PGIM Jennison Health Sciences Fund released its second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund modestly underperformed the S&P 1500 Health Care Index in the quarter which declined 1.1%. Security selection within pharmaceuticals, MedTech, and health care provides & services contributed the most value during the quarter, while stock selection within Biotechnology was largely detracted. In addition, please check the fund’s top five holdings to know its best picks in 2024.
PGIM Jennison Health Sciences Fund highlighted stocks like AbbVie Inc. (NYSE:ABBV) in its Q2 2024 investor letter. AbbVie Inc. (NYSE:ABBV) discovers, develops, manufactures, and sells pharmaceuticals. The one-month return of AbbVie Inc. (NYSE:ABBV) was 2.05%, and its shares gained 33.48% of their value over the last 52 weeks. On October 2, 2024, AbbVie Inc. (NYSE:ABBV) stock closed at $196.82 per share with a market capitalization of $347.651 billion.
PGIM Jennison Health Sciences Fund stated the following regarding AbbVie Inc. (NYSE:ABBV) in its Q2 2024 investor letter:
“AbbVie Inc. (NYSE:ABBV) is a global pharmaceutical company with a commercial presence in four key therapeutic verticals: immunology, hematology/oncology, neuroscience, and aesthetics. AbbVie’s flagship product Humira is widely used across multiple immunology indications (totaling $21b in worldwide FY22 sales, or 37% of overall sales in the last year before biosimilar entry) but is declining steeply due to U.S. biosimilar entry in 2023. However, AbbVie’s successful development and launch of next-gen immunology drugs Skyrizi and Rinvoq should enable revenues and earnings to grow strongly from its trough earnings-per-share (EPS) in 2023, with Skyrizi and Rinvoq now expected to generate >$27B in sales by 2027, driving an HSD revenue compound annual growth rate (CAGR) from 2024 to 2029. Importantly, AbbVie faces limited patent cliffs through the end of the decade post-Humira. We turned more constructive on AbbVie stock in late 2023 due to these dynamics but decided to reduce exposure following the stock’s rapid run-up to start the year. This was driven by our expectation that faster-than-expected Humira erosion and one-off headwinds in 2025 will reduce growth to below consensus 2025 expectations. As a result, we were underweight AbbVie again by the time the market started reacting to the 2025 concerns, which were crystallized by management commentary on the 1Q earnings call. We have since exited our position.”
A pharmacist handing out a pharmaceutical drug to a patient in a drug store or chemist.
AbbVie Inc. (NYSE:ABBV) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held AbbVie Inc. (NYSE:ABBV) at the end of the second quarter which was 70 in the previous quarter. While we acknowledge the potential of AbbVie Inc. (NYSE:ABBV) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed AbbVie Inc. (NYSE:ABBV) and shared the list of best inexpensive stocks to invest in. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.