Many leading funds, including Wellington, BlackRock, Morgan Stanley and healthcare-focused Healthcor Group, filed forms 13-D and 13-G with the SEC over the last month, indicating that they had amended their ownership in U.S. exchange traded consumer and healthcare sector companies. The following summarizes five noteworthy buys and two noteworthy sells in the tech sector over the past month (in addition to prior articles summarizing 13D/G activity in the biotech group and the tech sector). Also, for more info on Forms 13-D and 13-G, and how to interpret them, please refer to our instablog discussion on institutional trades:
Express Scripts Inc. (ESRX): ESRX is a provider of pharmacy benefit management services in North America, to managed care organizations, employers, insurers and administrators. Last week on Monday, mega fund Morgan Stanley, with $186 billion in 13-F assets, filed SEC Form SC 13G/A indicated that it holds 4.09 million or 0.8% of outstanding shares, almost selling out completely out of its 36.76 million share position that it held at the end of Q1.
In its latest Q1 (March), the company beat analyst revenue estimates but missed earnings estimates (73c v/s 77c), while guiding FY earnings in-line. Its shares after a multi-year run-up are back up to within striking distance of its all-time $60 highs from May of last year, trading at 13-14 forward P/E and 10.1 P/B compared to averages of 15.9 and 3.1 for its peers in the medical services group. Earnings that have also been in a multi-year ramp are expected to continue their growth trajectory, with analyst expectations of a strong 21.4% annual growth rate from $2.96 in 2011 to $4.36 in 2013, mostly based on the projected synergies from the recent acquisition of Medco Health.
In addition to ESRX, institutions also indicated via their 13D/G filings over the last month that they decreased their ownership in Southwest Airlines Co. (LUV), which provides predominantly short-haul, high-frequency, point-to-point, low-fare domestic airline service to 69 cities in 35 states. Blackrock Inc., the world's largest and most prominent asset manager, with over $3.5 trillion in assets under management, filed SEC Form SC 13G/A indicating that it holds 34.00 million or 4.4% of outstanding shares, a decrease from the 40.4 million shares it reported holding at the end of Q1.
On top of these, institutional investors also indicated via their 13D/G filings over the past month that they increased their positions in the following consumer and healthcare sector companies:
- WellCare Health Plans (WCG), a provider of managed care services for government-sponsored health care programs in the U.S., in which billionaire star fund manager Stephen Cohen's hedge fund SAC Capital Advisors, with over $15.7 billion in 13-F assets, filed SEC Form SC 13G indicating that it holds 2.16 million or 5.0% of outstanding shares, an increase from the 1.05 million shares it reported holding at the end of Q1.
- Allscripts Healthcare Solutions (MDRX), that is a provider of clinical, connectivity and patient information software applications for healthcare providers, in which New York-based Healthcor Group, with $2.55 billion in 13-F assets, and investing primarily in later-stage developmental and growing mid-sized companies in the healthcare sector, filed SEC Form SC 13D/A indicating that it holds 12.50 million or 7.3% of outstanding shares, an increase from the 7.20 million shares it reported holding at the end of Q1.
- Lululemon Athletica (LULU), an operator and franchiser of yoga inspired athletic apparel stores for women, men and female youth in North America and Australia, in which Jennison Associates, with $150 billion in assets under management, filed SEC Form SC 13G/A indicating that it holds 12.07 million or 10.8% of outstanding shares, an increase from the 9.68 million shares it reported holding at the end of Q1.
- KB Home (KBH), a builder of single-family attached and detached homes, townhomes and condominiums in nine states across the U.S., in which BlackRock Inc. filed SEC Form SC 13G/A indicating that it holds 8.12 million or 10.5% of outstanding shares, an increase from the 7.23 million shares it reported holding at the end of Q1.
- Health Management Association (HMA), that is an operator of acute care hospitals, primarily in non-urban communities in the southern U.S., in which mega fund Wellington Management, one of the largest private independent investment management companies in the world, with $634 billion in assets under management, filed SEC Form SC 13G/A indicating that it holds 26.13 million or 10.2% of outstanding shares, an increase from the 24.09 million shares it reported holding at the end of Q1.
Credit: Fundamental data in this article and company descriptions are based on SEC filings, Zacks Investment Research, Yahoo, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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