financial), impacting the equity portfolio by 0.71%. Shares traded for an average price of $83.56 each during the quarter.
The fund now holds 148,730 shares total, accounting for 1.24% of the equity portfolio. GuruFocus estimates it has gained 1.89% on the investment so far.
The exchange-traded fund, which follows the performance of an index composed of global health care stocks, was trading around $86.60 on Monday.
The stock has gained around 2.86% year to date.
The 14-day relative strength index of 65.90 indicates the ETF is close to overbought levels.
With a 5.94% stake, Ken Fisher (Trades, Portfolio) is the ETF’s largest guru investor.
Gilead Sciences
The Worldwide Health Sciences Fund curbed its holding of Gilead Sciences (GILD, Financial) by 62.5%, selling 133,982 shares. The transaction had an impact of -1.09% on the equity portfolio. During the quarter, the stock traded for an average per-share price of $80.60.
The fund now holds 80,406 shares, which occupy 0.62% of the equity portfolio. GuruFocus data shows it has lost an estimated 16% on the investment so far.
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 $96.84 billion; its shares were trading around $77.64 on Monday with a price-earnings ratio of 17.52, a price-book ratio of 4.61 and a price-sales ratio of 3.61.
According to the GF Value Line, the stock is fairly valued currently.
Further, the GF Score of 80 implies the company is likely to have average performance going forward on the back of high profitability and momentum ranks, middling marks for growth and financial strength and a low value rating.
Dodge & Cox is Gilead’s largest guru shareholder with a 2.78% stake. Other top guru investors include Simons’ firm, the Parnassus Value Equity Fund (Trades, Portfolio) and John Rogers (Trades, Portfolio).
Dechra Pharmaceuticals
Impacting the equity portfolio by -0.76%, Eaton Vance sold all 227,283 shares of Dechra Pharmaceuticals (LSE:DPH, Financial). The stock traded for an average price of 31.45 pounds per share ($40.31) during the quarter.
GuruFocus found the fund gained around 12.88% on the investment over its lifetime.
The British company, which develops and markets veterinary products, has a market cap of 4.24 billion pounds; its shares closed at 37.26 pounds on Friday with a price-earnings ratio of 103.79, a price-book ratio of 5.04 and a price-sales ratio of 5.72.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
The GF Score of 94 means the company has high outperformance potential, driven by high ratings for three of the criteria and more moderate financial strength and momentum ranks.
No gurus are currently invested in the stock.
Additional trades and portfolio performance
During the quarter, the fund also cut back its holdings of Waters Corp. (WAT, Financial) and Centene Corp. (CNC, Financial), sold out of Fisher & Paykel Healthcare Corp. Ltd. (NASE:FPH) and boosted its Humana Inc. (HUM, Financial) position.
Eaton Vance’s $996 million equity portfolio, which is composed of 46 stocks, is largely invested in the drug manufacturing industry with a weight of 41.13%.
The fund returned -9.43% in fiscal 2022, underperforming the MSCI World Health Care Index’s -5.41% return.
