Billionaire Larry Robbins’ Top Healthcare Picks for Q2

#3 CIGNA Corporation (NYSE:CI)

– Shares Owned by Glenview Capital (as of March 31): 6.1 million

– Value of Holding (as of March 31): $836.48 million

After boosting its stake in CIGNA Corporation (NYSE:CI) by 52% during the final quarter of 2015, Glenview trimmed its holding in the company by 13% during the first quarter. Shares of CIGNA Corporation (NYSE:CI) have largely been range-bound for the past eight months but are nonetheless trading down by over 11% in 2016. On May 6, the company reported its first quarter financial results, declaring EPS of $2.32 on revenue of $9.90 billion, which beat EPS estimates of $2.16 but missed revenue estimates of $9.98 billion. Within a few days of the company reporting those results, several prominent analysts on the Street reduced their price targets on the stock. However, analysts at RBC Capital took a more positive tone in a note released on May 18, reiterated their ‘Sector Perform’ rating on the stock, while upping their price target on it to $174 from $169. Richard Barrera‘s Roystone Capital Partners also reduced its stake in the company during the first quarter, by 19% to almost 1.02 million shares.

#2 HCA Holdings Inc (NYSE:HCA)

– Shares Owned by Glenview Capital (as of March 31): 14.68 million

– Value of Holding (as of March 31): $1.15 billion

HCA Holdings Inc (NYSE:HCA) was a major winner for Glenview Capital from the first quarter of 2011, when the fund initiated its stake in the company, until last July, as its stock appreciated by almost 300% during that time. However, all of that changed in the second-half of 2015, when HCA Holdings Inc (NYSE:HCA)’s stock plummeted heavily, losing nearly one-third of its value. Rather than growing fearful after those heavy declines, the fund proceeded to boost its holding in the company by 160% during the final quarter of 2015 and by another 2% during the first quarter. The conviction that Glenview has displayed in the stock has been paying off rather well this year, with HCA Holdings shares having appreciated by nearly 13%. Though the stock has corrected a little in the last few days despite the company reporting better-than-expected first quarter numbers, most analysts don’t see it as a worrisome sign. Scion Asset Management, headed by Michael Burry of ‘The Big Short’ fame, upped its stake in HCA Holdings by 34% to 100,000 shares during the first quarter.

#1 Humana Inc (NYSE:HUM)

– Shares Owned by Glenview Capital (as of March 31): 6.42 million

– Value of Holding (as of March 31): $1.17 billion

Though Glenview Capital cut its stake in Humana Inc (NYSE:HUM) by 22% during the first quarter, the company continued to remain the fund’s largest equity holding going into the second quarter. Shares of Humana Inc (NYSE:HUM) are currently trading down by 5.6% year-to-date as it awaits regulatory approval for its merger with Aetna Inc (NYSE:AET). While it has been several months since the $37 billion Aetna/Humana merger was announced and the companies have received approval  from a number of states in the meantime, several analysts and investors are still skeptical about the completion of the merger due to the falling of several high-profile deals in the past few months. However, Mr. Robbins, while speaking at the recently concluded Ira Sohn Conference, which was attended by Insider Monkey, said that he remains confident that the deal will be completed soon. Hedge funds that initiated a stake in the company during the first quarter included Simon Davies‘ Sand Grove Capital Partners, which purchased 84,800 shares.

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