Tracking Larry Robbins' Glenview Capital Management Portfolio - Q1 2019 Update

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Includes: ABC, AGN, ALB, ANTM, APTV, ARMK, BAX, BHC, BKD, CAR, CBS, CI, CNC, CNDT, CVS, DIS, DLPH, DVA, DXC, EBAY, ENDP, ESI, FDC, FDX, FLEX, FMC, GOOG, GOOGL, HCA, HOLX, HPE, HTZ, HUM, IQV, JBL, LBTYA, LBTYK, LOW, LTHM, LYB, MCK, MSFT, MTOR, NUAN, NVT, NXPI, SHPG, TAK, THC, TMO, TSG, UHS, UNVR, VER, WBA, WCG, WMB, WP
by: John Vincent
Summary

Glenview Capital Management’s 13F portfolio value increased from $10.33B to $11.21B this quarter. The number of positions decreased from 47 to 44.

Larry Robbins increased Lyondellbasell and Humana while dropping CVS Health.

The top three positions are DXC Technology, FMC Corp., and CIGNA, and they add up to ~19% 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 05/15/2019. 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 Q4 2018.

This quarter, Robbins’ 13F portfolio value increased ~9% from $10.33B to $11.21B. The number of holdings decreased from 47 to 44. The top five positions are DXC Technology (DXC), FMC Corp. (FMC), CIGNA Corp. (NYSE:CI), McKesson Corp. (MCK), and IQVIA Holdings (IQV). Together they are at ~29% of the 13F assets.

Stake Disposals:

DowDupont previously Dow Chemical: DowDupont was 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 resultant large stake was reduced by ~45% over the last five quarters at prices between $51 and $77 and the remaining stake was disposed this quarter.

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. Last quarter saw a ~40% selling at prices between $26 and $33 and the elimination this quarter was at prices between $28.25 and $37.50. The stock is currently at $36.56.

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 Q3 2018 at prices between $166 and $181. Last quarter also saw a ~55% stake 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 in January. It was their largest position at 7.69% of the portfolio.

CVS Health (CVS): CVS was 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 next quarter there was a similar increase at prices between $63.75 and $80. That was followed with a ~28% increase last quarter at prices between $63 and $81. The stock is now at $53.17. This quarter saw the position disposed at prices between $52 and $69.

Albemarle Corp. (ALB), Allergan plc (AGN), Aptiv plc (APTV), Aramark (ARMK), Conduent Inc. (CNDT), FedEx Corp. (FDX), VEREIT (VER), and Walgreens Boots Alliance (WBA): These very small (less than ~1.5% of the portfolio each) positions were eliminated this quarter.

New Stakes:

Takeda Pharma (TAK): The TAK stake came about as a result of Takeda’s acquisition of Shire plc. Glenview had a large position in Shire plc for which they received Takeda shares. They also increased the resultant stake by ~10% during the quarter at prices between $16.70 and $21.50. The stock currently trades at $16.83.

Univar Inc. (UNVR), Worldpay Inc. (WP), Walt Disney (DIS), DaVita Inc. (DVA), Centene Corp. (CNC), WellCare Health Plans (WCG), Stars Group Inc. (TSG), and Jabil Inc. (JBL): These are very small (less than ~1% of the portfolio each) new positions established this quarter.

Stake Decreases:

IQVIA Holdings previously Quintiles IMS: The large (top five) ~5% 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 and IMS that closed in October. The stock is now at ~$138. There was a 30% increase in Q2 2017 at prices between $78 and $91. The four quarters through Q3 2018 had seen a combined ~40% selling at prices between $95 and $130 while last quarter there was a minor increase. This quarter saw a ~27% selling at prices between $110 and $145.

HCA Healthcare (HCA): HCA is a fairly large position at ~5% 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 ~$125. Last four quarters thru Q3 2018 had seen a combined ~70% selling at prices between $75 and $140. There was a ~13% stake increase last quarter while this quarter saw similar selling.

Alphabet Inc. (GOOG) (GOOGL): GOOG is a 4.26% 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. Q1 2017 saw a ~17% selling at prices between $786 and $852. The three quarters through Q2 2018 had also seen a combined ~45% reduction at prices between $951 and $1176. The stock is now at $1042. Last quarter saw a ~40% stake increase at prices between $976 and $1203 while this quarter there was a ~9% trimming.

First Data Corp. (FDC): FDC is a 3.41% portfolio position that saw a ~125% increase in H2 2017 at prices between $16 and $19. The stock is now at $26.31. Q3 2018 saw an ~18% selling at prices between $21 and $26 while last quarter there was a similar increase at prices between $15.50 and $24.50. There was a ~44% reduction this quarter at prices between $16 and $27.

Thermo Fisher Scientific (TMO): The 2.40% 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 2018 saw a ~64% reduction at prices between $190 and $250. The stock is now at ~$275. There was another ~17% selling this quarter at prices between $212 and $276.

Avis Budget (CAR), Hertz Global (HTZ), Meritor Inc. (MTOR), Nuance Communications (NUAN), nVent Electric (NVT), and Williams Companies (WMB): These small (less than ~2% of the portfolio each) positions were reduced this quarter.

Note: Glenview controls ~5% of Avis Budget and ~9.5% of Meritor Inc.

Stake Increases:

DXC Technology previously Computer Sciences Corp: DXC is now the largest 13F position at 6.31% portfolio. The stake was established in Q1 2016 at prices between $27 and $34. The four quarters through Q3 2018 had seen a combined ~38% selling at prices between $75 and $96 while last quarter the stake was almost doubled at prices between $50 and $94. The stock is now at $47.84. This quarter also saw a ~20% stake increase at prices between $53 and $69.

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.

FMC Corporation: FMC is a top three 6.28% 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 three quarters have seen minor increases. The stock is now at $78.61.

Note 2: Glenview controls ~7% of FMC.

Cigna Corporation: CI is a very long term 6.28% top-three stake that has been in the portfolio since 2007. There was a ~200% stake 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 next three quarters at prices between $164 and $226. Last quarter saw an about turn: ~140% increase at prices between $178 and $225 and that was followed with a ~47% increase this quarter at prices between $160 and $200. The stock is now below their recent purchase price ranges at $154.

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.

McKesson Corp.: The large top five 5.14% 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 ~$127. Last few quarters have seen only minor adjustments. For investors attempting to follow, MCK is a good option to consider for further research.

Hologic (HOLX): The 4.65% HOLX stake was purchased in Q2 2018 at prices between $36.50 and $40.50 and increased by a whopping ~575% next quarter at prices between $38 and $43. Last quarter also saw a ~20% further increase at prices between $37.75 and $45 and that was followed with a ~9% further increase this quarter. The stock is now at $46.45.

Tenet Healthcare (THC): THC is a 2.40% 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 $21.08. This quarter saw a marginal increase.

Note: Glenview has an ~18% 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 byelaw amendments.

LyondellBasell Industries (LYB): LYB is a 3.22% of the portfolio position purchased in Q3 2018 and built over the last two quarters at prices between $78.50 and $116. The stock currently trades near the low end of that range at $80.98.

Humana Inc. (HUM): The 3.11% HUM stake was established last quarter at prices between $273 and $354 and increased by ~600% this quarter at prices between $263 and $310. The stock currently trades below those ranges at $252.

Anthem Inc. (ANTM): ANTM is a 2.61% 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 last quarter at prices between $249 and $296. The stock currently trades at ~$277. There was a ~17% stake increase this quarter.

NXP Semiconductors (NXPI): NXPI is a 2.55% of the portfolio position first purchased in Q3 2018 at prices between $89 and $110 and built over the last two quarters at prices between $68 and $97. The stock is now at $93.45.

United Health Services (UHS): The 2.46% 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 ~$121. There was a ~28% reduction in Q2 2018 at prices between $111 and $122 and that was followed with a similar reduction last quarter at prices between $113 and $138. There was a ~5% stake increase this quarter.

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 last quarter. The stock currently trades at $24.79. This quarter saw a marginal stake increase.

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

Bausch Health Group (BHC): BHC is a ~2% of the portfolio position established in Q3 2018 at prices between $20.50 and $27.50 and built over the last two quarters at prices between $17.50 and $28.50. The stock is now at $21.32.

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 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 $48.31. Last two quarters have seen only minor adjustments.

AmerisourceBergen Corp. (ABC), Baxter International (BAX), Endo International plc (ENDP), Flex Ltd. (FLEX), Livent Corp. (LTHM), Microsoft Corporation (MSFT), and Element Solutions (ESI) previously Platform Specialty Products: These small (less than ~2% of the portfolio each) positions were increased this quarter.

Note: Glenview controls ~4% each of Endo International plc and Flex Ltd.

Kept Steady:

Brookdale Senior Living (BKD), Delphi Technologies (DLPH), and Lowe’s Companies (LOW): These very small (less than ~1% of the portfolio each) positions were kept steady this quarter.

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

The spreadsheet below highlights changes to Robbins’ 13F stock holdings in Q1 2019:

Larry Robbins - Glenview Capital - Q1 2019 13F Report Q/Q Comparison

Disclosure: I am/we are long 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.