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Larry Robbins Loads Up On More Tenet Healthcare Corp (THC) Shares Following Supreme Court Victory

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According to a recent filing with the Securities and Exchange Commission, Larry RobbinsGlenview Capital has hiked its stake in Tenet Healthcare Corp (NYSE:THC) by acquiring an additional 979,500 shares  through its affiliated funds, taking its total stake in the $5.66 billion healthcare company to 14.79 million shares. The  new holding amasses about 15% of the company’s outstanding stock.


Larry Robbins worked at veteran investor Leon Cooperman’s Omega Advisors before he established Glenview Capital in 2001. During the peak of the financial crises in 2008, the fund lost about 50%, but quickly got back on its feet in the following year when it posted gains of 82.7%. At the end of March, the market value of Glenview’s public equity portfolio stood at $21.90 billion, up from $19.98 billion at the end of the previous quarter. The healthcare sector, which is up by about 14.46% year to date, represented 36% of the fund’s holdings.

Larry Robbins
Larry Robbins
Glenview Capital

An everyday investor does not have the time or the required skill-set to carry out an in-depth analysis of equities and identify companies with the best future prospects like a fund with the knowledge and resources of Glenview can. However, it is also not a good idea to pay the egregiously high fees that investment firms charge for their stock picking expertise. Thus a retail investor is better off to monkey the most popular stock picks among hedge funds by him or herself. But not just any picks mind you. Our research has shown that a portfolio based on hedge funds’ top stock picks (which are invariably comprised entirely of large-cap companies) falls considerably short of a portfolio based on their best small-cap stock picks. The most popular large-cap stocks among hedge funds underperformed the market by an average of seven basis points per month in our back tests whereas the 15 most popular small-cap stock picks among hedge funds outperformed the market by nearly a percentage point per month over the same period between 1999 and 2012. Since officially launching our small-cap strategy in August 2012 it has performed just as predicted, beating the market by over 85 percentage points and returning over 145%, while hedge funds themselves have collectively under-performed the market (read the details here).

Glenview has held a position in Tenet Healthcare Corp (NYSE:THC) since the first quarter of 2012. The stock has appreciated by about 212% since then, putting its average annual return at 46.12%. On a year-to-date basis the gains amount to nearly 13%, which is almost the same as the industry’s gains of 13.53% during the same period. With a current twelve-month trailing earnings multiple of 55.75 as compared to the industry’s average of 25.98, the stock may seem overpriced, but Tenet Healthcare Corp (NYSE:THC) has quite a few catalysts that will boost its future earnings, chief among them being the recent favorable ruling by the Supreme Court with regards to tax subsidies related to the Affordable Care Act.

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