10 Healthcare and Software Stocks to Buy According to Michel Massoud’s Melqart Asset Management

·6 min read

In this article, we take a look at the 10 healthcare and software stocks to buy according to Michel Massoud’s Melqart Asset Management. If you want to skip our discussion of Melqart Asset Management’s history, investment philosophy, and hedge fund preference, go directly to 5 Healthcare and Software Stocks to Buy According to Michel Massoud’s Melqart Asset Management.

Michel Massoud is the Chief Investment officer as well as the Chief Operations Officer at Melqart Asset Management. Mr. Massoud is responsible for leading a team of 11 investment professionals in the firm. Michel Massoud has more than twenty years of experience in investment banking firms such as Cheyne Capital and Morgan Stanley where he dealt with event-driven strategies. Moreover, he has both established and run multiple hedge funds before joining Melqart Asset Management.

Melqart Asset Management owns stocks in several well-known companies as of the end of the second quarter of 2021, including Amazon.com, Inc. (NASDAQ:AMZN), Facebook Inc (NASDAQ:FB), Dropbox, Inc. (NASDAQ:DBX), and Uber Technologies, Inc. (NYSE:UBER).

In this article, however, our focus would be on Melqart's healthcare and software stock picks.

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With this background, let us start our list of the healthcare and software stocks to buy according to Michel Massoud’s Melqart Asset Management. We used Massoud’s 13F portfolio as of the second quarter of the year 2021 for this analysis.

Photo by Jason Briscoe on Unsplash

10. Constellation Pharmaceuticals, Inc. (NASDAQ:CNST)

Melqart Asset Management’s Stake Value: $3.022 million

Percentage of Melqart Asset Management’s 13F Portfolio: 0.13%

Number of Hedge Fund Holders: 34

Constellation Pharmaceuticals, Inc. (NASDAQ: CNST) focuses on inventing and developing innovative treatments for patients with cancers related to abnormal gene expression. Based on the latest 13F holdings for the second quarter of 2021, Melqart Asset Management owns 89,400 shares in Constellation Pharmaceuticals, Inc. (NASDAQ: CNST) worth $3.022 million.

On June 16, MorphoSys AG (NASDAQ:MOR) announced its decision to acquire Constellation Pharmaceuticals, Inc. (NASDAQ: CNST) by purchasing all its outstanding shares for $34 each.

9. Qiagen NV (NASDAQ:QGEN)

Melqart Asset Management’s Stake Value: $6.386 million

Percentage of Melqart Asset Management’s 13F Portfolio: 0.28%

Number of Hedge Fund Holders: 22

Qiagen NV (NASDAQ: QGEN), headquartered in Hilden, Germany, develops technologies specifically for applied testing, molecular diagnostics, and academic and pharmaceutical research.

Melqart Asset Management owns 132,000 shares in Qiagen NV (NASDAQ: QGEN). This investment covers 0.28% of the fund’s portfolio and is worth over $6.3 million.

On October 14, Simon Baker, an analyst at Redburn, initiated the coverage of Qiagen NV (NASDAQ: QGEN) with a “BUY” rating.

At the end of the second quarter, there were 22 hedge funds in Insider Monkey’s database that held stakes in Qiagen NV (NASDAQ: QGEN). As of the end of Q2 of 2021, Israel Englander’s Millennium Management was the largest shareholder in the company. The fund held over 3.4 million shares which were worth over $169 million.

8. PPD, Inc. (NASDAQ:PPD)

Melqart Asset Management’s Stake Value: $35.849 million

Percentage of Melqart Asset Management’s 13F Portfolio: 1.61%

Number of Hedge Fund Holders: 37

Based in Wilmington, North Carolina, PPD, Inc. (NASDAQ: PPD) is a contract research organization that offers drug development and drug lifecycle management services.

DEVON Equity Management, a UK-based independent fund management company, mentioned PPD, Inc. (NASDAQ: PPD) in its second-quarter 2021 investor letter and discussed its stance on the firm. Here is what the fund said about PPD, Inc. in its Q2 2021 investor letter:

“…We expect the ~US$4bn of ‘excess’ free cash flow generated from COVID related business to be reinvested into high returning businesses with a more sustainable earnings profile. This is already evident in Thermo’s strong M&A activity YTD, culminating in the US$20bn acquisition of PPD (PPD US).

PPD is a top tier CRO (Contract Research Organisation) which has been in and out of private equity ownership in recent times. To oversimplify, CRO’s effectively provide ‘outsourced’ R&D services across the entire customer spectrum (from big pharma to early stage biotech). Their value proposition varies slightly be customer, but ultimately comes down to quality of drug discovery / development and accelerating time to market (i.e. ‘Return on R&D investment’). CROs must stack up well on this metric vs in-house R&D spend, otherwise Firms would simply keep the spend 100% internal.”

7. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)

Melqart Asset Management’s Stake Value: $37.615 million

Percentage of Melqart Asset Management’s 13F Portfolio: 1.68%

Number of Hedge Fund Holders: 44

BioMarin Pharmaceutical Inc. (NASDAQ: BMRN), founded in 1997 and headquartered in Novato, California, develops and commercializes novel biopharmaceuticals for rare genetic diseases.

The hedge fund chaired by Michel Massoud holds 450,800 shares in BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) currently worth over $37 million which represents 1.68% of its portfolio. In addition, Melqart Asset Management increased stakes in the firm by 38% during the second quarter of 2021. Julian Baker And Felix Baker’s Baker Bros. Advisors is the leading shareholder in BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) with over 7 million shares that were worth more than $633 million by the end of the second quarter of 2021.

On October 15, Cory Kasimov, an analyst at JPMorgan, kept an Overweight rating on BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) and set a price target of $129 on its stock.

ClearBridge Investments, an investment management firm, mentioned BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) in its first-quarter 2021 investor letter and shared its insights on the company. Here is what the fund said about BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) in its Q1 2021 investor letter:

“The Strategy closed out of five positions (including BioMarin). We sold BioMarin Pharmaceutical after a number of its clinical catalysts had played out.”

6. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)

Melqart Asset Management’s Stake Value: $56.079 million

Percentage of Melqart Asset Management’s 13F Portfolio: 2.51%

Number of Hedge Fund Holders: 60

Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) is a biopharmaceutical company that was founded in 1989 and is based in Boston, Massachusetts. The company conducts research and clinical trials to innovate in medicine.

Michel Massoud’s Melqart Asset Management holds 278,130 shares in Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) worth over $56 million, representing 2.51% of its portfolio. Jim Simons’ Renaissance Technologies holds the biggest stake in Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX), with over 2 million shares worth more than $459 million.

On September 9, Paul Matteis, an analyst at Stifel, downgraded Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) to "Hold" from its previous position of "Buy".

Harding Loevner, an investment management firm, published its “Global Equity Fund” second-quarter 2021 investor letter in which it mentioned Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX). Here is what the letter said in its Q2 2021 investor letter:

“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.”

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Disclosure: None. 10 Healthcare and Software Stocks to Buy According to Michel Massoud’s Melqart Asset Management is originally published on Insider Monkey.

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