Tracking Larry Robbins' Glenview Capital Management Portfolio - Q4 2018 Update

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Includes: ABC, AGN, ALB, ANTM, APTV, ARMK, BAX, 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, HUM, IQV, LBTYA, LBTYK, LH, LOW, LTHM, LYB, MCK, MHK, MIK, MSFT, MTOR, NUAN, NVT, NWL, NXPI, SHPG, SYMC, THC, TMO, UHS, VER, WBA, WMB
by: John Vincent
Summary

Glenview Capital Management’s 13F portfolio value decreased one-third from $15.74B to $10.33B this quarter. The number of positions decreased from 56 to 47.

Larry Robbins increased DXC Technology and Alphabet while reducing Thermo Fisher Scientific and eBay during the quarter.

The top three positions were Shire plc, FMC Corp, and Iqvia Holdings 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’ 13F portfolio on a quarterly basis. It is based on Robbins’ regulatory 13F Form filed on 02/14/2019. 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 Q3 2018.

This quarter, Robbins’ 13F portfolio value decreased one-third from $15.74B to $10.33B. The number of holdings decreased from 56 to 47. The top five positions were Shire plc, FMC Corp, Iqvia Holdings, HCA Holdings, and CIGNA. Together they are at ~32% of the 13F assets.

Stake Disposals:

Newell Brands (NWL): NWL was 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 $16.17. Q2 2018 saw a ~23% selling at prices between $23 and $28 and that was followed with the disposal this quarter at prices between $15.40 and $24. Glenview realized losses.

Note: Robbins had a ~4.5% ownership stake in Newell Brands as of last quarter.

Aetna Inc. (AET): AET was 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 had wavered. In December 2017, 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) and that transaction closed in November, thereby eliminating this position.

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.

Note 2: AET had seen a couple of roundtrips in the portfolio over 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 the following year.

Express Scripts (ESRX): ESRX was a 5.19% of the portfolio stake established in Q1 2018 at prices between $68 and $81. There was a ~50% stake increase next quarter at prices between $68 and $82 and that was followed with a ~23% increase last quarter at prices between $74 and $95. In March 2018, 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) and that transaction closed in December.

Charter Communications (CHTR): The 1.29% CHTR stake saw a ~190% increase in Q2 2018 at prices between $261 and $317. It saw a ~18% further increase last quarter at prices between $275 and $333. The disposal this quarter was at prices between $274 and $330. The stock is currently at ~$347.

Citigroup WTS , Dollar Tree (DLTR), Fortune Brands (FBHS), Laboratory Corp of America Holdings (LH), Michaels Companies (MIK), Mohawk Industries (MHK), Symantec Corp (SYMC), and Worldpay Inc. (WPAY): These are very small (less than ~1% of the portfolio each) positions disposed this quarter.

New Stakes:

Baxter International (BAX), Humana Inc. (HUM), and Livent Corp. (LTHM): These are minutely small (less than ~0.50% of the portfolio each) stakes established this quarter.

Stake Decreases:

McKesson Corp. (MCK): The large 4.84% MCK stake was first purchased in Q4 2016 and built up over the next two quarters at prices between $124 and $167. The position 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. The stock is now near the low end of those ranges at ~$125. Last few quarters have seen only minor adjustments. For investors attempting to follow, MCK is a good option to consider for further research.

DowDuPont (DWDP) previously Dow Chemical: DWDP is a fairly large 4.62% 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 $53.34. Last five quarters have seen a ~45% reduction at prices between $51 and $77.

Thermo Fisher Scientific (TMO): The 2.55% 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 has wavered. Recent activity follow: Q4 2017 saw a ~22% increase at prices between $182 and $200 while the last four quarters saw a ~64% reduction at prices between $190 and $250. The stock is now at ~$264.

Anthem Inc. (ANTM): ANTM is a 2.22% 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% reduction at prices between $144 and $232. There was a ~58% selling over H1 2018 at prices between $216 and $258 and that was followed with a one-third selling this quarter at prices between $249 and $296. The stock currently trades at ~$308. Robbins is realizing gains.

Universal Health Services (UHS): The 2.22% 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 ~$141. There was a ~28% reduction in Q2 2018 at prices between $111 and $122 and that was followed with a similar reduction this quarter at prices between $113 and $138.

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 and that was followed with a ~10% trimming this quarter. The stock currently trades at $25.38.

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

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. This quarter saw a ~40% selling at prices between $26 and $33. The stock is currently at $37.35 and the stake is at ~2% of the portfolio.

CBS Corporation (CBS): The 1.73% 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 one-third 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 next two quarters at prices between $49 and $59. The stock is now at $50.79. This quarter also saw a ~4% trimming.

Allergan plc (AGN), AmerisourceBergen Corp. (ABC), Aptiv plc (APTV), Aramark (ARMK), Avis Budget (CAR), Conduent Inc. (CNDT), Endo International plc (ENDP), FedEx Corp (FDX), Flex Ltd. (FLEX), Hertz Global (HTZ), Lowe’s Companies (LOW), Meritor Inc. (MTOR), Microsoft Corporation (MSFT), NXP Semiconductors (NXPI), Nuance Communications (NUAN), Platform Specialty Products (PAH), VEREIT (VER), and Walgreens Boots Alliance (WBA): These very small (less than ~1.5% of the portfolio each) positions were reduced this quarter.

Note: Glenview controls ~5.6% of Avis Budget, ~2% of Endo International plc, ~3% of Flex Ltd, ~5% of Hertz Global, and ~10% of Meritor Inc.

Stake Increases:

Shire plc (SHPG): The SHPG 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. Q2 2018 saw a ~17% selling at prices between $148 and $173 and that was followed with a ~40% reduction last quarter at prices between $166 and $181. This quarter also saw a ~55% increase. Takeda Pharmaceutical acquired Shire plc in a cash-and-stock deal ($30.33 cash and 1.678 Takeda ADSs for each ordinary share – SHPG represents three ordinary shares) that closed last month. It was their largest position at 7.69% of the portfolio.

FMC Corporation (FMC): FMC is a top three 6.38% 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. The position had since been increased. Recent activity follow: H1 2018 saw a ~25% reduction at prices between $73 and $98. Last two quarters have seen minor increases.

Note 2: Glenview controls 6.62% of FMC.

IQVIA Holdings (IQV) previously Quintiles IMS: The large (top three) ~6% 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 ~$143. There was a 30% increase in Q2 2017 at prices between $78 and $91. Last four quarters had seen a combined ~40% selling at prices between $95 and $130 while this quarter there was a minor increase.

HCA Healthcare (HCA): HCA is a top five position at 5.90% 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 thru 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 ~$138. Last four quarters had seen a combined ~70% selling at prices between $75 and $140 while this quarter there was a ~13% increase.

Cigna Corporation (CI): CI is a very long-term 5.46% top-five 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. 2017 saw a ~54% reduction at prices between $135 and $210 and that was followed with similar selling over the last three quarters at prices between $164 and $226. This quarter saw an about-turn: ~140% increase at prices between $178 and $225. The stock is now at $178.

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. Last March, Cigna agreed to acquire Express Scripts and that deal closed in December.

CVS Health (CVS): CVS is a 5.39% portfolio position established in Q3 2017 and increased by ~400% the following quarter at prices between $66.75 and $81. Q2 2018 saw a ~22% reduction at prices between $60.50 and $70 while last quarter there was a similar increase at prices between $63.75 and $80. That was followed with a ~28% increase this quarter at prices between $63 and $81. The stock is now at $58.13. For investors attempting to follow Glenview, CVS is a good option to consider for further research.

DXC Technology (DXC) previously Computer Sciences Corp: DXC is a 4.74% portfolio stake established in Q1 2016 at prices between $27 and $34. Last four quarters had seen a combined ~38% selling at prices between $75 and $96 while this quarter the stake was almost doubled at prices between $50 and $94. The stock is now at $67.27.

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.

Alphabet Inc. (GOOG) (GOOGL): GOOG is a 4.51% 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. The three quarters thru Q2 2018 had also seen a combined ~45% reduction at prices between $951 and $1176. The stock is now at $1141. This quarter saw a ~40% stake increase at prices between $976 and $1203.

First Data Corp. (FDC): FDC is a 4.22% portfolio position that saw a ~125% increase in H2 2017 at prices between $16 and $19. The stock is now at $25.78. Last quarter saw a ~18% selling at prices between $21 and $26 while this quarter there was a similar increase at prices between $15.50 and $24.50.

Note: Glenview controls 4.55% of First Data Corp.

Hologic (HOLX): The ~4% HOLX stake was purchased in Q2 2018 at prices between $36.50 and $40.50 and increased by a whopping ~575% last quarter at prices between $38 and $43. This quarter also saw a ~20% further increase at prices between $37.75 and $45. The stock is now at $47.92.

Bausch Health Companies (BHC), Brookdale Senior Living (BKD), Conduent Inc. (CNDT), Delphi Technologies (DLPH), LyondellBasell Industries (LYB), nVent Electric (NVT), and Williams Companies (WMB): These very small (less than ~1% of the portfolio each) positions were increased this quarter.

Note: Glenview controls ~8% of Brookdale Senior Living.

Kept Steady:

Tenet Healthcare (THC): THC is a ~3% 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 $29.39.

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 2018, Tenet’s board reached an agreement with Glenview whereby they agreed to vote in favor of the board’s nominees in return for bylaw amendments.

Albemarle Corp. (ALB): The minutely small 0.26% ALB position was left untouched during the quarter.

The spreadsheet below highlights changes to Robbins’ 13F stock holdings in Q4 2018:

Larry Robbins - Glenview Capital - Q4 2018 13F Report Q/Q Comparison

Disclosure: I am/we are long 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.