(GuruFocus, September 26, 2009) Back in November, 2008, President Obama was elected on a platform that included a sweeping health care reform. The ensuing financial and credit crisis delayed but did not make him forget about the campaign promises. In June 2009, five months after inauguration, President started to build momentum and the health care reform debate exploded and lasted through the summer.
We are still not certain what the final form of the reform will take. We do know the talks of change have scared investors from the sector and caused the relative underperform the sector.
One Investment Guru, Edward Owens, Manager of Vanguard Health Care Fund has much at stake in the reform. The stake is over $18.6 billion, and that the amount under his management. As of July 31, he has a little over $1 billion in cash and the rest are invested in various Health Care related stocks.
It should tell something to see what he bought during 2Q09 when the anxiety of Health Care debate was building up. The percentage of portfolio below is based on the his total $16.74 billion equity portfolio as of June 30, 2009.
No. 1: BristolMyersSquibb Company (BMY, Financial), Add: 0.17% of the portfolio to a total of 16,490,000 Shares
Bristol-Myers Squibb Company is a global leader in the research and development of innovative lifesaving and life-enhancing treatments for heart disease; high blood pressure; stroke; diabetes; cancer; HIV/AIDS and other infectious diseases; depression schizophrenia and other mental disorders; pain; and other conditions. Bristolmyers Squibb Company has a market cap of $44.41 billion; its shares were traded at around $22.42 with a P/E ratio of 11.4 and P/S ratio of 2.2. The dividend yield of Bristolmyers Squibb Company stocks is 5.6%.
No. 2: Cephalon Inc. (CEPH, Financial), Add: 0.2% of the portfolio to a total of 2,002,000 Shares
Cephalon is an international biopharmaceutical company focused on thediscovery development and marketing of products to treat sleep disordersneurological disorders cancer and pain. In addition to an active research and development program they market products in the United States and various countries in Europe. Cephalon Inc. has a market cap of $4.4 billion; its shares were traded at around $58.91 with a P/E ratio of 10.9 and P/S ratio of 2.3. Cephalon Inc. had an annual average earning growth of 10.1% over the past 5 years.
No. 3: Cardinal Health Inc. (CAH, Financial), Add: 0.16% of the portfolio - Total: 6,236,708 Shares
Cardinal Health Inc. is one of the leading providers of products and services to healthcare providers and manufacturers to help them improve the efficiency and quality of healthcare. These services and products include Pharmaceutical Distribution and Provider Services Medical-Surgical Products and Services Pharmaceutical Technologies and Services and Automation and Information Services. Cardinal Health Inc. has a market cap of $9.83 billion; its shares were traded at around $27.32 with a P/E ratio of 7.9 and P/S ratio of 0.1. The dividend yield of Cardinal Health Inc. stocks is 5.2%. Cardinal Health Inc. had an annual average earning growth of 10.7% over the past 10 years. GuruFocus rated Cardinal Health Inc. the business predictability rank of 3-star.
No. 4: Energizer Holdings Inc. (ENR, Financial), Buy: 0.12% of the portfolio to a total of 387,300 Shares
Energizer Holdings is the world's largest manufacturer of primary batteries and flashlights and a global leader in the dynamic business of providing portable power. Energizer's subsidiaries manufacture and market a complete line of primary alkaline and carbon zinc batteries under the Energizer and Eveready brands as well as miniature batteries and flashlights and other lighting products. Energizer also markets a line of rechargeable batteries. (PRESS RELEASE) Energizer Holdings Inc. has a market cap of $4.41 billion; its shares were traded at around $63.57 with a P/E ratio of 10.9 and P/S ratio of 1.1. Energizer Holdings Inc. had an annual average earning growth of 27.9% over the past 5 years.
No. 5: UCB S A (UCBJF.PK, Financial), Buy: 0.37% of the portfolio to a total of 1,944,146 Shares
UCB SA is a Belgium-based biopharmaceutical and specialty chemical company that specializes in providing therapy for central nervous system disorders including epilepsy diabetic neuropathic pain sclerosis and Parkinson's disease. It also provides therapy in the areas of oncology immunology inflammation allergy and respiratory diseases. UCB delivers small and large molecule solutions to specialists for use in the treatment of severe diseases. Ucb S A has a market cap of $7.85 billion; its shares were traded at around $33.65 .
Conclusion
Edward Owens does not give many speeches and his was quite economical with his words in the annual and semi-annual shareholder reports. I guess that is because underneath the big umbrella Vanguard, he does not have to campaign for more money. Plus he already has over $18.6 billion. How much more can he manage without affecting his performance. Here is what he said about the economic environment in the semi-annual report that came out on July 31, 2009:
And on the outlook:
As you could imagine, Owens is fully aware of the room he is walking into, yet, he bought the above-mentioned stocks.
GuruFocus provides real time information and insights of Investment Gurus such as W arren Buffett and Edward Owens for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
We are still not certain what the final form of the reform will take. We do know the talks of change have scared investors from the sector and caused the relative underperform the sector.
One Investment Guru, Edward Owens, Manager of Vanguard Health Care Fund has much at stake in the reform. The stake is over $18.6 billion, and that the amount under his management. As of July 31, he has a little over $1 billion in cash and the rest are invested in various Health Care related stocks.
It should tell something to see what he bought during 2Q09 when the anxiety of Health Care debate was building up. The percentage of portfolio below is based on the his total $16.74 billion equity portfolio as of June 30, 2009.
No. 1: BristolMyersSquibb Company (BMY, Financial), Add: 0.17% of the portfolio to a total of 16,490,000 Shares
Bristol-Myers Squibb Company is a global leader in the research and development of innovative lifesaving and life-enhancing treatments for heart disease; high blood pressure; stroke; diabetes; cancer; HIV/AIDS and other infectious diseases; depression schizophrenia and other mental disorders; pain; and other conditions. Bristolmyers Squibb Company has a market cap of $44.41 billion; its shares were traded at around $22.42 with a P/E ratio of 11.4 and P/S ratio of 2.2. The dividend yield of Bristolmyers Squibb Company stocks is 5.6%.
No. 2: Cephalon Inc. (CEPH, Financial), Add: 0.2% of the portfolio to a total of 2,002,000 Shares
Cephalon is an international biopharmaceutical company focused on thediscovery development and marketing of products to treat sleep disordersneurological disorders cancer and pain. In addition to an active research and development program they market products in the United States and various countries in Europe. Cephalon Inc. has a market cap of $4.4 billion; its shares were traded at around $58.91 with a P/E ratio of 10.9 and P/S ratio of 2.3. Cephalon Inc. had an annual average earning growth of 10.1% over the past 5 years.
No. 3: Cardinal Health Inc. (CAH, Financial), Add: 0.16% of the portfolio - Total: 6,236,708 Shares
Cardinal Health Inc. is one of the leading providers of products and services to healthcare providers and manufacturers to help them improve the efficiency and quality of healthcare. These services and products include Pharmaceutical Distribution and Provider Services Medical-Surgical Products and Services Pharmaceutical Technologies and Services and Automation and Information Services. Cardinal Health Inc. has a market cap of $9.83 billion; its shares were traded at around $27.32 with a P/E ratio of 7.9 and P/S ratio of 0.1. The dividend yield of Cardinal Health Inc. stocks is 5.2%. Cardinal Health Inc. had an annual average earning growth of 10.7% over the past 10 years. GuruFocus rated Cardinal Health Inc. the business predictability rank of 3-star.
No. 4: Energizer Holdings Inc. (ENR, Financial), Buy: 0.12% of the portfolio to a total of 387,300 Shares
Energizer Holdings is the world's largest manufacturer of primary batteries and flashlights and a global leader in the dynamic business of providing portable power. Energizer's subsidiaries manufacture and market a complete line of primary alkaline and carbon zinc batteries under the Energizer and Eveready brands as well as miniature batteries and flashlights and other lighting products. Energizer also markets a line of rechargeable batteries. (PRESS RELEASE) Energizer Holdings Inc. has a market cap of $4.41 billion; its shares were traded at around $63.57 with a P/E ratio of 10.9 and P/S ratio of 1.1. Energizer Holdings Inc. had an annual average earning growth of 27.9% over the past 5 years.
No. 5: UCB S A (UCBJF.PK, Financial), Buy: 0.37% of the portfolio to a total of 1,944,146 Shares
UCB SA is a Belgium-based biopharmaceutical and specialty chemical company that specializes in providing therapy for central nervous system disorders including epilepsy diabetic neuropathic pain sclerosis and Parkinson's disease. It also provides therapy in the areas of oncology immunology inflammation allergy and respiratory diseases. UCB delivers small and large molecule solutions to specialists for use in the treatment of severe diseases. Ucb S A has a market cap of $7.85 billion; its shares were traded at around $33.65 .
Conclusion
Edward Owens does not give many speeches and his was quite economical with his words in the annual and semi-annual shareholder reports. I guess that is because underneath the big umbrella Vanguard, he does not have to campaign for more money. Plus he already has over $18.6 billion. How much more can he manage without affecting his performance. Here is what he said about the economic environment in the semi-annual report that came out on July 31, 2009:
After collapsing to a historic low in early March, the stock market strongly rebounded to post excellent returns for the six-month period. During this time, health care stocks demonstrated their typically defensive characteristics, outperforming during the decline phase and then seriously lagging the subsequent rebound. Complicating the picture has been the market’s anticipation of the effects of U.S. health care reform. More aggressive intrusion by the government into the management of health care is being interpreted as negative for industry. :
And on the outlook:
Following the sector’s significant underperformance in what may prove to have been a bear market rally, we believe health care is now positioned to perform well relative to the rest of the market. Valuations are reasonable. If the health care reform package ends up on the moderate side, the outlook could be quite favorable. Our all-weather strategy of diversification across industry subsectors and geographies with a focus on attractive valuations remains the centerpiece of our investment strategy. :
As you could imagine, Owens is fully aware of the room he is walking into, yet, he bought the above-mentioned stocks.
GuruFocus provides real time information and insights of Investment Gurus such as W arren Buffett and Edward Owens for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
