" Merck is attractive on a standalone basis, and it's got really good portfolio characteristics," said the portfolio manager at Oakmark Funds, who bought shares in the third quarter. "We're heavy in financials, we're heavy in the durable names — our portfolio tends to have a little bit of a pro cyclical tilt to it and Merck helps offset some of that risk," Nygren said in an interview with CNBC.
The firm refrained from buying shares until they fell over the summer — Merck slid about 8% in the third quarter — and the valuation improved. Nygren pointed to Merck's existing drug portfolio as another reason for buying the name. An extension of its Keytruda franchise, a cancer treatment, could also bode well for shares. Beyond the big pharmaceutical name, Nygren is also finding value in some artificial intelligence implementers, in addition to mainstay megacap player Alphabet .