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VCA Inc. (WOOF) and Teradyne Inc. (TER): Two of Billionaire Larry Robbins’ Top Small-Cap Picks

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Glenview Capital Management is a hedge fund based in New York which was founded in 2000 by its current CEO and portfolio manager, Larry Robbins. The hedge fund generated a cumulative return of 260% since its inception, yielding an annualized return of 14.2%. Despite the fact that Glenview Capital lost approximately 50% of its assets in 2008, the fund managed to deliver strong returns in the years thereafter; Robbins’ fund returned more than 87% in 2009, while in 2014 the fund was able to outpace the stock market and most other hedge funds by generating a return of 14.4% net of fees. Larry Robbins, the skilled stock picker in charge, mainly invests in the following sectors: healthcare, industrial, finance, services and technology. According to Robbins’ latest 13F filing, the value of his fund’s public equity portfolio rose to $21.89 billion from $19.98 billion at the end of 2014. In this article we will cover the top mid-cap holdings of the billionaire fund manager, which are VCA Inc. (NASDAQ:WOOF), Tenet Healthcare Corp. (NYSE:THC), Teradyne Inc. (NYSE:TER) and Manitowoc Company Inc. (NYSE:MTW).


We follow hedge funds like Glenview Capital because our research has shown that their stock picks historically managed to generate alpha even though the filings are up to 45-days delayed. We used a 60-day delay in our back tests to be on the safe side and our research showed that the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Total Return Index by an average of 95 basis points per month between 1999 and 2012. After adjusting for risk, our calculations revealed that these stocks’ monthly alpha was 80 basis points. We have also been sharing and tracking the performance of these stocks since the end of August 2012, during which time they have returned 144%, outperforming the S&P 500 ETF by nearly 85 percentage points (see more details here).

Glenview Capital did not make changes to its equity stake in VCA Inc. (NASDAQ:WOOF) during the most recent quarter, which remains at 12.80 million shares , valued at $701.72 million as of March 31. It’s widely known that people are the most important asset in an organization and VCA’s management knows that quite well as the company expanded its partnership with Penn Foster to offer increased student internship opportunities. The leading animal healthcare company in North America will offer Penn Foster’s veterinary assistant students to be involved in VCA internships so that they can gain hands-on experience and training. It seems that VCA is keen on future development, as the company acknowledges that training these students can bring lots of benefits to its business. In the meantime, the stock has achieved an increase of nearly 10% since the beginning of the year and it keeps moving higher as the company has set clear and defined goals for the future. Among the funds we track, the quant funds D E Shaw and Renaissance Technologies hold the two largest positions in VCA Inc. (NASDAQ:WOOF) after Robbins’ Glenview Capital, which holds by far the largest position.

Glenview Capital also held pat with its position in Tenet Healthcare Corp. (NYSE:THC), with it remaining unchanged at 13.81 million shares, worth $683.87 million as of March 31. Over the last three months the company’s stock has risen by nearly 15%, as it continues to benefit from the wider implementation of Obamacare. Tenet Healthcare’s operations are mainly focused in California, Florida, and Texas; the latter being the state with the highest percentage of uninsured citizens. Therefore, Tenet Healthcare is bound to profit considerably from the continually expanding insurance coverage in the U.S. Indeed, the healthy financial results delivered by Tenet Healthcare play a crucial role in the recent strong performance of its stock. Perry Capital, the hedge fund managed by Richard Perry acquired a relatively sizable equity stake in Tenet Healthcare Corp. (NYSE:THC) during the most recent quarter.

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