Thermo Fisher Scientific Inc. (TMO), Monsanto Company (MON): Billionaire Larry Robbins’ Top Picks Beat the Market Again in Q1

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Larry RobbinsGlenview Capital posted a decent 3.5% return during the first quarter according to our returns methodology (actual results will vary) even though the gains do not exactly position the fund among the ranks of the best performing funds during the quarter either, like Kevin Kotler’s Broadfin Capital, which gained more than 60%. Our weighted returns formula is based on these funds’ long positions at the start of quarter, in companies that exceeded a market cap of $1 billion, which in Glenview’s case involved 74 holdings.


Robbins, whose net worth is $2.2 billion according to Forbes, founded Glenview in 2001 after working with renowned investors like Omega Advisors’ Leon Cooperman and Mr. Gleacher of Gleacher & Company. The fund’s investment strategy is based on scrupulous research that is grounded in both top down and bottom up approachs. The investment ideas are mostly inspired by identifying temporary factors which might be wearing down the valuation in the short run such as a change in the company’s management or the price of raw materials. These ideas could also involve new circumstances that provide an impetus to the corporation’s business model, such as a change in government regulations. The Glenview Offshore Opportunity Fund was up about 24.8% net of fees during 2014, while the Glenview Capital Opportunity Fund posted 25.25% gains during the same period. 35% of the fund’s holdings are comprised of stocks in the health care sector, while another 25% comprise the consumer discretionary sector. The fund’s most valuable positions at the end of 2014 were on Thermo Fisher Scientific Inc. (NYSE:TMO), Monsanto Company (NYSE:MON), Flextronics International Ltd. (NASDAQ:FLEX) and Tenet Healthcare Corp (NYSE:THC), which altogether represented over 20% of Glenview’s portfolio value.

Many hedge funds and other big money managers prefer to invest the largest amounts of their capital in large and mega-cap stocks because these companies allow for a much larger capital allocation, which is important taking into account that the global hedge fund industry has swollen to nearly $3.0 trillion. That’s why, if we take a look at the most popular stocks among hedge funds (we track more than 700 in our database), we won’t find any mid- or small-cap stocks there. However, our backtests of hedge funds’ equity portfolios between 1999 and 2012 revealed that the 50 most popular stocks among hedge funds underperformed the market by 7 basis points per month. However, we have found that we can combine the pricing inefficiencies among small-cap picks with hedge fund expertise and obtain significant results. This was confirmed through backtesting, and in forward tests since 2012 this strategy that involves imitating the most popular small-cap picks among hedge funds managed to provide gains of more than 132%, beating the broader market by over 80 percentage points (Click here for details).

With 11.39 million shares valued at $1.43 billion, Thermo Fisher Scientific Inc. (NYSE:TMO) was Glenview’s top holding. The company posted returns of 7.35% during the first quarter. Two other investors who also cashed in on Thermo’s gains were Andreas Halvorsen of Viking Global and Boykin Curry of Eagle Capital Management. Marc Casper, CEO at Thermo Fisher Scientific Inc. (NYSE:TMO) sold about 20,000 in an insider sales transaction this month at an average price of $131.89. His remaining holding stands at about 398,600 shares.

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