A number of hedge funds have made notable investments in medical products and services in the past two years—some, though, have pulled back from other investment areas.
The interest in biotech research, in particular—which involves manipulating biological processes and living organisms at a molecular level; and has been forecast to experience a compound annual growth rate of 11.8% through 2033—seems to be strong.
Companies such as Cytokinetics Incorporated have been a focus for a number of funds, including global value-oriented and event-driven hedge fund Armistice Capital and Marshall Wace LLP. Cytokinetics, a late-stage biopharmaceutical organization, is investigating ways to treat impaired muscle function-related cardiovascular and neuromuscular diseases.
Armistice Capital and the British Marshall Wace fund have also invested in entities such as Novo Nordisk, which manufacturers the semaglutide Type 2 diabetes drug Ozempic, and global medical device company AngioDynamics [EB1], according to Nasdaq.
Like other hedge funds, Armistice has also reduced its investment in some non-medically oriented entities.
Last summer, for instance, an article shared on Medium mentioned that Armistice Capital maintains position and portfolio-level hedges to mitigate risk—and had sold the majority of its shares of Lululemon Athletica Inc., reducing its holdings by more than 88% in the fourth quarter of 2022.
Lululemon, which was founded in 1998 and is headquartered in Canada, provides technical athletic apparel, footwear, and accessories.
Although Armistice didn't appear [EB2] to comment publicly on the sale, the article noted that Lululemon's stock performance and financial analysts' perspectives on the company's future performance at the time might have been a factor.
Other hedge funds have also changed their holdings in recent years. Investment management company Artisan Partners, for instance, in the 2023 fourth quarter investor letter for its Artisan Mid Cap Fund, also said it had sold shares of Lululemon, according to Yahoo Finance.
The apparel provider may garner more interest [EB3] in the future, however. After the company's most recent first-quarter earnings report was released in early June, Morningstar noted that Lululemon's 10% sales growth had met the publication's expectations, and its operating margin was actually higher than anticipated.
Other Concentrations
Media and entertainment offerings have also proven popular with some investors.
On the heels of a 13% rise in sponsorship and 36% increase in revenue in 2023, for example, Live Nation Entertainment—which operates and manages event-based ticket sales—garnered interest from wealth management service provider Cary Street Partners Investment Advisory LLC and investment management firm Creative Financial Designs [EB4] Inc., who added shares of the company in the fourth quarter, according to MarketBeat.
Live Nation event attendance is up 21%, and revenue grew 21% year-over-year in the first quarter. President and CEO Michael Rapino said in a statement that the corporation is on track to have another record year, according to Variety.
MarketBeat reported in early June that investors such as independent investment management firm Wellington Management Group LLP, global investment management firm Invesco Ltd., and Armistice Capital had increased their stake in Wyndham Hotels & Resorts, Inc.
Armistice Capital made a $9.65 million investment in the chain in the fourth quarter of 2023, acquiring 120,000 shares of the company's stock, which are valued at approximately $9,649,000.
The fund, along with Sessa Capital [EB5], Third Point, and others, also owns shares of streaming player and service provider Roku—which, in a competitive market, managed to achieve an 11% year-over-year total net revenue increase and 6% gross profit growth in 2023, according to Yahoo Finance.
In a February letter to shareholders, Founder and CEO Anthony Wood and CFO Dan Jedda said Roku plans to focus on further innovation and growth in 2024.
Armistice Capital's other entertainment-related holdings include Paramount Global. As of the company's May 2024 Form 13F filing with the Securities & Exchange Commission, Armistice owned 967,308 shares of the media and entertainment organization.
