Larry Robbins’ flagship fund Glenview Capital has been outperforming many of its peers, and the S&P 500 (INDEXSP:.INX) –which gained 6.05% in the first half of 2014, with his Glenview Opportunity funds having returned 10.11% in the second quarter, and 18% in the first six months of the year. Let’s take a look at some of its best performing stock positions –amongst his top picks, in order to better understand where the aforementioned growth is coming from.
When analyzing Glenview’s returns, one thing stands out: all of his top 9 equity holdings have inched over the first half of the year.
The fund’s largest bet (according to its latest 13F filing; for the first quarter of 2014) is placed on Thermo Fisher Scientific Inc. (NYSE:TMO), a $50 billion market cap healthcare company that operates in three segments: Analytical Technologies, Specialty Diagnostics and Laboratory Products and Services. The fund owns more than 9.5 million shares, worth more than $1.1 billion. This position comprises more than 7.5% of the fund’s total equity portfolio, so one can understand why Glenview has largely benefited from the 5.97% increase in Thermo Fisher Scientific Inc. (NYSE:TMO)’s stock price that has taken place in the first half of 2014. In addition, the stock pays a quarterly dividend of $0.15 per share.
Another fund that has been making big profits from Thermo Fisher Scientific Inc. (NYSE:TMO) is Andreas Halvorsen’s Viking Global, which last disclosed ownership of 9.66 million shares of the company.
Amongst Mr. Robbins’ top picks, another one that has been widely outperforming the S&P 500 index is Flextronics International Ltd. (NASDAQ:FLEX), a $6.5 billion market cap provider of advanced design, manufacturing and services for original equipment manufacturers (OEMs) of electronic products. The stock inched 42.47% between January and June, generating big profits for Glenview, which last declared ownership of 70.13 million shares, up from the 60.18 million disclosed by the end of the first quarter of 2014.
Other hedge funds capitalizing on Flextronics International Ltd. (NASDAQ:FLEX)’s stock price growth are Thomas E. Claugus’ GMT Capital, which owns 11.65 million shares, and Richard S. Pzena’s Pzena Investment Management, which holds 3.84 million shares.
Returns were also fueled by other companies, including Humana Inc (NYSE:HUM), a $20.5 billion market cap healthcare company. Humana Inc (NYSE:HUM)’s stock price rose 23.74% in the first six months of the year; needless to say, Glenview’s 5.13 million shares have generated plenty of profits for the fund.
HCA Holdings Inc (NYSE:HCA), of which the fund owns 12.84 million shares, also gained over the first semester. HCA Holdings Inc (NYSE:HCA)’s stock was up 18.17% over the period, generating big returns for Mr. Robbins’ fund, and several others, including David Tepper’s Appaloosa Management LP, which owns 5.32 million shares of HCA Holdings Inc (NYSE:HCA).
Community Health Systems (NYSE:CYH), a $5.5 billion market cap healthcare services provider boasted good returns too. Over the first six months of the year, Community Health Systems (NYSE:CYH)’s stock inched 15.53%, but still trades at 0.3 times the company’s sales –versus an industry average of 1x P/S. The fund owns almost half a billion dollars in Community Health Systems (NYSE:CYH)’s stock.
These are the returns (for the first semester) of the other companies that comprise Glenview’s top 9 picks:
- Tenet Healthcare Corp (NYSE:THC) rose 11.44%. The fund holds about $600 million in stock.
- American International Group Inc (NYSE:AIG) was up 8.07%; the fund last disclosed ownership of half a billion dollars in stock.
- Monsanto Company (NYSE:MON), the fund’s second largest equity position with 7.36 million shares –worth almost $900 million at current stock prices, inched 7.03%.
- Crown Castle International Corp. (NYSE:CCI) Glenview’s fourth largest stake, returned 1.13%.
Disclosure: Javier Hasse holds no position in any stocks or funds mentioned