In this article, we discuss the 10 best stocks to buy according to billionaire Larry Robbins. If you want to skip our detailed analysis of these stocks, go directly to 5 Best Stocks To Buy According to Billionaire Larry Robbins.
Larry Robbins is an American hedge fund manager who founded Glenview Capital in 2000, which is a New-York based investment management company. According to the third quarter 13F filings, Glenview Capital had a portfolio worth $5.45 billion, with discretionary assets under management of $6.1 billion.
Glenview Capital invests primarily in the healthcare, finance, information technology, materials, consumer discretionary, and communications sectors, managing capital for its clients via a number of private investment funds. Larry Robbins’ hedge fund has a top ten holdings concentration of 50.32%.
Larry Robbins graduated from the University of Pennsylvania in 1992 with a bachelor’s in economics and systems engineering, and he is also a certified public accountant. He started his career in New York at Gleacher & Company, where he worked for three years before joining Leon Cooperman’s Omega Advisors. He joined as an analyst and later became a partner at the hedge fund. He left Cooperman’s fund in 2000 to start his own venture.
We used the Q3 portfolio of Larry Robbins’ Glenview Capital to select the top 10 stock picks of the hedge fund. We ranked the companies according to the hedge fund’s stake value in each holding.
Best Stocks To Buy According to Billionaire Larry Robbins
10. Alphabet Inc. (NASDAQ:GOOG)
Glenview Capital’s Stake Value: $134,376,000
Percentage of Glenview Capital’s 13F Portfolio: 2.46%
Number of Hedge Fund Holders: 156
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology corporation that is the parent company of Google and Google subsidiaries, and is one of the Big Five US tech firms. Larry Robbins owns 50,262 shares of Alphabet Inc. (NASDAQ:GOOG) as of Q3 2021, worth $134.3 million, representing 2.46% of the billionaire’s total 13F portfolio.
On October 26, Alphabet Inc. (NASDAQ:GOOG) announced its financial results for the third quarter, posting earnings per share of $27.99, beating estimates by $4.75. Revenue over the period jumped 41.03% year-over-year to $65.12 billion, exceeding estimates by $1.83 billion.
Tigress Financial analyst Ivan Feinseth on December 3 raised the price target on Alphabet Inc. (NASDAQ:GOOG) to $3,540 from $3,185 and reiterated a Strong Buy rating on the stock, stating that the company’s increasing focus on AI is enabling greater product functionality and “significant” growth opportunities.
Among the hedge funds being tracked by Insider Monkey, 156 elite funds were bullish on Alphabet Inc. (NASDAQ:GOOG), with stakes amounting to roughly $35 billion. Chris Hohn’s TCI Fund Management is the largest Alphabet Inc. (NASDAQ:GOOG) stakeholder as of September 2021, holding 2.95 million shares worth $7.86 billion.
Here is what Saturna Capital Amana Funds has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2021 investor letter:
“Alphabet was a new addition to the Fund this year, as we believed it important to have exposure to the top online media and advertising company in the world. Some have raised concerns surrounding Alphabet’s exposure to political interference, but we take comfort from the belief that were the company to be broken up, it would quite likely be worth even more than as a single entity.”
9. Baxter International Inc. (NYSE:BAX)
Glenview Capital’s Stake Value: $174,350,000
Percentage of Glenview Capital’s 13F Portfolio: 3.19%
Number of Hedge Fund Holders: 42
Baxter International Inc. (NYSE:BAX) is an Illinois-based healthcare company, manufacturing medical equipment and supplies to treat hemophilia, kidney disease, and provide intravenous therapy. Glenview Capital elevated its position in Baxter International Inc. (NYSE:BAX) by 86% during the third quarter, owning 2.1 million shares of the company, worth $174.35 million. The stock accounts for 3.19% of the fund’s total 13F portfolio.
In the third quarter of 2021, 42 hedge funds in the database of Insider Monkey were long Baxter International Inc. (NYSE:BAX), down from 46 funds in the prior quarter. David Blood and Al Gore’s Generation Investment Management is the leading Baxter International Inc. (NYSE:BAX) stakeholder, with a $1.6 billion position in the company.
Announcing its Q3 financial results on October 28, Baxter International Inc. (NYSE:BAX) posted earnings per share of $1.02, exceeding estimates by $0.08. The quarterly revenue totaled $3.32 billion, up 8.55% from the prior-year quarter, but missed estimates by $336,720.
Baxter International Inc. (NYSE:BAX) completed its transaction to acquire Hill-Rom Holdings, a medical technology company, in December 2021. The Hill-Rom shareholders favored the acquisition, receiving $156 per share in cash prior to the effective time of the merger. The total price paid by Baxter International Inc. (NYSE:BAX) for the deal was $12.4 billion.
JPMorgan analyst Robbie Marcus on December 17 reinstated coverage of Baxter International Inc. (NYSE:BAX) with an Overweight rating and a price target of $95, up from $94. With the Hill-Rom deal now closed, Baxter International Inc. (NYSE:BAX)’s shares “are just too cheap for mid-single-digit growth”. The analyst also observed that Baxter International Inc. (NYSE:BAX)’s “current valuation offers a most compelling risk/reward.”
In addition to Alphabet Inc. (NASDAQ:GOOG), Uber Technologies, Inc. (NYSE:UBER), and Meta Platforms, Inc. (NASDAQ:FB), Baxter International Inc. (NYSE:BAX) is one of the most notable stocks in the Q3 portfolio of billionaire Larry Robbins.
Here is what Cooper Investors has to say about Baxter International Inc. (NYSE:BAX) in its Q3 2021 investor letter:
“During the quarter we exited our position in Baxter, having originally bought in 2017 as a Low Risk Turnaround with clear Stalwart attributes. In essence, the core businesses were highly durable, providing life sustaining or saving medical products such as IV medication or pumps and dialysis machines.
They had been mismanaged prior to the company spinning off its biopharmaceutical business in 2015 which had generated most of Baxter’s operating profit. With a new CEO in Joe Almeida, who came with a successful track record leading another medical device company (Covidien) we identified three sources of value latency for the new standalone Baxter.
Firstly, optimizing the cost structure. Baxter was successful here – they were able to effectively double operating margins from low single digits to mid-to-high teens over a relatively short four-year period. Secondly, accelerating sales growth through a more focused R&D effort. This is inherently more difficult than cost optimisation and on this front success has been muted with only moderate impact to revenues from new product introductions. Finally, capital deployment through Baxter’s significantly under-levered balance sheet. Several smaller bolt-on acquisitions were nicely complementary to the existing portfolio, but in early September the company announced the acquisition of Hil-Rom Holdings, a medical device company with leading positions in bed systems and patient monitoring. The deal is significant at US$12.5bn in size, and exhausts all balance sheet latency in one fell swoop.
Whilst it is “EPS accretive” we believe the high single digit ROIC management are targeting over five years is most reflective of the financial merits of the deal. Put another way, despite visions of providing digital and connected healthcare (think a Baxter IV pump combined with a Hil-Rom smart bed), ultimately the combined entity will likely remain a low-to-mid-single digit grower. Baxter looks like they are getting bigger but not necessarily better.
This combination of uncertainty around the merits of the Hil-Rom acquisition and the underwhelming performance on the product development side of the business led us to conclude that the investment proposition today is less attractive relative to other opportunities.”
8. DXC Technology Company (NYSE:DXC)
Glenview Capital’s Stake Value: $188,282,000
Percentage of Glenview Capital’s 13F Portfolio: 3.44%
Number of Hedge Fund Holders: 33
DXC Technology Company (NYSE:DXC), a multinational IT, consulting, and outsourcing firm, is one of the best stocks to buy according to billionaire Larry Robbins, who owns a $188.2 million stake in the company as of September 2021, representing 3.44% of his total Q3 securities.
Harris Associates, the largest DXC Technology Company (NYSE:DXC) stakeholder during the third quarter, owns 10.73 million shares of the company, worth $360.6 million. Overall, a total of 33 hedge funds tracked by Insider Monkey’s Q3 database reported owning stakes worth $644.5 million in DXC Technology Company (NYSE:DXC).
DXC Technology Company (NYSE:DXC) announced on November 3 its third quarter earnings, posting an EPS of $0.90, exceeding estimates by $0.07. Revenue over the period came in at $4.03 billion, missing estimates by $86.43 million.
Renfe-LogiRAIL, a rail operator from Spain, awarded DXC Technology Company (NYSE:DXC) a $6 million contract on December 20 to modernize the company’s IT infrastructure, which will assist Renfe-LogiRAIL in meeting the increasing demand for its passenger and freight services as they return to pre-pandemic levels.
On December 15, BMO Capital analyst Keith Bachman lowered the price target on DXC Technology Company (NYSE:DXC) to $40 from $45 but kept an Outperform rating on the shares longer term. DXC Technology Company (NYSE:DXC) is appropriately reducing capex and capital lease expenses to generate more explicit and sustainable cash flow.
“DXC Technology Company (DXC) continued to climb higher during the quarter gaining 24.57%. The company reported solid Fiscal Year 4th quarter (FY4Q) results with revenue of $4.385B beating consensus of $4.29B and earnings per share (EPS) of $0.74 ahead of expectations for $0.70. The company guided for fiscal 2022 revenue of $16.6-$16.8B, below the Street at $16.9B and adjusted EPS of $3.45-3.65, ahead of the consensus of $3.43. By FY2024, the company expects organic revenue growth of 1-3%, adjusted earnings before income and taxes (EBIT) margin of 10-11%, adjusted diluted EPS of $5.00-$5.25 and free cash flow (FCF) of $1.5B. Later in the month, the company held an investor day where management highlighted their confidence that they can hit all of their targets while also stressing the progress they have made on their turnaround to date.”
7. Willis Towers Watson Public Limited Company (NASDAQ:WLTW)
Glenview Capital’s Stake Value: $193,592,000
Percentage of Glenview Capital’s 13F Portfolio: 3.54%
Number of Hedge Fund Holders: 75
Billionaire Larry Robbins’ Glenview Capital acquired a position in Willis Towers Watson Public Limited Company (NASDAQ:WLTW) during the third quarter of 2021, buying 832,798 shares of the company, worth $193.5 million. Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is a London-based company specializing in risk management, insurance brokerage, and advisory services.
On October 29, Willis Towers Watson Public Limited Company (NASDAQ:WLTW) reported its Q3 results. The company announced earnings per share of $1.73, beating estimates by $0.15.
Evercore ISI analyst David Motemaden initiated coverage of Willis Towers Watson Public Limited Company (NASDAQ:WLTW) with an In Line rating and a $240 price target on December 16. The analyst remains cautious on organic growth and margins as well as the potential for the stock to re-rate higher, but notes that downside is limited due to discounted valuation and the presence of activist investors.
The largest Willis Towers Watson Public Limited Company (NASDAQ:WLTW) stakeholder as of Q3 2021, First Eagle Investment Management, increased its stake in the company by 76%, holding a total of 4.7 million shares worth $1.10 billion. Overall, 75 hedge funds in the Q3 database of Insider Monkey were bullish on the stock.
Here is what Vltava Fund has to say about Willis Towers Watson Public Limited Company (NASDAQ:WLTW) in its Q3 2021 investor letter:
“The second position is much larger and was thrown into our hands by an unexpected turn of events. It is the stock of Willis Towers Watson. This is a British company with roots dating back to 1828. WLTW is the third-largest insurance broker in the world. This is a sector with which we are very familiar, as some time ago we held in our portfolio shares of its slightly larger competitor AON.
It was AON in fact that announced last spring it had agreed to merge with WLTW. In the merger, WLTW shareholders would have received AON shares. As is usually the case with such announcements, investors stepped in to conduct what is known as merger arbitrage. In this particular case, they bought WLTW shares and sold short AON shares in order to profit from the fact that the prices of the two stocks did not yet fully reflect the exchange ratio in the merger. Moreover, merger arbitrage commonly makes extensive use of leverage in order to increase profits.
This summer, however, AON and WLTW jointly announced that they were pulling out of the planned merger because they had not received approval from the US Department of Justice. The regulator had feared that in an already quite concentrated industry, a merger of the second- and third-largest players would restrict competition too much. The immediate reaction to this announcement was, of course, closing of positions from the merger arbitrage. This brought an immediate increase in the price of AON shares and decline in the price of WLTW shares. We saw this as an excellent buying opportunity in WLTW stock. (In addition, WLTW had received a USD 1 billion breakup fee from AON.) Because we knew the industry and the two companies well from earlier years, we were able to react immediately, and a new, very attractive investment appeared in Vltava Fund’s portfolio rather unexpectedly and quickly.
Insurance brokerage is a very good business. Simply put, insurance brokers are intermediaries who sell, find, or negotiate insurance on behalf of a client for a fee. They do not bear the insurance risk themselves and thereby do not risk their own capital. They live from commissions and the fact that this is a large and recurring business. Just to give you a sense of this, I will note, for example, that of the 500 companies in the Fortune Global 500 list, more than 90% are clients of WLTW. The entire industry is very concentrated and has relatively high barriers to entry. WLTW is the third-largest global player, has very high free cash flow, low capital investment requirements, and a very valuable client base. The business as a whole also provides some long-term inflation protection, as the speed at which the volume of total premiums grows follows the speed at which the economy and asset prices grow in nominal terms. I have to say we are very happy that circumstances have passed this investment on to us.”
6. Global Payments Inc. (NYSE:GPN)
Glenview Capital’s Stake Value: $210,567,000
Percentage of Glenview Capital’s 13F Portfolio: 3.85%
Number of Hedge Fund Holders: 68
Global Payments Inc. (NYSE:GPN), an American payment technology provider, is one of the best stock picks of Larry Robbins, with the billionaire elevating his stake in the company by 46% in Q3 2021. Robbins owns 1.33 million Global Payments Inc. (NYSE:GPN) shares, worth $210.5 million, representing 3.85% of his total Q3 investments.
Global Payments Inc. (NYSE:GPN), on November 2, announced earnings for the quarter ending September 2021. The company posted earnings per share of $2.18, exceeding estimates by $0.03. Revenue over the period jumped 14.57% year-over-year to $2 billion, outperforming estimates by $10.29 million.
Northcoast analyst Kartik Mehta upgraded Global Payments Inc. (NYSE:GPN) on December 22 to Buy from Neutral with a $160 price target. Since the stock has underperformed the S&P 500 by 63% year-to-date, the analyst believes that the current valuation does not factor in the positive fundamentals and catalysts for the next 12 to 18 months.
Among the 867 elite hedge funds tracked by Insider Monkey in Q3 2021, 68 funds were long Global Payments Inc. (NYSE:GPN), with stakes totaling $3.46 billion, as compared to 66 funds holding stakes in Global Payments Inc. (NYSE:GPN) worth $4.85 billion in the preceding quarter.
Orbis Investment Management, the biggest Global Payments Inc. (NYSE:GPN) stakeholder, owns 3.1 million shares of the company worth approximately $500 million.
Global Payments Inc. (NYSE:GPN) is a notable stock pick Glenview Capital’s Q3 portfolio, just like Alphabet Inc. (NASDAQ:GOOG), Uber Technologies, Inc. (NYSE:UBER), and Meta Platforms, Inc. (NASDAQ:FB).
Here is what LRT Capital Management has to say about Global Payments Inc. (NYSE:GPN) in its Q3 2021 investor letter:
“Global Payments Inc. (GPN) – another credit processing / merchant acquirer that is currently trading at a depressed valuation. Fiserv, Inc. (FISV), is in a similar spot. Both companies are trading at their lowest forward earnings multiples since 2013 and represent good opportunities. We expect payment companies to be particularly good inflation hedges as their revenues rise with the nominal spending that flows through their networks while most costs are fixed.”
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Disclosure: None. 10 Best Stocks To Buy According to Billionaire Larry Robbins is originally published on Insider Monkey.