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Sydnee Gatewood
Sydnee Gatewood
Articles (331) 

Paul Tudor Jones’ Top 4 Health Care Buys

Guru invested in multiple health care stocks in 1st quarter

Paul Tudor Jones (Trades, Portfolio)’ Tudor Investment Corp. gained 325 new holdings during the first quarter. Among his purchases were multiple health care stocks including VCA Inc. (NASDAQ:WOOF), DaVita Inc. (NYSE:DVA), Pacira Pharmaceuticals Inc. (NASDAQ:PCRX) and Edwards Lifesciences Corp. (NYSE:EW).

Having previously sold out of VCA in fourth-quarter 2016, Jones initiated a new stake of 370,000 shares for an average price of $89.70 per share, giving it 1.04% portfolio space.

The veterinary services provider has a market cap of $7.5 billion; its shares were trading around $91.9 on Thursday with a price-earnings (P/E) ratio of 35.2, a price-book (P/B) ratio of 4.9 and a price-sales (P/S) ratio of 2.8.

The Peter Lynch chart below shows the stock is trading above its fair value.

1495116022670.png

GuruFocus ranked VCA’s financial strength 7 of 10 and its profitability and growth 8 of 10. The company does not pay a dividend, but it has grown its earnings per share by 18.7% per year and its revenue by 15.3% per year over the past three years.

With his purchase, Jones became the company’s largest guru shareholder with 0.5% of its outstanding shares. Mario Gabelli (Trades, Portfolio), Jim Simons (Trades, Portfolio), Third Avenue Management (Trades, Portfolio) and Ken Fisher (Trades, Portfolio) also hold the stock.

After exiting his DaVita stake in first-quarter 2016, Jones established a new holding of 461,620 shares, a 0.97% portfolio weighting. He paid an average price of $66.21 per share.

The kidney dialysis provider has a market cap of $12.4 billion; its shares were trading around $63.95 on Thursday with a P/E ratio of 10.5, a P/B ratio of 2.4 and a P/S ratio of 0.8.

According to the Peter Lynch chart below, the stock is trading below its fair value.

1495116380972.png

GuruFocus ranked DaVita’s financial strength 5 of 10 and its profitability and growth 8 of 10. The company does not pay a dividend but has grown its EPS by 14.1% and its revenue by 9.5% per annum over the past three years.

Warren Buffett (Trades, Portfolio) is DaVita’s largest guru shareholder with 19.8% of its outstanding shares. In all, 10 gurus own the stock.

Having exited his position in Pacira Pharmaceuticals in first-quarter 2016, Jones purchased 501,470 shares for an average price of $43.22. The trade expanded the portfolio 0.7%.

The specialty pharmaceutical company has a market cap of $1.9 billion; its shares were trading around $48.20 on Thursday with a forward P/E ratio of 434.8, a P/B ratio of 7.1 and a P/S ratio of 6.5.

Based on the Peter Lynch chart below, the stock appears to be trading above its fair value.

1495117657045.png

GuruFocus ranked Pacira’s financial strength 5 of 10 and its profitability and growth 5 of 10. The company does not pay a dividend but has grown its EPS by -19.1% per year and its revenue by 42.3% per year over the past three years.

Mariko Gordon (Trades, Portfolio) is Pacira’s largest shareholder among the gurus with 2.9% of outstanding shares. Steven Cohen (Trades, Portfolio), Ron Baron (Trades, Portfolio) and Fisher also hold the stock.

After selling out of Edwards Lifesciences in third-quarter 2016, Jones bought 208,491 shares for an average price of $93.92 per share, giving it 0.6% portfolio space.

The heart valve manufacturer has a market cap of $23.5 billion; its shares were trading around $111.83 on Thursday with a P/E ratio of 37.2, a P/B ratio of 8.6 and a P/S ratio of 7.7.

The Peter Lynch chart below shows the stock is trading above its fair value.

1495118423609.png

GuruFocus ranked the company’s financial strength 7 of 10 and its profitability and growth 9 of 10. The company does not pay a dividend. Over the past three years, the company has grown its revenue by 14.8% and its EPS by 15.1% per year.

Among the gurus invested in Edwards Lifesciences, Frank Sands (Trades, Portfolio) is the largest shareholder with 3.8% of outstanding shares. In total, 12 gurus own the stock.

Other new positions Jones gained during the quarter include Merit Medical Systems Inc. (NASDAQ:MMSI), Sarepta Therapeutics Inc. (NASDAQ:SRPT), Jounce Therapeutics Inc. (NASDAQ:JNCE) and Prothena Corp. PLC (NASDAQ:PRTA). Health care stocks account for 11.2% of his portfolio. Jones’ current portfolio consists of 1,348 stocks and is valued at $3.25 billion.

Disclosure: I do not own any stocks mentioned in the article.

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About the author:

Sydnee Gatewood
I am an editorial assistant at GuruFocus. I have a BA in journalism and an MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneeg

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