Investing Like Glenview Capital Management: A Look at Recent Filings

by: NakedValue

Glenview Capital Management was founded ten years ago by Larry Robbins, formerly of Omega Advisors. At the end of 2010, they have $5 billion in assets under management. In their most recent investor letter, Glenview Capital Management discussed the investment theses for their long positions and revealed that they have broadened their short positions.

Based on their most recent form 13F filing, some of their largest positions as of 12/31/2010 were:

  • American International Group (NYSE:AIG)
  • Aon Corp (NYSE:AON)
  • Cigna Corp (NYSE:CI)
  • Citigroup Inc (NYSE:C)
  • CVS Caremark (NYSE:CVS)
  • Davita Inc (NYSE:DVA)
  • Express Scripts Inc (NASDAQ:ESRX)
  • Fidelity National Information Services (NYSE:FIS)
  • Flextronics International (NASDAQ:FLEX)
  • Hewlett Packard (NYSE:HPQ)
  • Life Technologies Corp (NASDAQ:LIFE)
  • McKesson Corp (NYSE:MCK)
  • Target Corp (NYSE:TGT)
  • Thermo Fisher Scientific (NYSE:TMO)
  • Tyco International (NYSE:TYC)
  • Xerox Corp (NYSE:XRX)

Among these positions, Robbins highlights healthcare companies, AON Corp, McKesson and Tyco International.

American International Group

Bruce Berkowitz has been the most vocal but he's not the only prominent shareholder. The company continues to face headwinds after selling off Alico and a controlling stake in AIA, but as we wrote in a previous article, the company is statistically cheap based on price/book and normalized earnings. The biggest concerns relate to AIG's reserve and pricing policy. The company has had a mixed record on this issue. For more on these concerns and our back of the envelope estimate of the company's value, see Investors Need to be Very Cautious About 'Cheap' AIG. Also, if you are interested in investing in American International Group, you may want to take a closer look at the long dated AIG warrants that were issued to shareholders as part of the company's reorganization. These warrants appear to be underpriced compared to the long dated TARP warrants of long banks like JP Morgan (NYSE:JPM) and Bank of America (NYSE:BAC). For more information on the AIG warrants, please see AIG Warrants Still Trade Cheap vs Peers.

AON Corp

While Glenview's AON Corp investment thesis is related to the company's recent acquisition of the human resource consulting firm, Hewitt Associates, Marsh & McLennan Companies is a competitor that investors should consider. With a forward P/E of 13.99, a price/book of 2.51 and trailing operating margins of 8.9%, MMC is not an expensive stock. On top of that, the industry could benefit from speculation that the crisis in Japan could represent a turning point for what has been a very soft insurance and reinsurance market.

Investors interested in Cigna Corp. should also consider Aetna (NYSE:AET), Humana Inc (NYSE:HUM), WellPoint (WLP) and Unitedhealth Group (NYSE:UNH).

Mkt Cap Forward P/E Price/Book (mrq) ROA (ttm)
Cigna Corp $11.6 B 8.20 1.74 2.92%
Aetna Inc $14.2 B 8.75 1.42 4.57%
Humana Inc $11.2 B 9.90 1.61 7.66%
WellPoint $26.1 B 9.46 1.09 5.86%
Unitedhealth Group $47.9 B 10.41 1.84 8.23%

Because of the regulatory nature of the industry, the companies will be largely affected by the same macro factors.


Citigroup has been a popular holding among famous fund managers such as Bill Ackman, Bruce Berkowitz and David Tepper. Bullish Citigroup investors should also consider Citigroup's TARP warrants, class A and class B. The class A warrants have an exercise price of $10.61 and the class B warrants have an exercise price of $17.85. Like many of the other TARP warrants, the hidden value for investors is that they explicitly protect holders from cash dividend dilution. For more information about the dividend protection feature, please read our article entitled TARP Warrants: Hidden Value Among the Mega-Banks.


While McKesson is Glenview's favorite stock in the industry, like the other healthcare stocks, industry names have traded with similar valuations. Investors may also want to consider: Cardinal Health (NYSE:CAH), AmerisourceBergen (NYSE:ABC) and Owens & Minor Inc (NYSE:OMI). As a much smaller player, Owens & Minor could suffer vs. competition from its larger peers but it could also be an acquisition target at some point.

Mkt Cap Forward P/E Price/Book (mrq) ROA (ttm)
McKesson Corp $20.2 B 14.16 2.86 4.39%
AmerisourceBergen $10.8 B 14.29 3.61 4.93%
Cardinal Heath $14.5 B 13.87 2.62 4.16%
Owens & Minor $2.0 B 14.17 2.32 7.01%


In their investor letter, Glenview states that they added short positions in REITs and cruise liners. Among REITs, investors should watch Boston Properies (NYSE:BXP), Vornado Realty (NYSE:VNO), Simon Property Group (NYSE:SPG) and General Growth Properties (NYSE:GGP). This position pits Glenview against famous asset managers Pershing Square and Brookfield Asset Management who gained recent publicity for their successful investments in General Growth Properties. Their General Growth Properties thesis was centered on their belief that GGP should trade at a similar capitalization rate as Simon Property Group. While the cost basis of their position is much lower than current prices, as of the most recent filings, both Brookfield and Pershing have not reduced their holdings.

Among cruise operators, investors should watch Carnival Cruise (NYSE:CCL) and Royal Carribean (NYSE:RCL). Carnival trades at a forward P/E of 11.75 and Royal Carribean trades at a forward P/E of 10.40 so neither are numerically expensive, but there are persistant concerns about the strength of the consumer amid high unemployement and rising energy prices. In addition, cruise lines have had to abruptly change itineraries to avoid regional unrest. During Carnival's most recent conference call, CEO Micky Arison stated that it was too early to judge the full impact of the events of itinerary changes and cancellations and that the company is confident they can fill capacity despite raising cruise prices from last year.

Financial data and ratios are from Yahoo Finance.

Disclosure: I am long C, GGP and AIG warrants