10 Pharmaceutical Stocks to Buy According to Lawrence Hawkins’ Prosight Capital

·8 min read

In this article, we discuss 10 pharmaceutical stocks to buy according to Lawrence Hawkins' Prosight Capital. If you want to skip our detailed analysis of Hawkins' history, investment philosophy, and hedge fund performance, go directly to the 5 Pharmaceutical Stocks to Buy According to Lawrence Hawkins' Prosight Capital.

Lawrence Hawkins, the managing partner of Dallas-based Prosight Capital, has had a successful career as an investor spanned over 18 years. The portfolio value of his hedge fund at the end of second quarter of 2021 was $159 million. The top ten holdings of the hedge fund comprised 54.86% of the portfolio. Hawkins has loaded up on pharmaceutical companies. His holdings are concentrated mostly in healthcare and services industries.

According to the latest security filings, the portfolio value of Prosight Capital increased by almost $37 million between March and June this year. The fund made new purchases in 17 stocks, bought additional stakes in 15 equities, sold out of 8 stocks, and reduced holdings in 14 stocks during the second quarter.

The pharmaceutical industry plays a very important role in research, discovery and development of new medicines. Some of the most famous pharmaceutical companies are Moderna, Inc. (NASDAQ:MRNA), Bristol-Myers Squibb Company (NYSE:BMY) and Pfizer Inc. (NYSE:PFE), among others.

Our Methodology

With this context in mind, here is our list of the 10 pharmaceutical stocks to buy according to Lawrence Hawkins' Prosight Capital. These were ranked according to the investment portfolio of Prosight Capital at the end of the second quarter of 2021. The list was compiled according to the value of each holding in the Prosight Capital portfolio.

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10. Zimmer Biomet Holdings, Inc. (NYSE:ZBH)

Prosight Capital Stake Value: $5 million

Percentage of Prosight Capital’s 13F Portfolio: 3.16%

No. of Hedge Fund Holders: 48

Ranked tenth on the list of 10 pharmaceutical stocks to buy according to Lawrence Hawkins' Prosight Capital is Zimmer Biomet Holdings, Inc. (NYSE:ZBH). It is a medical device company with a market cap of $3 billion. The company makes orthopedic, dental and spinal reconstructive implants and related surgical equipment.

According to latest 13F fillings, Hawkins' Prosight Capital owns 31,500 shares worth $5 million in Zimmer Biomet Holdings, Inc. (NYSE:ZBH). This represents 3.16% of Prosight Capital’s holdings. At the end of the second quarter of 2021, 48 hedge funds in the database of Insider Monkey held stakes worth $1.8 billion in Zimmer Biomet Holdings, Inc. (NYSE:ZBH), down from 50 in the previous quarter worth $2 billion.

On October 1, investment advisory Citi kept a Buy rating on Zimmer Biomet Holdings, Inc. (NYSE:ZBH) stock and lowered its price target to $188 from $200.

In the second quarter of 2021, Zimmer Biomet Holdings, Inc. (NYSE:ZBH) reported an EPS of $1.90, surpassing estimates by $0.04. The company’s revenue in the second fiscal quarter came in at $2.03 billion, an increase of 65% year over year, and beat revenue estimates by $50 million.

9. Zogenix, Inc. (NASDAQ:ZGNX)

Prosight Capital Stake Value: $5.3 million

Percentage of Prosight Capital’s 13F Portfolio: 3.3%

No. of Hedge Fund Holders: 28

Zogenix, Inc. (NASDAQ:ZGNX), headquartered in Emeryville, California, develops therapeutic solutions to provide treatment for diseases associated with the central nervous system. The company ranks ninth on the list of 10 pharmaceutical stocks to buy according to Lawrence Hawkins' Prosight Capital.

In the second quarter of 2021, Zogenix, Inc. (NASDAQ:ZGNX) reported an EPS of -$1.05, missing estimates by $0.12. The company’s revenue in the second quarter came in at $18.79 million, an increase of 1724.3% year over year, and beat revenue estimates by $2.19 million.

On September 9, UBS initiated coverage of Zogenix, Inc. (NASDAQ:ZGNX) stock with a Buy rating and a price target of $23, adding that it expects the company to generate more sales momentum.

Our data shows that RA Capital Management is one of the leading shareholders in Zogenix, Inc. (NASDAQ:ZGNX) with more than 5 million shares worth $91 million.

At the end of the second quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $345.7 million in Zogenix, Inc. (NASDAQ: ZGNX), up from 21 in the previous quarter worth $377.4 million.

Just like Moderna, Inc. (NASDAQ:MRNA), Bristol-Myers Squibb Company (NYSE:BMY) and Pfizer Inc. (NYSE:PFE), Zogenix, Inc. (NASDAQ:ZGNX) is also one of the top stocks to invest in.

8. Exicure, Inc. (NASDAQ:XCUR)

Prosight Capital Stake Value: $5.4 million

Percentage of Prosight Capital’s 13F Portfolio: 3.37%

No. of Hedge Fund Holders: 10

Ranked eighth on the list of 10 pharmaceutical stocks to buy according to Lawrence Hawkins' Prosight Capital is Exicure, Inc. (NASDAQ:XCUR). The company develops, based on its Spherical Nucleic Acid (SNA) technology, therapies for immuno-oncology and genetic diseases. Hawkins' Prosight Capital increased its stake in Exicure, Inc. (NASDAQ:XCUR) by 1206% in the second quarter of 2021 as compared to the first quarter.

In the second quarter of 2021, Exicure, Inc. (NASDAQ:XCUR) reported an EPS of -$0.16, missing estimates by $0.02. The company’s revenue in the second fiscal quarter came in at $0.08 million and missed revenue estimates by $1.36 million. Out of the hedge funds being tracked by Insider Monkey, Tybourne Capital Management is one of the biggest stakeholders in Exicure, Inc. (NASDAQ: XCUR) with more than 7 million shares worth $11 million.

Like Moderna, Inc. (NASDAQ:MRNA), Bristol-Myers Squibb Company (NYSE:BMY) and Pfizer Inc. (NYSE:PFE), Exicure, Inc. (NASDAQ:XCUR) is one of the notable pharma stocks.

7. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)

Prosight Capital Stake Value: $5.5 million

Percentage of Prosight Capital’s 13F Portfolio: 3.41%

No. of Hedge Fund Holders: 60

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), headquartered in Boston, Massachusetts, ranks seventh on the list of 10 pharmaceutical stocks to buy according to Lawrence Hawkins' Prosight Capital. It has a market cap of $46.6 billion. The company develops therapies for the treatment of cystic fibrosis, infectious diseases, autoimmune diseases and neurological disorders.

Based on latest 13F fillings, Hawkins' Prosight Capital owns 27,100 shares worth $5.5 million in Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), which makes up 3.41% of Hawkins’ 13F portfolio. At the end of the second quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $2.8 billion in Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), down from 68 the preceding quarter worth $3.7 billion.

According to second fiscal quarter results Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) reported an EPS of $3.11, surpassing analyst estimates by $0.75. The company’s revenue in the second fiscal quarter came in at $1.79 billion, an increase of 17.8% year over year, and beat revenue estimates by $60 million.

On September 9, Stifel downgraded Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) stock to Hold from Buy rating and decreased its price target to $213 from $244.

In its Q2 2021 investor letter, Harding Loevner, an investment management firm, mentioned that Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is one of largest detractors from relative performance: Here is what the fund said:

"Among the largest detractors from relative performance (includes) Vertex Pharmaceuticals. Vertex fell after the company halted development of one of its drug candidates undergoing Phase 2 trials. The failure leaving some investors wondering if Vertex’s much-heralded research capabilities might not extend beyond its core franchise in cystic fibrosis, a view we respectfully reject."

6. Kezar Life Sciences, Inc. (NASDAQ:KZR)

Prosight Capital Stake Value: $5.6 million

Percentage of Prosight Capital’s 13F Portfolio: 3.47%

No. of Hedge Fund Holders: 12

Our data show that Logos Capital is one of the biggest stakeholders in Kezar Life Sciences, Inc. (NASDAQ:KZR) with more that 2 million shares worth $12.5 million. At the end of the second quarter of 2021, 12 hedge funds in the database of Insider Monkey held stakes worth $46.4 million in Kezar Life Sciences, Inc. (NASDAQ:KZR), down from 13 the preceding quarter worth $37.4 million.

On September 20, investment advisory Jones Trading initiated coverage of Kezar Life Sciences, Inc. (NASDAQ:KZR) stock with a Buy rating and a price target of $14.

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Disclosure. None. 10 Pharmaceutical Stocks to Buy According to Lawrence Hawkins' Prosight Capital is originally published on Insider Monkey.

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