Billionaire Investor Says These Five Healthcare Stocks Have a Lot of Upside Potential

Larry Robbins’ also mentioned several companies from the hospital industry, such as Tenet Healthcare Corp (NYSE:THC), Community Health Systems (NYSE:CYH), and HCA Holdings Inc (NYSE:HCA). Glenview’s largest stake in the industry is represented by Tenet Healthcare Corp (NYSE:THC), in which it held 14.79 million shares at the end of June, up by 7% on the quarter. Tenet Healthcare Corp (NYSE:THC)’s stock slumped by 36% during the third quarter and Robbins said that he was disappointed by the performance across all of his picks in the industry. The investor said that his team’s industry checks did not show any issues and did not provide any indications or causes for concern.

“[…] we find the hospital industry fundamentally attractive for its overall growth, basic service it provides, industry structure that promotes modest price increases, and the strong opportunities available for capital allocation,” the letter also said.

However, despite the large declines posted by Glenview’s hospital holdings, Robbins is of the mind that they were mainly caused by short-term concerns rather than weak fundamentals. Overall, Glenview’s positions in the hospital industry are trading at around 6.5x 2017 EBITDA and 9.x 2017 earnings and the investor remains bullish on the segment as companies have more opportunities for capital allocation.

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