Tracking Larry Robbins' Glenview Capital Management Portfolio - Q3 2018 Update

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Includes: ABC, AET, AGN, ALB, ANTM, APTV, ARMK, BHC, BKD, CAR, CBS, CHTR, CI, CNDT, CVS, DLPH, DLTR, DWDP, DXC, EBAY, ENDP, ESRX, FBHS, FDC, FDX, FLEX, FMC, GOOG, GOOGL, HCA, HOLX, HPE, HTZ, IQV, LBTYA, LBTYK, LH, LOW, LYB, MCK, MHK, MIK, MSFT, MTOR, NUAN, NVT, NWL, NXPI, PAH-OLD, PNR, SHPG, SYMC, THC, TMO, UHS, VER, WBA, WMB, WP
by: John Vincent
Summary

Glenview Capital Management’s 13F portfolio value increased from $14.66B to $15.74B this quarter. The number of positions increased from 49 to 56.

Larry Robbins increased Hologic and Aramark while reducing Shire plc and Walgreens Boots Alliance during the quarter.

The top three positions are Express Scripts, FMC Corp., and Aetna, and they add up to ~15% of the portfolio.

This article is part of a series that provides an ongoing analysis of the changes made to Larry Robbins' 13F portfolio on a quarterly basis. It is based on Robbins' regulatory 13F Form filed on 11/14/2018. 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 Q2 2018.

This quarter, Robbins' 13F portfolio value increased ~7% from $14.66B to $15.74B. The number of holdings increased from 49 to 56. The top five positions are Express Scripts (NASDAQ:ESRX), FMC Corp. (NYSE:FMC), Aetna Inc. (NYSE:AET), Iqvia Holdings (NYSE:IQV), and McKesson Corp. (NYSE:MCK). Together they are at ~23% of the 13F assets.

Stake Disposals:

Pentair plc (PNR): PNR was a very small ~1% portfolio stake disposed this quarter.

New Stakes:

NXP Semiconductors (NXPI), Nuance Communications (NUAN), Symantec Corp (SYMC), Dollar Tree (DLTR), Worldpay Inc. (NYSE:WP), Bausch Health Group (BHC), LyondellBasell Industries (LYB), and Albemarle Corp. (ALB): These are very small (less than ~1% of the portfolio each) positions established this quarter.

Stake Decreases:

Iqvia Holdings (IQV) previously Quintiles IMS: The fairly large 4.36% IQV 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 & IMS that closed in October. The stock is now at ~$118. There was a 30% increase in Q2 2017 at prices between $78 and $91. Last four quarters have seen a combined ~40% selling at prices between $95 and $130.

DowDuPont (DWDP) previously Dow Chemical: DWDP is a fairly large 4.10% 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 first three quarters of 2017 had seen a ~160% stake increase at prices between $52 and $65. The stock currently trades at $56.43. Last four quarters have seen a ~38% reduction at prices between $52 and $77.

Note: In December 2015, Dow Chemical and DuPont announced a merger of equals. That transaction closed last September. DuPont shareholders received DowDuPont shares in the ratio 1:1.282. Glenview had a small position in DuPont.

HCA Healthcare (HCA): HCA is currently at 3.83% 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 had seen a combined ~60% reduction at prices between $56 and $92. Q4 2015 saw an about turn: ~160% increase at prices between $64 and $79. The stock currently trades at ~$135. There was a ~20% selling in Q4 2017 at prices between $74 and $90 and that was followed with a ~64% reduction over the last two quarters at prices between $95 and $140.

Thermo Fisher Scientific (TMO): The 3.43% TMO position has been in the portfolio for over a decade. The original stake was a fairly large ~7% of the portfolio position purchased in 2006 in the mid-30s price range. The position wavered but by Q4 2014, the stake was still at ~7% of the portfolio. Q1 2015 saw a ~40% reduction at prices between $123 and $138. H1 2016 had also seen a ~50% selling at prices between $122 and $154. There was a one-third increase in Q4 2016 at prices between $140 and $159 while the following quarter saw a ~20% selling at prices between $141 and $161. The stock is now at ~$235. Q4 2017 saw a ~22% increase at prices between $182 and $200 while the last three quarters saw a one-third reduction at prices between $193 and $249.

First Data Corp. (FDC): FDC is a 3.42% portfolio position that saw a ~125% increase in H2 2017 at prices between $16 and $19. The stock is now at $17.45. There was a ~7% trimming in Q1 2018 while last quarter saw a ~5% increase. There was a ~18% selling this quarter at prices between $21 and $26.

Shire plc (SHPG): SHPG is currently at 3.38% of the portfolio. The position was established in Q1 2017 at prices between $162 and $186 and increased by ~70% in Q2 2017 at prices between $162 and $190. The following quarter saw a huge ~240% stake increase at prices between $141 and $170. The stock is now at $177. There was a ~5% increase in Q1 2018. Last quarter saw a ~17% selling at prices between $148 and $173 and that was followed with a ~40% reduction this quarter at prices between $166 and $181.

Note: Takeda Pharmaceutical is acquiring Shire plc in a cash-and-stock deal valued at ~$194 per share ($30.33 cash and 1.678 Takeda ADSs for each ordinary share - SHPG represents three ordinary shares).

DXC Technology (DXC) previously Computer Sciences Corp: DXC is a ~3% portfolio stake. It was established in Q1 2016 at prices between $27 and $34. The stock is now at ~$58. Last four quarters have seen a combined ~38% selling at prices between $75 and $96.

Note: Computer Sciences Corporation and Hewlett Packard Enterprise (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 2017. Terms called for CSC shareholders to receive one share of DXC for each CSC share held.

Newell Brands (NWL): NWL is a 2.50% portfolio position established in Q4 2017 at prices between $28 and $44 and increased by ~50% next quarter at prices between $25 and $32. The stock currently trades below those ranges at $21.74. Last quarter saw a ~23% selling at prices between $23 and $28. There was a ~3% trimming this quarter.

Note: Robbins controls ~4.5% of Newell Brands.

eBay Inc. (EBAY): EBAY was a minutely small 0.37% position in Q1 2017. The following quarter saw a ~450% increase at prices between $32 and $36. The stock is currently below that range at $28.44 and the stake is at 2.43% of the portfolio. There was a ~13% selling in Q1 2018 while last quarter saw a ~4% increase. There was a ~3% trimming this quarter.

Alphabet Inc. (GOOG) (GOOGL): GOOG is a 2.40% stake purchased in Q1 & 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. Q1 2017 saw a ~17% selling at prices between $786 and $852. Last three quarters had also seen a combined ~45% reduction at prices between $951 and $1176. The stock is now at $1024. There was a ~5% trimming this quarter.

Universal Health Services (UHS): The 2.27% UHS stake saw a ~17% increase in Q3 2017 and that was followed with a ~80% increase in the following quarter at prices between $96 and $115. The stock is currently at ~$132. There was a ~28% reduction last quarter at prices between $111 and $122. This quarter saw a ~5% trimming.

Allergan plc (AGN): AGN is a ~2% position purchased in Q4 2017 at prices between $163 and $211 and increased by one-third next quarter at prices between $144 and $188. There was a ~16% stake increase last quarter at prices between $144 and $175. The stock is now at ~$154. This quarter saw a ~6% trimming. For investors attempting to follow Robbins, AGN is a good option to consider for further research.

Walgreens Boots Alliance (WBA): The 1.79% portfolio stake was built in Q4 2017 at prices between $64.50 and $77. There was a ~20% stake increase next quarter at prices between $63 and $80. The stock is now at ~$81. Last two quarters have seen a ~52% selling at prices between $60 and $74.

Cigna Corporation (CI): CI is a very long-term 1.63% 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 ~$211. 2017 saw a ~54% combined reduction at prices between $135 and $210 and that was followed with a ~55% selling over the last three quarters at prices between $164 and $226.

Note: Anthem agreed to acquire Cigna in July 2015 in a cash-and-stock deal valued at $188 per share ($103.40 cash). DOJ had filed a lawsuit to block the deal and in early February 2017 the Judge ruled in the government's favor. Anthem terminated the merger-deal in May 2017. This March, Cigna agreed to acquire Express Scripts (see details under Express Scripts above).

CBS Corporation (CBS): The 1.56% 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 & Q3 2015 at prices between $39 and $63. The position has since wavered. Recent activity follow: 2017 saw a combined ~32% increase at prices between $55 and $69. There was a ~3% trimming in Q1 2018 and that was followed with a ~35% reduction over the last two quarters at prices between $49 and $59. The stock is now at $53.92.

Williams Companies (WMB): WMB is a small 1.48% portfolio position that saw a combined ~60% increase in H2 2017 at prices between $27 and $32 and it is now at $24.54. This quarter saw a ~11% trimming.

Flex Ltd. (FLEX), previously Flextronics International: FLEX is a 1.47% of the 13F portfolio position. It is a very long-term stake first purchased in 2009 at a very low cost-basis. The original position was sold down by ~60% by Q2 2017 realizing large gains. The stock currently trades at $8.25. There was a ~17% reduction in Q1 2018 at prices between $16 and $19.70 and that was followed with a ~47% selling this quarter at prices between $12.90 and $15.25.

Endo International plc (ENDP): The bulk of the 1.39% ENDP position was purchased in Q1 2017 & Q4 2017 at prices between $6 and $17. It currently trades at $12.64. There was a 42% selling this quarter at prices between $9.75 and $17.25.

Note: Glenview controls ~5.3% of Endo International plc.

AmerisourceBergen Corp. (ABC), Aptiv plc (APTV), Delphi Technologies (DLPH), Hertz Global (HTZ), Michaels Companies (MIK), Laboratory Corp of America Holdings (LH), Lowe's Companies (LOW), nVent Electric (NVT), and VEREIT (VER): These small stakes (less than ~1% of the portfolio each) were reduced this quarter.

Note: Glenview controls ~6% of Hertz Global.

Stake Increases:

Express Scripts (ESRX): ESRX is a 5.19% of the portfolio stake established in Q1 2018 at prices between $68 and $81 and the stock currently trades at $96.81. There was a ~50% stake increase last quarter at prices between $68 and $82 and that was followed with a ~23% increase this quarter at prices between $74 and $95.

Note: In March, Cigna agreed to acquire Express Scripts in a cash-and-stock deal ($48.75 cash and 0.2434 shares of the combined business for each share held).

FMC Corporation (FMC): FMC is a top three 4.72% 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 $79.68. H1 2017 had seen a one-third increase at prices between $70 and $77 while the three quarters through Q1 2018 saw a combined ~22% reduction at prices between $73 and $98. There was a similar reduction last quarter at prices between $75 and $92. This quarter saw a ~6% increase.

Note 2: Glenview controls ~6% of FMC.

Aetna Inc. (AET): AET is a large (top three) 4.65% of the 13F 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 has wavered. Recent activity follow: Q4 2017 saw a ~25% selling at prices between $151 and $183 while the last two quarters have seen a combined ~27% increase at prices between $168 and $206. The stock currently trades at ~$205.

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 2017. Soon after, Aetna & Humana dropped their merger plans. In December last year, CVS agreed to acquire Aetna in a $204 per share cash-and-stock deal ($145 cash and 0.8378 CVS share for each share held).

Note 2: AET has seen a couple of roundtrips 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.

McKesson Corp. (MCK): The large (top five) 4.10% MCK stake saw a ~130% increase in Q3 2017 at prices between $146 and $168 and that was followed with a ~40% increase the following quarter at prices between $135 and $163. There was another ~16% increase in Q1 2018 at prices between $139 and $177 and that was followed with a ~7% increase last quarter. The position was first purchased in Q4 2016 and built up over the next two quarters at prices between $124 and $167. The stock is now at $121. This quarter saw a ~3% increase. For investors attempting to follow, MCK is a good option to consider for further research.

CVS Health (CVS): CVS is a 3.31% portfolio position established in Q3 2017 and increased by ~400% the following quarter at prices between $66.75 and $81. There was a ~14% increase in Q1 2018 at prices between $60.50 and $83.50. The stock is now at $75.18. Last quarter saw a ~22% reduction at prices between $60.50 and $70 while this quarter there was a similar increase at prices between $63.75 and $80.

Aramark (ARMK): The 2.28% ARMK position saw a ~150% stake increase in Q1 2018 at prices between $38 and $46 and another ~90% increase over the last two quarters at prices between $36.50 and $43. It is currently near the low end of those ranges at $36.41.

Anthem Inc. (ANTM): ANTM is a 2.24% of the 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. 2017 saw a ~48% combined reduction at prices between $144 and $232. There was a ~58% selling over H1 2018 at prices between $216 and $258. The stock currently trades at ~$281. Robbins is realizing gains. This quarter saw a marginal increase.

Hologic (HOLX), Microsoft Corporation (MSFT), and Fortune Brands (FBHS): These three positions were established last quarter and increased this quarter. The 2.17% HOLX stake was purchased at prices between $36.50 and $40.50 and increased by a whopping ~575% this quarter at prices between $38 and $43. The stock is now at $42.47. The ~1% MSFT position was purchased at prices between $88.50 and $111 and it currently trades at $103. This quarter saw a ~13% increase. The small 0.81% FBHS stake was established at prices between $54 and $60 and increased by ~50% this quarter at prices between $52 and $58. It is now well below those ranges at $43.20.

FedEx Corp (FDX), Avis Budget (CAR), and Brookdale Senior Living (BKD): These three positions saw reductions last quarter but were increased this quarter. The 2.16% FDX stake saw a ~20% increase at prices between $228 and $256 and it currently trades at $223. The small 0.81% CAR position saw a ~12% increase this quarter. The very small 0.65% BKD position saw a marginal increase this quarter.

Note: Glenview controls ~5% of Brookdale Senior Living.

Charter Communications (CHTR): The 1.29% CHTR stake saw a ~190% increase last quarter at prices between $261 and $317. It saw a ~18% further increase this quarter at prices between $275 and $333. The stock is currently at ~$309.

Conduent Inc. (CNDT), Meritor Inc. (MTOR), and Mohawk Industries (MHK): These very small stakes (less than ~1% of the portfolio each) saw increases this quarter.

Kept Steady:

Tenet Healthcare (THC): THC is a 3.23% 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. Last two quarters of 2015 saw a combined ~20% increase at prices between $27 and $61. The stock currently trades at $22.47.

Note: Glenview has a 17.77% ownership stake in THC. In August 2017, Glenview's two directors resigned from THC's board citing irreconcilable differences. In March, Tenet's board reached an agreement with Glenview whereby they agreed to vote in favor of the board's nominees in return for byelaw amendments.

Liberty Global (LBTYA) (LBTYK): Liberty Global is a ~2% of the 13F portfolio position established in Q2 2014. The following quarter saw the stake tripled in the high-30s price range. The position has wavered. Recent activity follow: H1 2018 saw a combined ~18% selling at prices between $26.50 and $36.70. The stock currently trades at $24.07.

Note: The prices quoted above are adjusted for the Liberty LiLac tracking stock distribution in June 2016.

Platform Specialty Products (PAH-OLD) and Citigroup WTS: These very small (less than ~1% of the portfolio each) stakes remained steady this quarter.

The spreadsheet below highlights changes to Robbins' 13F stock holdings in Q3 2018:

Larry Robbins - Glenview Capital Management - Q3 2018 13F Report

Disclosure: I am/we are long BHC, DWDP, NWL, NXPI, 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.