In this article, we’ll check out the top 9 stocks billionaire Larry Robbins just added to his portfolio, which also happen to be the only nine stocks added to his portfolio during Q4.
Amazon.com, Inc. (NASDAQ:AMZN), Activision Blizzard, Inc. (NASDAQ:ATVI), and Alibaba Group Holding Limited (NYSE:BABA) are among the major new additions to billionaire investor Larry Robbins’ 13F portfolio during the fourth quarter.
Larry Robbins is the billionaire founder and CEO of Glenview Capital Management, a New York-based hedge fund that manages $6.13 billion in assets as of August 24, 2021. Prior to founding Glenview, Robbins spent six years at fellow billionaire Leon Cooperman’s Omega Advisors, where he served as an analyst and partner on the fund’s US equity long/short team.
Robbins’ successful hedge fund, which he founded in 2000, is coming off another strong showing in 2021, as it returned 21.1% for the year, including an impressive 10.3% gain in December alone. That performance vaulted Robbins into 13th place on the list of top-earning money managers in 2021, with Bloomberg estimating that he personally took home just over $340 million last year.
Glenview’s yearly performance came on the heels of solid 9.5% gains in 2020 and even heftier 26% returns in 2019. Despite the double-digit gains in December, the fund’s 13F assets declined for the second straight quarter, sliding to $4.69 billion by the end of 2021, down from $6.05 billion in the middle of 2021. Those figures are also well below the fund’s $11.42 billion 13F portfolios from the end of 2019.
Glenview Capital appeared to be somewhat bearish on the market during the fourth quarter of 2021, as it sold out of or reduced the size of 42 of its positions while buying into or adding to the size of just 22 positions. We thought it would be interesting to see which stocks Robbins was bullish enough to buy into during Q4 despite his general bearishness, so in this article, we’ll analyze all nine long positions added to his portfolio during Q4.
Larry Robbins of Glenview Capital
Our Methodology
We took a look at Glenview Capital Management’s latest 13F filing with the SEC to pinpoint the new additions to the fund’s portfolio. We have ranked them based on the value of Glenview’s stake in those new holdings.
We follow hedge funds like Glenview Capital because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.
All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q4 2021 reporting period.
Top 9 Stocks Billionaire Larry Robbins Just Added to His Portfolio
9. Evolus, Inc. (NASDAQ:EOLS)
Value of Glenview Capital’s 13F Position: $2.56 million
Number of Hedge Fund Shareholders: 11
Evolus, Inc. (NASDAQ:EOLS) represents the smallest new position that Larry Robbins built during Q4, buying 393,827 shares of the beauty company. Steve Cohen’s Point72 Asset Management also built a new stake in EOLS during Q4, buying 310,600 shares.
Evolus, Inc. (NASDAQ:EOLS) added another 400 new customer accounts during Q4 for its breakthrough facial wrinkles treatment, Jeuveau, while its 7,000 overall accounts have achieved an impressive reorder rate of over 70%. That helped Evolus grow net revenue by 76% in 2021, with the company expecting 43% to 50% growth on top of that in 2022.
Alongside Amazon.com, Inc. (NASDAQ:AMZN), Activision Blizzard, Inc. (NASDAQ:ATVI), and Alibaba Group Holding Limited (NYSE:BABA), Evolus, Inc. (NASDAQ:EOLS) is a very different but equally compelling stock pick that caught Larry Robbins’ eye during Q4.
8. Digimarc Corp. (NASDAQ:DMRC)
Value of Glenview Capital’s 13F Position: $2.96 million
Number of Hedge Fund Shareholders: 12
75,000 shares of Digimarc Corp (NASDAQ:DMRC) were added to the 13F portfolio of Larry Robbins during Q4. Digimarc hasn’t been very popular among hedge funds over the years, but has slowly trended up during the last five quarters, hitting double digit hedge fund ownership for the first time.
Digimarc Corp (NASDAQ:DMRC)’s product identification solutions were bolstered in the fourth quarter with the company’s all-stock acquisition of product cloud company EVRYTHNG Limited. The deal will allow Digimarc to offer a fuller suite of solutions to its customers in terms of tracking and managing their product inventories throughout their lifecycle.
Digimarc Corp (NASDAQ:DMRC) grew revenue by 28% to $7.1 million in the fourth quarter of 2021, thanks to both growing subscription revenue and higher services revenue. However, the company’s operating loss of $8.2 million for the quarter eclipsed its sales by $1.1 million and was 5% higher than a year ago.
7. Evolv Technologies Holdings Inc. (NASDAQ:EVLV)
Value of Glenview Capital’s 13F Position: $3.34 million
Number of Hedge Fund Shareholders: 17
The select group of high performing hedge funds that are tracked in our database owned 12.6% of Evolv Technologies Holdings Inc (NASDAQ:EVLV)’s shares on December 31, 749,461 of which were added to Glenview Capital’s portfolio during Q4.
Evolv Technologies Holdings Inc (NASDAQ:EVLV) shares plunged by 55% between the middle of August and the end of 2021, which may have prompted Larry Robbins and his team to buy into the stock at a discount. EVLV shares have lost another 41.7% so far in 2022 however, as the security company’s recent guidance and initiatives have left investors with more questions than answers.
Evolv Technologies Holdings Inc (NASDAQ:EVLV) plans to transition its customers to a subscription model, with expectations for $27 million to $28 million in annualized recurring revenue from its current customer base. While such a model may prove lucrative in the long-term if Evolv can maintain a high retention rate, the company is likely to lose a lot more money in the near-term as its sales get spread out over a longer period. Evolv expects an operating loss of between $82 million and $84 million this year, nearly 150% greater than its anticipated revenue.
6. Hyperfine, Inc. (NASDAQ:HYPR)
Value of Glenview Capital’s 13F Position: $7.25 million
Number of Hedge Fund Shareholders: 29
Closing out the first half of the list is Hyperfine, Inc. (NASDAQ:HYPR), another intriguing buy-low candidate whose shares got battered late in the fourth quarter, but which offers some compelling upside as it works to disrupt the $23 billion MRI industry.
Hyperfine, Inc. (NASDAQ:HYPR) took part in a rare double-SPAC deal, merging with both Liminal Sciences and the special purpose acquisition company HealthCor Catalio Acquisition last year in a deal valued at $580 million. The deal was financed in part through private backing from several notable hedge funds, including Perceptive Advisors, ARK Investment Management, and Deerfield Management.
Hyperfine, Inc. (NASDAQ:HYPR)’s MRI-on-wheels, Swoop, gained FDA approval in 2020 for noncontrast scans, and the company is developing further innovations and uses for its scanner, including the capability to image a patient’s cervical spine and extremities.
Check out some of Larry Robbins’ biggest new buys of Q4 in the second half of this article, including Amazon.com, Inc. (NASDAQ:AMZN), Activision Blizzard, Inc. (NASDAQ:ATVI), and Alibaba Group Holding Limited (NYSE:BABA).
5. Alibaba Group Holding Limited (NYSE:BABA)
Value of Glenview Capital’s 13F Position: $9.84 million
Number of Hedge Fund Shareholders: 97
Hedge funds have been abandoning Alibaba Group Holding Limited (NYSE:BABA) in droves in recent quarters, as 35% of the Chinese ecommerce giant’s former hedge fund shareholders sold off their positions in the second half of 2021. Larry Robbins took a contrarian stance, buying 82,789 BABA shares during Q4.
Alibaba Group Holding Limited (NYSE:BABA) shares have fallen by nearly 50% over the past year owing to a myriad of factors that have impacted not only the company’s own growth rate but the entire Chinese online market as well. Online retail sales in China slumped to just 5% growth in the third quarter, which lead Alibaba to make a significant downgrade to its fiscal year outlook, slashing it by close to 33% on both the upper and lowers ends of the range.
Longleaf Partners International Fund discussed the above issues as well as some of the other rationale behind its decision to sell off Alibaba Group Holding Limited (NYSE:BABA) during the fourth quarter in the fund’s Q4 2021 investor letter:
“Alibaba (-50%, -2.26%; -22%, -0.82%), the largest online retail platform in China, was another top detractor for the year and in the fourth quarter. Alibaba reported weak quarterly results and downgraded its sales outlook for the current fiscal year to 20- 23% growth, down from the original guidance of 29-32% growth. Macro headwinds, weak consumer sentiment, regulatory scrutiny and competitive forces are having a larger than expected impact on overall retail sales and Alibaba’s market share. Notably, overall retail sales in China slowed down to a meager 5% growth in the September quarter. Slowing consumption, combined with stiff competition from new entrants in live streaming e-commerce, have resulted in transitory deceleration in Alibaba’s core ecommerce growth trajectory. Additionally, the company is accelerating strategic investments in new initiatives, including Community Group Buying (Taocaicai), Taobao Deals, Local Consumer Services and International Ecommerce. These are future growth drivers but are depressing company’s earnings today. In December, we exited our full position in Alibaba. This was more of a tactical move than a change in investment conviction. We initiated the position early in 2021, and the continued challenges in the second half of the year resulted in a loss that was material enough to be helpful from a tax distribution management point of view. We are sensitive to taxable gains and try to minimize where sensible, so we took advantage of the opportunity to reduce that liability and plan on revisiting the Alibaba opportunity in 2022. We continue to own Alibaba in our Asia Pacific strategy.”
4. Activision Blizzard, Inc. (NASDAQ:ATVI)
Value of Glenview Capital’s 13F Position: $20.57 million
Number of Hedge Fund Shareholders: 69
Activision Blizzard, Inc. (NASDAQ:ATVI) is another large-cap stock that has lost quite a bit of hedge fund support in recent quarters, with more than 30% of former shareholders ditching ATVI since early 2020. Robbins again took a contrarian stance on the stock, which lost 28% in 2021, and has been rewarded thus far in 2022, as ATVI shares have gained 21%.
Activision Blizzard, Inc. (NASDAQ:ATVI)’s strong performance this year has been thanks to a rather unexpected savior in Microsoft Corporation (NASDAQ:MSFT), which announced in January that it would acquire the struggling World of Warcraft and Call of Duty developer for $68 billion. The deal isn’t a sure bet to be approved by regulators however, which is why there’s a nearly 10% gap between ATVI’s current share price and the value of the Microsoft offer.
Citing some of those struggles that have beset Activision recently, Baron Partners Fund had to say about closing its Activision Blizzard, Inc. (NASDAQ:ATVI) position in the fund’s Q4 2021 investor letter:
“The Fund’s Core Growth investments were negatively impacted by the market rotation to value-oriented businesses. Fundamentals for most of our Core Growth holdings remain strong. We exited two positions in this space, which included Activision Blizzard, Inc. We believe ESG concerns at Activision could be a negative for the company in the coming years.
Shares of Activision Blizzard, Inc., a leading video game publisher, detracted from performance. The company reported solid earnings results and maintained guidance for fiscal year 2021. However, the stock fell primarily due to a combination of increased concern around an employee lawsuit alleging sexual harassment and timing delays for two key Blizzard games (Diablo IV and Overwatch 2). We sold our position.”
3. Quantum-Si incorporated (NASDAQ:QSI)
Value of Glenview Capital’s 13F Position: $47.22 million
Number of Hedge Fund Shareholders: 17
Smack dab in the middle of a bunch of large-cap behemoths on the second half of this list sits Quantum-Si incorporated (NASDAQ:QSI), a small-cap biotech that Larry Robbins took a significant stake in during Q4, buying up just over 5% of the company’s outstanding shares, 6 million in total.
Quantum-Si incorporated (NASDAQ:QSI) shares have lost 59% of their value since the end of June 2021, shortly after the company went public following its merger with an SPAC. It’s unclear what investors were expecting from the company, which didn’t even have a commercialized product in Q3 and earned zilch on the revenue front.
On the other hand, this will be a big year for Quantum-Si incorporated (NASDAQ:QSI), which plans to fully commercialize its proteomics platforms, which includes its single molecule analyzer Platinum, which it will sell for $70,000. The company purports the device to be more sensitive, more portable, and cheaper than competing mass spectrometers on the market, making it a potentially valuable acquisition for researchers.
2. US Foods Holding Corp. (NYSE:USFD)
Value of Glenview Capital’s 13F Position: $56.39 million
Number of Hedge Fund Shareholders: 39
There was a 30% jump in hedge fund ownership of US Foods Holding Corp. (NYSE:USFD) during Q4, with Larry Robbins being one of the prominent money managers to take a new stake in the company. Ray Dalio’s Bridgewater Associates and Lee Ainslie’s Maverick Capital were among the other hedge funds to add USFD to their 13F portfolios.
US Foods Holding Corp. (NYSE:USFD) grew adjusted EBITDA by 58% year-over-year during the fourth quarter, which has the fresh food producer well on its way to achieving its goal of $1.7 billion in adjusted EBITDA in 2024. The company expects to achieve the bulk of its EBITDA growth through a combination of growing its market share and optimizing its gross margins.
US Foods Holding Corp. (NYSE:USFD) has also been the target of hedge fund activism in recent months, as Scott Ferguson’s Sachem Head Capital, which raised its stake in USFD by 198% during Q4. The activist fund announced that it will attempt to take over US Foods’ board at the company’s 2022 annual meeting, nominating a slate of seven directors.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Value of Glenview Capital’s 13F Position: $64.6 million
Number of Hedge Fund Shareholders: 282
Amazon.com, Inc. (NASDAQ:AMZN) hit a record high in hedge fund ownership during Q4, as 282 funds in our database were long AMZN. That included Larry Robbins’ Glenview Capital, which made Amazon its biggest new portfolio addition of Q4, buying 19,375 shares.
Amazon.com, Inc. (NASDAQ:AMZN) struggled to put up big numbers in Q4 against its tough 2020 comps, growing North American online sales by just 9% during the quarter, while its operating income profit from a year earlier became a loss in 2021. On the other hand, Amazon’s Web Services continued to excel, offsetting some of the stumbles from the e-commerce side of Amazon’s business. AWS grew sales by 37% year-over-year in 2021 to $62.2 billion, while achieving a hefty operating margin of 29.8%.
In it Q4 2021 investor letter, Davis New York Venture Fund expressed some consternation over unproven and unprofitable growth companies trading at exceptional valuations compared to dominant companies like Amazon.com, Inc. (NASDAQ:AMZN). Here is what the fund had to say:
“Within the traditional growth category, growing euphoria has led to bubble prices for many companies, most especially those with new and unproven business models such as those discussed above. In contrast, our research focuses on a select handful of proven growth stalwarts whose shares still trade at reasonable valuations. For example, because of concerns about future litigation and regulation, several dominant internet businesses, including Amazon, trade at steep discounts to many unproven and unprofitable growth darlings that, in our view, trade at euphoric prices. While we expect a continued barrage of negative headlines around the company, as well as increased regulation in the years ahead, we do not expect a significant decline in its long-term profitability.”
For more on the latest trades made by some of the biggest hedge fund managers in the world, check out 10 Finance Stocks to Buy During Interest Rate Hikes and 10 Blue Chip Stocks in Warren Buffett’s Portfolio.
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Disclosure: None. Top 9 Stocks Billionaire Larry Robbins Just Added to His Portfolio is originally published at Insider Monkey.
