Kris Jenner
T. Rowe Price Health Sciences
Ticker: (GILD, Fortune 500)
Sector pick: Health care
Kris Jenner, a former doctor, has operated the white-hot T. Rowe Price Health Sciences Fund (PRHSX) since 2000. With $4.9 billion in assets, it has delivered an annualized 13.6% gain for the past decade, drubbing its peers' 9.0%. Jenner's prescription: shares of biotech giant Gilead Sciences, one of his fund's largest positions. Gilead made its mark with a once-a-day HIV pill, and Jenner thinks it can repeat that success with a new treatment for hepatitis C. Known as sofosbuvir, it has a higher cure rate with less toxicity than interferon, the standard treatment, he says.
The market is huge: More than 4 million people have hepatitis C in the U.S. "The hepatitis C market will be in excess of $10 billion," says Jenner, "and we are at the dawn of that market." He believes Gilead's revenue could rise 16% a year through 2016, with earnings per share soaring 27% annually. At a recent $75, the shares aren't cheap -- they're up 84% since the beginning of 2012 and trade at 20 times this year's consensus forecast. Jenner advises waiting for a pullback before buying. But be patient. "In its peer group," he says, "it's going to be unrivaled in terms of its revenues and earnings growth."
--A.F.
Beware of munis priced at bubble levels. They'll always pop in the end.
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