Billionaire Larry Robbins’ Top 10 Stock Picks
In this article, we presented billionaire Larry Robbins' top 10 stock picks. Click to skip ahead and see Billionaire Larry Robbins' Top 5 Stock Picks.
Billionaire Larry Robbins, 51, has been facing tough times as his Glenview Capital Management hedge fund's 13F portfolio has seen its value decline by $22 billion in the past five years. Its 13F portfolio value hit an all-time high of over $25 billion in the second quarter of 2015 amid its famous Obamacare bets.
The middle-aged billionaire Mr. Robbins was among the hedge fund managers who believe the U.S. health-care system is likely to undergo big changes. The healthcare-focused hedge fund's 13F stock portfolio value fell sharply in 2015 and the fund extended the declining trend into 2016. Glenview Capital Management stock portfolio rebounded in 2017 by 23.4% but 2018 was again a hard year for Larry Robbins' hedge fund.
The 13F portfolio value of Larry Robbins Glenview Capital Management stood around $3.18 billion at the end of the latest quarter.
Larry Robbins of Glenview Capital
Larry Robbins has been aggressively working on stock portfolio adjustments to improve the returns. He has slashed its position in 27 stocks during the September quarter and sold out his stake in 6 stocks. The hedge fund has bought only 7 stocks in the latest quarter and added to 9 existing positions.
Founded in 2000, Glenview Capital Management seeks to generate absolute returns by focusing on fundamental research. In an investor letter, Robbins highlighted his investment philosophy as follows:
"We remain focused on finding "convertible equities" with positive value creation optionality, and we continue to encourage our companies to capitalize on this historically low rate environment to access long-term, semi-permanent debt capital to reinvest in capex, M&A and share repurchase."
Besides healthcare stocks, billionaire Larry Robbins has also been picking few stocks from tech, finance, communications, consumer discretionary, and materials industries. However, these stocks hold a small space in Glenview’s portfolio.
While Larry Robbins' reputation remains intact, the same can’t be said of the hedge fund industry as a whole, as its reputation has been tarnished in the last decade during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 78 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let’s start examining billionaire Larry Robbins' top 10 stock picks to see how he has adjusted the stock portfolio to beat the market trends. The top ten picks of Glenview Capital Management represents 67% of the overall portfolio.
10. ViacomCBS Inc. (NYSE:VIAC)
The media and entertainment company ViacomCBS Inc. (NYSE: VIAC) is the tenth-largest stock holding of billionaire Larry Robbins’ stock portfolio.
It is one of the long-running investments of Glenview Capital. The hedge fund first initiated a stake in ViacomCBS in 2013. The firm has sold 40% of its stake in the latest quarter to capitalize on the recent price gains. The hedge fund currently holds 3.4 million shares of ViacomCBS valued at around $96.34 million, accounting for 2.80% of the overall portfolio.
Shares of the media and entertainment company soared 48% in the last six months. Despite that, ViacomCBS shares are down 25% in the past five years. On the positive side, ViacomCBS offers a healthy dividend yield of 2.75%. The company has generated quarterly revenue of $6.11 billion in the latest quarter, down 8.8% from the past year period. NZS Capital saw the recovery in VIAC shares coming. Here is what they said in their Q2 investor letter:
“Among the detractors were media companies Viacom and Disney, which underperformed due to their advertising exposure, and, in the case of Disney, theme park shutdowns. We view these pressures as short term in nature and continue to own these investments.”
9. Hologic, Inc. (NASDAQ: HOLX)
The manufacturer of diagnostics products Hologic, Inc. (NASDAQ: HOLX) is among the favorite stocks of billionaire Larry Robbins' portfolio. Despite selling a 25% stake in the latest quarter, Hologic is the ninth-largest stock holding of the hedge fund’s portfolio. The HOLX stake currently accounts for 2.80% of the overall portfolio.
Shares of Hologic rallied 43% in the last twelve months, thanks to robust revenue growth from coronavirus testing. Its shares are up 95% in the last five years.
Hologic was in 50 hedge funds’ portfolios at the end of the third quarter of 2020 compared to the previous all-time high of 46. Hologic has generated revenue of $1.35 billion in the latest quarter, up 55.58% from the past year period.
“We capped off an unprecedented fiscal year with remarkable financial results in our fourth quarter,” said Steve MacMillan, Hologic’s Chairman, President and Chief Executive Officer. “These results were driven by the tireless efforts of our Diagnostics, European and supply chain teams to provide COVID-19 tests, and by steady improvement in our other businesses compared to the June quarter.”
8. Laboratory Corporation of America Holdings (NYSE: LH)
Clinical laboratory operator Laboratory Corporation of America Holdings (NYSE: LH) is among the newcomers in Larry Robbins' portfolio. The hedge fund first initiated a position in a clinical laboratory operator during the second quarter of this year. The hedge fund has sold 4% of its stake in the latest quarter to capitalize on share price gains.
Shares of Laboratory Corporation of America Holdings grew 23% in the last six months.
Hedge funds look bullish on the fundamentals of Clinical laboratory operators. Laboratory Corp. of America Holdings was in 57 hedge funds’ portfolios at the end of the third quarter of 2020 compared to 53 in the previous quarter. The investors have been showing confidence in their revenue growth trends. The company has generated 44% year over year revenue growth in the latest quarter while earnings jumped 219% from the past year period.
7. DXC Technology Company (NYSE: DXC)
The information technology giant DXC Technology Company (NYSE: DXC) is among the long-running stock investments of Larry Robbins’ stock portfolio. The hedge fund first created a position in DXC in 2015. It currently accounts for 5.31% of the overall portfolio valued at $182 million.
Shares of DXC Technology underperformed this year despite a strong broader market rally. Its shares fell 39% in the last twelve months.
It is not the favorite stock pick among hedge funds. DXC Technology Company was in 37 hedge funds’ portfolios at the end of September compared to an all-time high of 60.
Miller Value Partners, which has generated returns in excess of 50% in the second quarter, commented about DXC Technology Company in the shareholder's letter. Here’s what Miller Value Partners stated:
“Finally, I’d like to highlight a holding that we’ve been recently scaling higher, DXC Technology (DXC), a combination of CSC and the Enterprise Service business of Hewlett Packard Enterprise. We are very familiar with the business, having owned both companies at different points in time over the past 15 years. DXC Technology is a Global IT services company that is focused on helping clients with their mission-critical system and leading digital transformation. While the Technology sector has been a market favorite over the past couple of years, DXC has been far from that. The stock price has been under significant pressure, down more than 80% from its post-merger highs as the company ran into integration challenges.”
6. McKesson Corporation (NYSE: MCK)
Pharmaceuticals and medical supplier McKesson Corporation (NYSE: MCK) continues gaining billionaire Larry Robbins’ confidence.
The hedge fund has added to its existing McKesson Corporation position in the latest quarter. It is the sixth-largest stock holding of Glenview Capital Management stock portfolio, according to the latest fillings. The hedge fund first initiated a position in Pharmaceuticals and medical suppliers in 2016.
Shares of McKesson Corporation soared 23% this year. Despite the latest gains, its shares are down 13% in the last five years.
Hedge funds are less optimistic about McKesson's performance. McKesson Corporation was in 54 hedge funds’ portfolios at the end of the third quarter of 2020 compared to the all-time high of 68.
Broyhill Asset Management has recently commented about McKesson in the shareholders' letter. Here is what Broyhill Asset Management stated:
“As discussed in our year-end letter, shares of McKesson (MCK) have been under pressure because overly pessimistic investors focused on the company’s potential opioid liabilities as well as rising political uncertainty. These risks have certainly not disappeared, but continued earnings growth and free cash flow generation have been enough to convince investors that the sky is not falling, sending shares 22% higher, year to date. Since healthcare stocks are currently trading at historically depressed multiples of depressed earnings, our investments in the industry are already discounting an extremely negative future. As such, any outcome that falls short of a worst-case scenario should drive valuations meaningfully higher.”
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Disclosure: No position. The article billionaire Larry Robbins' top 10 stock picks is originally published on Insider Monkey.