US super investors hold £1.4bn worth of this high-flying FTSE 100 stock, according to financial filings.
AstraZeneca (LSE:AZN), a pharma and biotech company, is one of the most popular UK shares for stock market gurus from across the pond.
It’s no surprise considering the stock is second only to Shell in the FTSE 100 index by market cap.
And US investors in charge of multi-billion dollar funds are taking notice of the Anglo-Swedish pharma king.
Who are these super investors? And how have their investments been faring so far?
A hard pill to swallow
Ken Fisher, founder of Fisher Investments, has beaten the return of the S&P 500 index by an average of 4.2% per year over the last two decades.
The skilled stock picker held $1.18bn worth of AstraZeneca shares at the date of his most recent filing. Since his first purchase in 2015, he’s made a net return of 40%.
| Super investor | Ken Fisher | Jim Simons | Steven Cohen | Ray Dalio | Ken Griffin | Mario Gabelli |
| Earliest purchase | 2015 | 2013 | 2014 | 2021 | 2013 | 2001 |
| Holdings current value | $1,180m | $324m | $109m | $3.9m | $0.729m | $0.568m |
| Netted | 40% | 3.6% | -16% | -0.2% | 37% | -5% |
However, this isn’t actually that impressive given the S&P 500 returned 44% over the last five years.
Many of the super investors on the list have even made a loss through holding AstraZeneca stock.
Steven Cohen – who founded the hedge fund Point72 Asset Management – has suffered a 16% loss on his AstraZeneca shares. The investor, who’s also the owner of the New York Mets baseball team, started dealing in AstraZeneca shares in 2014 and currently holds $109m worth.
So should I add AstraZeneca to my portfolio despite these disappointing results?
Pipeline’s looking fine
A major risk for AstraZeneca investors comes in the potential for drug development projects being frustrated by unforeseen obstacles. At the same time, existing products are only protected by patents for a set period. Pharma companies are constantly in a race to get patented products approved to replace those that are expiring.
But given AstraZeneca has a pipeline of 184 projects in development, I believe it could be less exposed to this risk than comparable companies. Pfizer’s pipeline, for example, comprises only 104 projects in development.
The company is also globally diversified. Its Q2 report, for example, shows 36% of revenue came from the US, 30% from emerging markets and 20% from Europe.
Healthcare also tends to stand up well to inflation and recession, the two spectres hanging over investors in 2022. In the words of Confucius: “A healthy man wants a thousand things; a sick man wants one”. That one thing could be an AstraZeneca drug.
However, at a forward price-to-earnings (P/E) ratio of 14, the stock looks expensive compared to peers Merck (with a P/E of 12) and Pfizer (with a P/E of 8). On the other hand, Moderna’s P/E ratio is higher at 21.
I can’t see compelling investment case for my portfolio today. I do want to invest in healthcare, but lack any special insights into pharma technology, so I’d prefer to insulate myself from individual company risks by buying a healthcare ETF.
