How Did Billionaire Larry Robbins’ Top Long-Term Picks Perform Over Years?

Billionaire Larry Robbins‘ Glenview Capital was one of the best-performing large hedge funds in the period between 2012 and 2014. However, that winning streak ended in 2015 when the firm’s big bets on healthcare and pharmaceutical underperformed and it registered a loss of over 18% for the year. The magnitude of the loss suffered by the firm can be gauged from its assets under management (AUM), which fell from almost $12 billion to under $10 billion during 2015. To people who don’t know much about Mr. Robbins or Glenview that kind of loss might seem humongous, but Glenview Capital is no stranger to large drawdowns. Its flagship fund lost 50% in the midst of the financial crisis in 2008, but recouped all of those losses in the subsequent years with gains of 82.7% in 2009 alone. Taking into account Mr. Robbins’ track record of bouncing back from the lows and his philosophy of investing for the long-term, in this article, we will be going through the five stocks that Glenview has held for the past several years.

We track prominent investors and hedge funds because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 15 most popular small-cap stocks among a select group of investors delivered a monthly alpha of 80 basis points between 1999 and 2012 (see the details here).

#5 Tenet Healthcare Corp (NYSE:THC)

– Shares Owned by Glenview Capital (as of December 31): 17.9 million

– Value of Holding (as of December 31): $542.07 million

Glenview Capital has held a stake in Tenet Healthcare Corp (NYSE:THC) since the first quarter of 2012. While shares of Tenet Healthcare Corp (NYSE:THC) saw a huge rally from the time the fund initiated its stake till mid-2015, they have fallen over 60% since July last year. Glenview might have seen this slump as an opportunity and that’s why increased its stake in the company by 9% during the fourth quarter. However, it was not the only fund to do so, Ross Margolies‘ Stelliam Investment Management also increased its stake in the company by 30% to 2.32 million shares during the same period. On February 22, the company reported its fourth quarter earnings, beating analysts’ expectations of EPS of $0.34 on revenue of $4.82 billion by declaring EPS of $0.35 on revenue of $5.21 billion. On March 24, analysts at Credit Suisse reiterated their ‘Neutral’ rating on the stock, but boosted their price target on it to $31 from $30.

#4 Flextronics International Ltd. (NASDAQ:FLEX)

– Shares Owned by Glenview Capital (as of December 31): 55.13 million

– Value of Holding (as of December 31): $618.02 million

Shares of Flextronics International Ltd. (NASDAQ:FLEX) have appreciated by over 300% since Glenview Capital first reported owning a stake in the company in the first quarter of 2009. Though Glenview reduced its stake in the company by 27% in the fourth quarter of 2015, it still held over 10% of all outstanding shares of the company at the end of December. Billionaire David E. Shaw‘s firm D.E. Shaw increased its stake in the company by 349% to 3.46 million shares during the same period. Flextronics International Ltd. (NASDAQ:FLEX)’s stock has been on a consistent uptrend since January 28, when the Singapore-based company reported its fourth-quarter results and is currently trading up 7.6% year-to-date. However, most analysts believe that  the stock can go much higher from here because of the low forward P/E of  9.68, it currently trades at.  Moreover, they also think that the stock has little downside risk currently because of the strong free cash flow the company generates and its commitment to return 50% of its free cash flow to shareholders.