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Healthcor Management is a healthcare hedge fund founded by Arthur Cohen and Joseph Healey. From 1995 till 2000, Arthur Cohen worked at Julian Robertson’s Tiger Management. He was a managing director in charge of healthcare sector investments. Cohen met Joseph Healey at Steven Cohen’s SAC Capital. Both Cohen and Healey worked there till 2005, prior to founding Healthcor. Healey and Cohen invest heavily in the healthcare sector. More than half of Healthcor’s investments are in healthcare companies. The hedge fund has proved to be among the best hedge funds during the second quarter, despite its concentrated portfolio. In 2008, Healthcor returned 4%, whereas the return for an average hedge fund was -19%.

Here are the top healthcare stocks snapped up by Healthcor Management as of June 30:

Company

Ticker

Value (x1000)

Return Since June

AETNA INC

(NYSE:AET)

189587

-8%

QUEST DIAGNOSTICS

(NYSE:DGX)

189120

-16%

STRYKER CORP

(NYSE:SYK)

170201

-19%

MAGELLAN HEALTH SERVICES

(NASDAQ:MGLN)

164220

-14%

ALLSCRIPTS HEALTHCARE SOLNS

(NASDAQ:MDRX)

135940

-9%

COVIDIEN PLC

(NYSE:COV)

128018

-10%

UNIVERSAL HEALTH SERVICES

(NYSE:UHS)

123672

-28%

CARDINAL HEALTH INC

(NYSE:CAH)

120363

-10%

DAVITA INC

(NYSE:DVA)

112593

-17%

HUMANA INC

(NYSE:HUM)

104702

-5%

CIGNA CORP

(NYSE:CI)

82288

-12%

PERKINELMER INC

(NYSE:PKI)

80730

-23%

SALIX PHARMACEUTICALS

(NASDAQ:SLXP)

79660

-28%

SIRONA DENTAL SYSTEMS

(NASDAQ:SIRO)

69030

-18%

CUBIST PHARMACEUTICALS

(NASDAQ:CBST)

68381

-10%

PALL CORP

(NYSE:PLL)

67476

-23%

NEKTAR THERAPEUTICS

(NASDAQ:NKTR)

66884

-29%

UNITED THERAPEUTICS

(NASDAQ:UTHR)

63365

-20%

BAXTER INTERNATIONAL

(NYSE:BAX)

59690

-9%

FORTUNE BRANDS INC

(FO)

57393

-11%

CAREFUSION CORP

(NYSE:CFN)

54340

-13%

WELLCARE HEALTH PLANS

(NYSE:WCG)

51924

-17%

TENET HEALTHCARE

(NYSE:THC)

50544

-26%

Since the end of the second quarter, Aetna Inc has lost 8%. During the second quarter, Healthcor increased its position in Aetna by 27 times. Healthcor had around $189.6 million in Aetna at the end of June. It is the currently the largest holding of Healthcor’s equity portfolio. Healthcor has the second-highest stake in the company, preceded by Larry Robbins’ Glenview Capital, which had $231 million invested in Aetna at the end of June (check out Larry Robbins’ top stock picks).

During the second quarter, Healthcor initiated a $170 million position in Stryker Corp. The firm has the largest position in Stryker among the 300+ hedge funds we are tracking. The company is the third-largest holding of Healthcor’s 13F portfolio. However, Stryker lost 19% since the end of second quarter. Ken Griffin, Phill Gross, Jim Simons, and Steven Cohen all increased their stakes in the company during the second quarter. Steven Cohen’s SAC Capital currently has the highest stake in Stryker after Healthcor (see other bullish stocks of Steven Cohen).

Since the end of the second quarter, Universal Health Services has been one of Healthcor’s biggest losses. UHS lost 28% since the end of June. Luckily, Healthcor was able to minimize losses as it reduced its stake in UHS by 11% during the second quarter. At the end of the second quarter, Healthcor had $124 million in UHS. Andreas Halvorsen had a comparatively higher stake of approximately $203 million at the end of June. Halvorsen’s Viking Global currently has the largest position in UHS among the 300+ funds we are tracking (check out Andreas Halvorsen’s latest stock picks).

Healthcor's best-performing stock picks were Humana, Allscripts, Baxter International, Covidien, Cardinal Health, and Cubist Pharmaceuticals. Overall, Healthcor’s long positions in its 13F portfolio underperformed the market since the end of June. Fortunately, its larger positions performed better than its smaller positions. That’s what we usually observe with hedge funds: They don’t put all their eggs in one basket, but they put more eggs in good baskets.

Source: Healthcor Management's Latest New And Increased Positions