left his Vanguard Health Fund at the end of 2012 after an
illustrious career. The $23.1 billion fund has returned 16.46% on
average annually since inception in 1984, outdoing its benchmark
Spliced Health Care Index benchmark's 10.71% and every other U.S.
equity mutual fund, according to Bloomberg. Jean M. Hynes, CFA, a
Wellington senior vice president, partner and global industry
analyst with the firm since 2008, succeeds him in leading the
fund. In the fourth quarter, Owens' last at the fund, he bought
no new stocks but added to preexisting holdings. His largest
increases were: Agilent Technologies (
), Allscripts-Misys Healthcare Solutions (
) and Teva Pharmaceuticals Ltd. (
Agilent Technologies (
Agilent Technologies was Owens' sole stock pick in the third
quarter of 2012. He purchased 500,000 shares for $38 a share on
average. Then, in the fourth quarter, he increased that by
800,000 shares at the same price on average. The size of his
total holding at year end was 1.3 million shares.
Rather than a strictly health care company, Agilent develops
measurement technology used in chemical analysis, life sciences,
diagnostics and genomics and electronic measurement. It has a
$15.7 billion market cap and its share price is virtually flat
from a year ago, after sinking to its 52-week low in the fourth
The company has experienced notable average annual growth in the
past five years: Revenue increased at 8.5%, EBITDA increased at
30.3%, free cash flow increased at 28.4% and book value increased
Compared to the fiscal fourth quarter ended Oct. 31, 2011, the
company reported a 2% increase in revenues to $1.77 billion in
the fiscal fourth quarter of 2012. GAAP net income increased to
$425 million, or $1.20 per share, from $289 million, or $0.82 per
share the previous year, exceeding guidance.
Each of Agilent's four divisions experienced revenue declines or
were flat over the previous year, except for diagnostics and
genomics, whose revenues increased 125% primarily due to the
acquisition of Dako.
The company on Jan. 17 introduced a new $500 million share
repurchase authorization and raised its dividend 20%, from $0.10
to $0.12 per share, beginning in the second quarter of 2013.
Allscripts-Misys Healthcare Solutions (
Owens bought 2,439,400 shares of Allscripts-Misys Healthcare
Solutions in the second quarter at $12 per share on average, then
added 1,347,609 shares for the same average price in the fourth
quarter. In total he owns 3,787,009 shares.
Allscripts offers a portfolio of information technology for
health care markets such as hospitals, physician practices and
post-acute organizations. It has a $1.8 billion market cap and
its stock dived 48% over the last year.
Allscript's market value deflated by approximately half in the
second quarter of 2012, when Owens found the company attractive
enough for his portfolio.
In the past five years, the company grew at the following average
annual rates: 14.8% for revenue, 19.7% for EBITDA, 82.8% for free
cash flow and 27.5% for book value.
Revenue in the third quarter ended Sept. 30, 2012, of $360.7
million fell short of the third quarter of 2011's $363.7 million
in revenue. Net income of $9.2 million, or $0.05 per share, was
also less than the $19.1 million, or $0.10 per share, profit it
earned the previous year.
Several third parties have expressed interest in the company, and
it is "evaluating strategic alternatives" it said in its third
quarter earnings release. It did not guarantee that any
transaction would occur and chose not to comment further unless
its board did approve a specific transaction.
Allscripts has a 42.6 P/E ratio, 1.4 P/B ratio and 1.3 P/S ratio.
Teva Pharmaceuticals Ltd. (
Owens has been buying shares of Teva Phamaceuticals since the
second quarter of 2011. After adding 1,271,100 shares in the
fourth quarter for $40 per share on average, his total holding
amounts to 10,021,100 shares.
Israel-based Teva is involved in the development, production and
marketing of generic and branded pharmaceuticals and active
pharmaceutical ingredients. It has a $32.76 billion market cap
and its stock in the past year dropped 17%.
Robust average annual growth rates for the company over the past
five years are: 13.6% for revenue, 14.7% for EBITDA, 17.8% for
free cash flow and 8.6% for book value.
Revenue increased 14% year over year to $5 billion in the third
quarter of 2012, from $4.3 billion. Net loss totaled $79 million,
or $0.09 per share, compared to net income of $916 million, or
$1.03 per share, in the third quarter of 2011. The loss stemmed
from two major charges - one for pending patent litigation, and
impairment, primarily for research and development.
Teva has a 15.6 P/E ratio, 1.4 P/B ratio and 1.6 P/S ratio.
To see more of
' fourth quarter moves,
see his portfolio here
. Also check out the
top growth companies and high yield stocks of Edward Owens.About
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