Tracking Larry Robbins' Glenview Capital Management Portfolio - Q2 2017 Update

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Includes: AAPL, ABBV, AET, ANTM, BKD, C, CAR, CBS, CCE, CHTR, CI, DLPH, DNB, DWDP, DXC, EBAY, ENDP, FDC, FLEX, FMC, GOOG, GOOGL, HAIN, HCA, HPE, HTZ, HUM, INTC, KMI, KND, LBTYA, LBTYK, LH, LILA, LOW, MCK, MHK, MON, MRVL, MTOR, NKE, PAH, PHH, Q, RLGY, SHPG, THC, TLRD, TMO, TMUS, TSS, UHS, V, VER, WBA, WMB, WYN, ZBH
by: John Vincent

Summary

Glenview Capital Management’s 13F portfolio increased from $15.07B to $15.41B this quarter. The number of positions increased from 50 to 52.

Larry Robbins substantially increased FMC Corp. and Quintiles IMS Holdings, while reducing Humana, Aetna, and Cigna.

The top three positions are HCA Healthcare, FMC Corp., and Dow Chemical Co., and they add up to ~20% of the portfolio.

This article is part of a series that provides an ongoing analysis of the changes made to Larry Robbins' US stock portfolio on a quarterly basis. It is based on Robbins’ regulatory 13F Form filed on 08/14/2017. Please visit our Tracking Larry Robbins’ Glenview Capital Management Portfolio article for an idea on his investment philosophy and our previous update for the fund’s moves during Q1 2017.

This quarter, Robbins’ US long portfolio increased ~2% from $15.07B to $15.41B. The number of holdings increased from 50 to 52. The top five positions are HCA Healthcare (NYSE:HCA), FMC Corp. (NYSE:FMC), Dow Chemical (DOW), Quintiles IMS Holdings (NYSE:Q), and Anthem (NYSE:ANTM). Together, they are at 30.53% of the US long assets.

Stake Disposals

Intel Corporation (NASDAQ:INTC): INTC was a ~1.2% of the portfolio position established last quarter at prices between $35 and $38 and disposed of this quarter at prices between $33.50 and $37.50. The stock currently trades at $34.92.

Charter Communications (NASDAQ:CHTR): CHTR was a very small 0.82% of the portfolio remainder stake that was disposed this quarter.

T-Mobile US (NASDAQ:TMUS) and Total Systems Services (NYSE:TSS): These two minutely small (less than 0.5% of the portfolio each) positions established last quarter were eliminated this quarter.

Note: T-Mobile has seen previous round-trips in the portfolio.

New Stakes

Delphi Automotive (NYSE:DLPH), Walgreens Boots Alliance (NASDAQ:WBA), Dun & Bradstreet (NYSE:DNB), Wyndham Worldwide (NYSE:WYN), and Nike Inc. (NYSE:NKE): These are very small (less than ~1% of the portfolio each) stakes established this quarter.

Stake Decreases

Anthem Inc.: ANTM is a large ~5% of the US long portfolio position. It was established in Q4 2014 at prices between $111 and $129 and increased by just over one-third the following quarter at prices between $123 and $158. There was a ~40% increase in Q3 2016 at prices between $113 and $122, while last quarter saw a ~20% selling at prices between $143 and $169. There was another ~14% trimming this quarter. The stock currently trades at $193. Robbins is realizing gains.

Cigna Corporation (NYSE:CI): CI is a very long-term ~4% stake that has been in the portfolio since 2007. There was a ~200% increase over the last three quarters of 2015 at prices between $125 and $170. The stock is now at ~$178. Last quarter saw a ~13% trimming, and this quarter saw another ~24% reduction at prices between $147 and $171.

Note: Anthem agreed to acquire Cigna in July 2015 in a cash-and-stock deal valued at $188 per share ($103.40 cash). The DOJ had filed a lawsuit to block the deal, and in early February the judge ruled in the government’s favor. Anthem terminated the merger-deal in May.

DXC Technology (NYSE:DXC) (previously Computer Sciences Corp.): DXC is a ~4% portfolio stake. It was established in Q1 2016 at prices between $27 and $34. The past two quarters had seen a 26% combined increase at prices between $45.50 and $62.50. There was a ~4% trimming last quarter and a marginal reduction this quarter. The stock is now at $83.27. Robbins is harvesting gains.

Note: Computer Sciences Corporation and Hewlett Packard Enterprise (NYSE:HPE) had announced a spin-merger transaction whereby HPE’s Enterprise Services business was to be spun off and merged into CSC to form a new business DXC Technology. That transaction closed in April. The terms called for CSC shareholders to receive one share of DXC for each CSC share held.

Alphabet Inc. (GOOG, GOOGL): GOOG is a 3.72% stake purchased in Q1 and Q2 2015 at prices between $492 and $575. Q4 2015 saw a ~55% reduction at prices between $608 and $777, while the following quarter saw a ~63% increase at prices between $678 and $765. There was a stake doubling in Q4 2016 at prices between $736 and $813. Last quarter saw a ~17% selling at prices between $786 and $852, and that was followed with a ~3% trimming this quarter. The stock is now at $907.

Aetna Inc. (NYSE:AET): AET is a 3.26% of the US long portfolio stake. The original position was from Q4 2013, when around 1.8M shares were purchased. The following quarter saw the stake tripled at prices between $66.50 and $76. Since then, the position had seen some selling. In Q2 2015, the pattern reversed: ~60% increase at prices between $106 and $133. This quarter saw a one-third reduction at prices between $127 and $153. The stock currently trades at ~$155.

Note 1: In July 2015, Aetna agreed to acquire Humana. The DOJ sued to block the deal, and the judge sided with the government’s position in early February. Soon after, Aetna and Humana dropped their merger plans.

Note 2: AET has seen a couple of round-trips in the portfolio in the last decade. A large ~5% portfolio stake was established in 2007 and was sold in 2009. Also, a small ~1% position was purchased in 2010 and disposed of the following year.

Thermo Fisher Scientific (NYSE:TMO): The ~3% TMO position has been in the portfolio for almost a decade. The original stake was a fairly large ~7% of the portfolio position purchased in 2006 in the mid-$30s price range. 2007 saw a huge ~60% reduction, but the stake was built back up in the following years. It was their largest stake at 7.14% of the portfolio as of Q4 2014. Q1 2015 saw a ~40% reduction at prices between $123 and $138. H1 2016 had also seen a combined ~50% selling at prices between $122 and $154. There was a one-third increase in Q4 2016 at prices between $140 and $159, while last quarter saw a ~20% selling at prices between $141 and $161. The stock is now at ~$174. There was a ~7% trimming this quarter.

AbbVie Inc. (NYSE:ABBV): ABBV was a very small 0.65% of the US long portfolio position established in Q1 2015. The following quarter saw a whopping ~600% increase at prices between $57 and $71. The four quarters through Q2 2016 saw a combined ~30% reduction at prices between $50 and $70, and that was followed with a ~50% further reduction in the following quarter at prices between $62 and $67. Q4 2016 saw the pattern reverse: a ~50% increase at prices between $55.50 and $64. There was a ~20% selling last quarter at prices between $60 and $67 and another ~16% selling this quarter at prices between $63.50 and $73. The stock currently trades at $70.70. The stake is now at 2.87% of the portfolio.

Apple Inc. (NASDAQ:AAPL): The 2.36% AAPL stake was first purchased in Q3 2016 at prices between $95 and $116 and increased by a whopping ~350% the following quarter at prices between $103 and $118. The stock is now well above those ranges at $157. There was a ~20% selling this quarter at prices between $141 and $156.

Avis Budget Group (NASDAQ:CAR): CAR was a very small 0.69% of the portfolio position established in Q1 2014 in the high-$30s. It has since been built up to a ~1.38% stake. The stock currently trades at $32.30. There was a ~6% trimming this quarter.

Note: Larry Robbins controls ~9% of the business.

Humana Inc. (NYSE:HUM): The original HUM stake was from 2012, when around 2M shares were purchased at a cost basis in the mid-$70s. Q1 to Q3 2015 had seen a combined 3x increase at prices between $139 and $215. The position had wavered since. It was still their second-largest position at 7.27% of the portfolio (5.3M shares) as of last quarter. This quarter saw a ~85% reduction at prices between $206 and $241. The stock currently trades at $249. Robbins harvested huge gains.

Coca-Cola European Partners (NYSE:CCE), Hain Celestial (NASDAQ:HAIN), Marvell Technology (NASDAQ:MRVL), Meritor Inc. (NYSE:MTOR), PHH Corporation (NYSE:PHH), and Williams Companies (NYSE:WMB): These very small positions (less than ~1% of the portfolio each) saw reductions this quarter.

Stake Increases

HCA Healthcare: HCA is currently the largest position at 8.43% of the portfolio. The original stake was from 2011, when 8.8M shares were purchased at a cost basis in the low-$20s. The stake was built up to just over 12.8M shares by Q4 2013. The four quarters through Q2 2015 saw a combined ~60% reduction at prices between $56 and $92. Q4 2015 saw an about-turn: a ~160% increase at prices between $64 and $79. H2 2016 saw a ~25% increase at prices between $69.50 and $82, while last quarter saw a ~21% selling at prices between $74.50 and $90.50. The stock currently trades at $78.26. There was a marginal ~3% increase this quarter.

FMC Corporation: FMC is a top-three 6.16% of the portfolio stake established in Q1 2015 at prices between $55 and $65 and increased by ~180% the following quarter at prices between $51.50 and $61. Q3 2015 also saw a ~40% increase at prices between $33 and $52.50, and that was followed with a ~75% increase in the following quarter at prices between $34 and $43. The stock currently trades at $83.46. Last quarter saw an ~11% increase, while this quarter saw another ~23% increase at prices between $70 and $77.

Note: Glenview controls ~9.7% of FMC.

Dow Chemical: DOW is a top-three 5.82% of the portfolio stake established in Q3 2014 at prices between $51 and $55. Q1 2015 saw a stake doubling at prices between $43 and $50. The next three quarters saw another ~70% increase at prices between $42 and $57. H1 2016 saw a ~40% selling at prices between $41 and $54. The pattern reversed again in Q4 2016: the stake doubled over the last two quarters at prices between $52 and $65. This quarter saw another ~20% increase at prices between $60 and $65. The stock currently trades at $63.86.

Note: Third Point (Dan Loeb) has a huge activist position in Dow Chemical. In December 2015, Dow and DuPont announced a merger of equals, with plans to separate into three businesses after the merger. In May, Third Point came up with an alternate plan saying the existing merger plans may be leaving ~$20B on the table.

Quintiles IMS Holdings: The top-five ~5% Q stake was established in Q2 2016 at prices between $61 and $71 and increased by ~75% in the following quarter at prices between $65 and $81. There was a stake doubling in Q4 2016, primarily due to the merger transaction between Quintiles and IMS that closed in October. The stock is now at $93.08. There was a 30% increase this quarter at prices between $78 and $91.

Flex Ltd. (NASDAQ:FLEX) (previously Flextronics International): FLEX is a fairly large position at ~4% of the US long portfolio. It is a very long-term stake first purchased in 2009. Q4 2015 saw a ~27% reduction at prices between $10.50 and $12, and that was followed with a ~13% trimming in Q1 2016. Q3 2016 saw another ~20% selling at prices between $11.50 and $14, and that was followed with a ~15% selling last quarter at prices between $14 and $17. This quarter saw the pattern reverse: a ~20% increase at prices between $15 and $17.75. The stock currently trades at $15.53.

Note: Robbins controls ~7.2% of FLEX.

Lowe’s Companies (NYSE:LOW): LOW is a 3.33% portfolio position established in Q4 2016 at prices between $65.50 and $76.50 and increased by roughly one-third last quarter at prices between $71 and $84. There was another ~20% increase this quarter at prices between $76 and $86. The stock is now at $73.85.

Liberty Global (LBTYA, LBTYK): Liberty Global is a ~3% of the US long portfolio position established in Q2 2014. The following quarter saw the stake tripled in the high-30s price range. The first three quarters of 2015 saw a combined ~30% reduction at prices between $38 and $50. The pattern continued in Q4 2015: a ~30% further selling at prices between $33 and $40. H1 2016 saw an about-turn: a ~135% increase at prices between $30 and $36. There was another ~40% increase in Q4 2016 at prices between $28.50 and $33. The stock currently trades at $32.69. This quarter saw a ~7% increase. For investors attempting to follow Robbins, Liberty Global is a good option to consider for further research.

Note: The prices quoted above are adjusted for the Liberty Global LiLAC (NASDAQ:LILA) tracking stock distribution in June 2016.

CBS Corporation (NYSE:CBS): The 2.42% stake was first purchased in 2013, and a large increase happened in Q4 2014 at prices between $49 and $57. There was a ~57% further increase over Q2 and Q3 2015 at prices between $39 and $63. Q4 2015 saw an about-turn: a roughly one-third reduction over the next three quarters at prices between $39 and $58. Q3 2016 saw the pattern reverse again: an ~85% stake increase at prices between $50 and $58. There was a ~60% selling in Q4 2016 at prices between $54.50 and $65. The stock is now at $65.01. The past two quarters have seen a combined ~15% increase.

eBay Inc. (NASDAQ:EBAY): EBAY was a minutely small 0.37% position last quarter. This quarter saw a ~450% increase at prices between $32 and $36. The stock is currently at $34.24 and the stake is at ~2% of the portfolio.

Shire plc (NASDAQ:SHPG): The ~1.85% of the portfolio SHPG position was established last quarter at prices between $162 and $186 and increased by ~70% this quarter at prices between $162 and $190. The stock is now well below those ranges at $141.

Visa Inc. (NYSE:V): The 1.62% Visa position was purchased in Q4 2016 at prices between $75.50 and $83.50. There was a ~12% increase last quarter at prices between $78 and $90, and that was followed with another ~25% increase this quarter at prices between $88.50 and $96.50. The stock is now above those ranges at $103.

Brookdale Senior Living (NYSE:BKD), E. I. du Pont de Nemours and Co. (DD), First Data Corp. (NYSE:FDC), Hertz Global Holdings (NYSE:HTZ), Kindred Healthcare (NYSE:KND), McKesson Corp. (NYSE:MCK), Mohawk Industries (NYSE:MHK), Platform Specialty Products (NYSE:PAH), United Health Services (NYSE:UHS), and VEREIT Inc. (NYSE:VER): These small stakes (less than ~1.5% of the portfolio each) saw increases this quarter.

Note: Robbins controls ~6.8% of Hertz Global and ~8.2% of Brookdale Senior Living.

Kept Steady

Laboratory Corp. of America Holdings (NYSE:LH): LH is a ~2.7% of the US long portfolio position established in Q2 2015 at prices between $116 and $126 and increased by ~22% the following quarter at prices between $107 and $127. Q4 2015 saw a ~16% further increase at prices between $109 and $125. Q3 2016 saw an about-turn: a ~23% selling at prices between $131 and $141, and that was followed with a ~36% selling last quarter at prices between $129 and $144. The stock currently trades at $154.

Tenet Healthcare Corp. (NYSE:THC): THC is a 2.24% portfolio stake established in 2012 at a cost basis in the low $20s. The original position saw a ~40% increase in Q4 2013 at around $44. The last two quarters of 2015 saw a combined ~20% increase at prices between $27 and $61. The stock currently trades well below those ranges at $16.56.

Note: Glenview has a ~18% ownership stake in THC. Last week, Glenview’s two directors resigned from THC’s board citing irreconcilable differences.

Citigroup WTS (NYSE:C), Endo International plc (NASDAQ:ENDP), Kinder Morgan (NYSE:KMI), Monsanto Company (NYSE:MON), Realogy Holdings (NYSE:RLGY), Tailored Brands (NYSE:TLRD), and Zimmer Biomet Holdings (NYSE:ZBH): These very small positions (less than ~1% of the portfolio each) were kept steady this quarter.

Note: Robbins controls ~4.7% of Endo International plc and ~4.9% of Tailored Brands.

The spreadsheet below highlights changes to Robbins’ US stock holdings in Q2 2017:

Larry Robbins - Glenview Capital - Q2 2017 13F

Disclosure: I am/we are long INTC, KMI, VER.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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