Hedge funds are rotating into Visa and several health care names in the market turmoil
Hedge funds have been quietly adding positions in Visa and a few health care stocks that are beating the market amid heightened volatility. Data firm InsiderScore looked at the top holdings of “fundamental” hedge funds, those with 10 to 300 positions and aggregate assets of $100 million or more. Its universe encompasses 600 hedge funds with total disclosed equity holdings of approximately $756 billion. The firm found stocks that most frequently appear among the largest 10 holdings of these hedge funds and where the fund was buying shares last quarter. “There was a definitely a theme in Q2’22 as fundamental hedge funds rotated some dollars out of big Technology into other payment processing and Healthcare,” analysts at InsiderScore said in a note. Visa was the standout stock that became well loved by hedge funds. Soroban Capital Partners, which is one of the 25 largest hedge funds by equity position according to FactSet, raised its bet on Visa by 75%, bringing its stake in the payments company to more than $700 million at the end of June. Visa, which is down about 6% this year, is still outperforming the broader market. KBW analyst Sanjay Sakhrani recently said Visa is a “a strong investment opportunity for investors as the company’s fundamentals exhibit both offensive and defensive attributes.” Biohaven Pharmaceutical , Eli Lilly and Thermo Fisher Scientific were popular health care names in the second quarter. Notably, Lone Pine scooped up more than 400,000 additional shares of Thermo Fisher in the second quarter. Shares of migraine pill maker Biohaven Pharmaceutical have gained 8% this year after Pfizer said it will acquire the company for $11.6 billion. The deal, Pfizer’s largest since 2016, beefs up its portfolio ahead of patent losses on some cancer drugs. Warner Bros. Discovery , created by the merger between Warner Media and Discovery, garnered attention from big name hedge funds as well. Seth Klarman’s Baupost Group bought more than $240 million worth of the media company, making the bet his 10th biggest holding at the end of June. The media giant, under new CEO David Zaslav , is putting more emphasis on theatrical releases and traditional linear TV to differentiate itself from an increasingly competitive industry.