Healthcare stocks are attracting the big-money crowd, a sign that serious investors think there's money to be made in the sector, according to one tracker of where billionaires invest.
A New York City-based investment analytics company named iBillionaire created the iBillionaire Index in November 2013. The index tracks and updates where the world's billionaire investors like Warren Buffett and Carl Icahn are putting their money.
Healthcare companies became a much more popular investment during the third quarter of this year, the index shows. Six of the 30 companies on the iBillionaire Index at the end of Q3 (PDF) were related to the industry: pharmaceutical giants AbbVie and Actavis, health insurers Aetna and Humana, hospital chain Tenet Healthcare Corp. and biotech company Thermo Fisher Scientific.
That was up from four healthcare companies in the second quarter of this year. Each of those six healthcare stocks, except for AbbVie, is in the portfolio of Glenview Capital Management, the hedge fund of billionaire Larry Robbins. Robbins has a big presence in the healthcare space, holding shares in HCA, Community Health Systems, WellPoint and a handful of others.
The stocks of those six healthcare organizations are all up significantly in 2014. Actavis, which is in the process of acquiring Botox-maker Allergan for $66 billion, is up the most, trading 61% higher on the year at more than $270 a share.
Fourteen companies exited the index in the third quarter. Only two were healthcare-related: Cigna Corp. and McKesson Corp.
Where else do billionaires see promise? Consumer conglomerates such as CBS Corp. and General Motors and, of course, tech powerhouses such as Apple and Facebook.
Follow Bob Herman on Twitter: @MHbherman
