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HealthCor Management is a $3.6 billion healthcare hedge fund founded by Arthur Cohen and Joseph Healey. Cohen graduated from the University of Virginia in 1983 with a B.A. degree in Commerce and received his M.B.A. in Banking and Finance from Hofstra University in 1986. He worked for Julian Robertson between 1995 and 2000. He was responsible for healthcare investments as a Managing Director at Tiger Management. He partnered with Joseph P. Healey in September 2005.

Cohen and Healey invest significant amounts in the healthcare industry by diversifying their portfolio in different stocks. Nearly two thirds of his investments are in the healthcare sector. Cohen's Healthcor Management LP had 63 securities in its 13F portfolio as of March 31, 2011. We noticed that Arthur Cohen has been holding 10 of these securities during last three years.

In the first quarter of 2011, he sold 14 securities and bought 26 new securities. The two largest stocks that Cohen sold in the last quarter are Tupperware Brands Corporation (NYSE:TUP) and Cardinal Health Inc (NYSE:CAH). TUP has returned 6.1% and CAH has returned 10% since the end of March. During the first quarter of 2011, Cohen placed new bets on Quest Diagnostics Inc (NYSE:DGX) by buying 3 million shares. He also purchased 2.2 million shares of Allergan Inc (NYSE:AGN) and 3.8 million shares of Sara Lee Corp (SLE) during the first quarter of 2011.

Cohen also increased some of his holdings significantly. He increased his position on Watson Pharmaceutıcals Inc (WPI) by 375%. He bet big on Abbott Laboratories (NYSE:ABT) by increasing his holdings to $255 million at the end of March. He also increased his Perkinelmer Inc (NYSE:PKI) position to $78 million by buying 2.2 million shares during the first quarter of 2011.

Here is how Cohen’s top picks performed since the end of March 2011:

Stock

Value
(Millions)

Return
Since Mar 31,2011

GILEAD SCIENCES INC (NASDAQ:GILD)

297.3

-5.4%

ABBOTT LABORATORIES (ABT)

255.1

9.9%

COVIDIEN PLC (NYSE:COV)

223.3

10.7%

LIFE TECHNOLOGIES CORPORATION (NASDAQ:LIFE)

214.9

4.1%

CIGNA CORP (NYSE:CI)

177.1

11.9%

QUEST DIAGNOSTICS INC (DGX)

173.2

1.4%

ALLERGAN INC COM STK (AGN)

156.2

17.6%

MAGELLAN HEALTH SERVICES INC (NASDAQ:MGLN)

147.2

6.3%

UNIVERSAL HEALTH SER VICES INC (NYSE:UHS)

133.4

8.8%

HUMANA INC (NYSE:HUM)

132.9

13.6%

DAVITA INC (NYSE:DVA)

128.3

1.4%

BAXTER INTL INC (NYSE:BAX)

121.0

12.0%

WELLPOINT INC (WLP)

111.7

17.2%

WATSON PHARMACEUTICALS INC (WPI)

106.4

11.7%

NEKTAR THERAPEUTICS SHS (NASDAQ:NKTR)

87.1

1.3%

PALL CORP (NYSE:PLL)

86.4

-3.4%

PERKINELMER INC (PKI)

78.8

7.7%

CAREFUSION CP (NYSE:CFN)

77.6

3.3%

SARA LEE CORP (SLE)

67.1

11.3%

SALIX PHARMACEUTICALS (NASDAQ:SLXP)

56.0

11.4%

INTERMUNE INC (NASDAQ:ITMN)

54.3

-20.1%

AMGEN INC (NASDAQ:AMGN)

53.5

14.2%

WELLCARE HEALTH PLANS INC (NYSE:WCG)

42.0

19.5%

CORNING INC (NYSE:GLW)

41.3

-1.9%

COLGATE PALMOLIVE CO (NYSE:CL)

40.4

8.4%

TEVA PHARM (NYSE:TEVA)

40.1

0.6%

ALLSCRIPTS HEALTHCARE SOLUTION (NASDAQ:MDRX)

39.9

-3.0%

HILL-ROM HOLDINGS (NYSE:HRC)

38.0

22.2%

CUBIST PHARMACEUTICALS INC (NASDAQ:CBST)

35.3

42.5%

EHEALTH INC (NASDAQ:EHTH)

29.9

-1.1%

Value Weighted Return

3,246

7.1%

SPY

N/A

1.6%

Cohen's largest stock picks have gained 7.1% since the end of first quarter 2011, vs. a 1.6% gain for the SPY. Gilead was Cohen's biggest investment at the end of March 2011. Gilead has lost 5.4% since then, underperforming the SPY’s 1.6% return. Cohen has $297 million invested in Gilead. The stock has a market cap of $31.6 billion and P/E ratio of 12.6. Jim Simons’ Medallion Fund also had $102 million invested in GILD at the end of 2010.

Abbott Laboratories was Cohen's second biggest investment at the end of March 2011. ABT has gained 9.9% since then, outperforming the SPY’s 1.6% return. Cohen has $255 million invested in ABT. ABT recently traded at $53.42 and has a 3.6% dividend yield. The stock has a market cap of $83 billion and P/E ratio of 18.6. Laurence D. Fink's BlackRock, Perry Traquina's Wellington Management and Jim Simons’ Medallion Fund had large investments in ABT as well. Recently, Fox Business News interviewed Smead Value Fund’s Bill Smead and asked him the question “where to invest in 2011“. ABT is one of the top 3 picks of Bill Smead for 2011.

Covidien Plc has gained 10.7% since March, outperforming the SPY by 9.1 percentage points. Cohen had nearly $223 million invested at the end of March. COV recently traded at $57.48 and has a 1.4% dividend yield. The stock has a market cap of $28.5 billion and P/E ratio of 17. David Tepper’s Appaloosa also had $22 million invested on COV shares at the end of December. Roberto Mignone’s Bridger Management had large investment in COV as well.

Quest Diagnostics was Cohen's biggest new investment at the end of March 2011. DGX has gained 1.4% since March, underperforming the SPY by 0.2 percentage points. Cohen had nearly $173 million invested at the end of March. DGX recently traded at $58.42 and has a 0.7% dividend yield. The stock has a market cap of $9.2 billion and P/E ratio of 20.

Allergan has gained 17.6% since March, outperforming the SPY by 16 percentage points. Cohen had nearly $156 million invested at the end of March. AGN recently traded at $83.5 and has a 0.2% dividend yield. The stock has a market cap of $25.5 billion and P/E ratio of 0.2. With this second biggest purchase during first quarter, he joins Passport Capital’s John Burbank and Roberto Mignone’s Bridger Management.

CBST has had one of the best performances in his portfolio since the end of March. Cohen had $35.3 million in CBST shares at the end of March. CBST has gained 42.5% in the seven weeks, beating the SPY by a large margin. On top of these large positions HealthCor recently initiated an activist position in CareView Communications (OTCQB:CRVW) with very favorable terms. We believe investors may be able to beat the market by imitating HealthCor's largest positions.

Source: Arthur Cohen and Joseph Healey's Successful Stock Picks