According to a 13G filing with the Securities and Exchange Commission, Larry Robbins’ Glenview Capital revealed its ownership of 8.08 million shares of VCA Inc. (NASDAQ:WOOF), representing 9.83% of the outstanding stock. To be more detailed, Glenview Capital reported selling 4.72 million shares of VCA on August 3. Moreover, 4.7 million of the aforementioned sell-off were sold at $56.33 each, while the remaining shares were sold at $61.61 a share.
Glenview Capital Management is New York-based hedge fund established by Larry Robbins in 2001. The firm primarily makes concentrated bets on large-cap companies, but is not eschewing from investing in bonds as well. Generally, the hedge fund looks for companies with good businesses, low valuations, and excess capital that can succeed irrespective of the economic environment they are operating in. Glenview Capital Management oversees a semi-diversified portfolio with a net equity exposure in the range of 40-60%, which makes the fund’s portfolio hedged to some extent. The investment firm takes on a deep fundamental approach to investing, which has proven to be quite successful through the course of the fund’s existence. Glenview Capital returned a cumulative return of 260% over the ten-year period since its inception in 2001, which yields an annualized return of 14.2%. According to its most recent 13F filing, Glenview Capital manages a public equity portfolio with a market value of $21.90 billion.
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VCA Inc. (NASDAQ:WOOF) is a leading provider of pet healthcare services in the United States and Canada. The company owns and operates the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the United States. Moreover, VCA is the largest provider of online communication, professional education and marketing solutions to the veterinary community. Let’s not forget to mention that the company also supplies diagnostic imaging equipment to the veterinary industry. The shares of the provider of pet healthcare services have grown by 19% since the beginning of the year and reached an all-time high of over $62 a few days ago.
It’s commonly known that the veterinary and animal health businesses usually follow the broader economy. Generally, people tend to spend more income on their pets when the economy is strong. In this way, VCA has seen strong growth lately, as the U.S. economy is currently in a much better state. Consumer spending in the United States grew at a rate of 2.9% in the second quarter of this year, which definitely played an important role in the strong performance delivered by VCA, which has seen increased demand for pet healthcare over the last months. Reportedly, pet population is constantly growing as more and more households tend to have pets, which also indicates a positive sign for the company. VCA has been successful in benefiting from higher levels of technology usage by launching mobile apps, which give clients the ability to register online for appointments, get communications and feedback. Furthermore, VCA also has a messenger app that can be used by clients to communicate with the company’s doctors and employees.
Let’s now turn our attention to VCA’s financial results for the second quarter of 2015 announced on July 29. VCA posted record revenue of $548.8 million, up by 12.1% on the year. At the same time, the company delivered diluted earnings per common share (EPS) of $0.65 for the quarter, compared to $0.51 a year ago. VCA has also positively revised its guidance for fiscal 2015. The company expects a higher revenue figure of $2.13 billion for the full year, which was upward revised from $2.12 billion. Moreover, VCA increased its guidance on diluted earnings per common share to $2.18 from $2.08.
It is no surprise that Glenview Capital decided to cash out a part of its stake in VCA, as the stock was trading at an all-time high when the transactions were made. Jim Simons’ Renaissance Technologies is another reputable hedge fund within our database that remains bullish on VCA Inc. (NASDAQ:WOOF), holding an ownership stake of 1.39 million shares as of the end of March.
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