Tracking Larry Robbins' Glenview Capital Management Portfolio - Q2 2019 Update

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Includes: ABC, ANTM, BAX, BHC, BKD, CAR, CBS, CI, CNC, DIS, DLPH, DVA, DXC, ENDP, ESI, FDC, FISV, FLEX, FMC, GOOG, GOOGL, HCA, HOLX, HPE, HTZ, HUM, IQV, JBL, LBTYA, LBTYK, LOW, LTHM, LYB, MCK, MSFT, MTOR, NUAN, NVT, NXPI, TAK, THC, TMO, TMUS, TSG, UHS, UNH, UNVR, URI, WCG, WMB, WP
by: John Vincent
Summary

Glenview Capital Management’s 13F portfolio value decreased from $11.21B to $11.03B this quarter. The number of positions increased from 44 to 47.

Larry Robbins increased Cigna, HCA Holdings, and Humana, while reducing Thermo Fisher Scientific and Microsoft.

The top three positions are CIGNA, HCA Holdings, and Iqvia Holdings, 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 08/14/2019. 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 Q1 2019.

This quarter, Robbins’ 13F portfolio value decreased marginally, from $11.21B to $11.03B. The number of holdings increased from 44 to 47. The top five positions are CIGNA Corp. (CI), HCA Healthcare (HCA), Iqvia Holdings (IQV), FMC Corp. (FMC), and McKesson Corp. (MCK). Together, they are at ~30% of the 13F assets.

Stake Disposals

Hertz Global (HTZ) and Stars Group Inc. (TSG): These minutely small (less than ~0.50% of the portfolio each) positions were disposed this quarter.

New Stakes

UnitedHealth Group (UNH), T-Mobile US (TMUS), and United Rentals (URI): These are the three new stakes this quarter. The 1.61% UNH position was purchased at prices between $217 and $252, and the stock currently trades at $234. TMUS is a small 0.80% of the portfolio stake established at prices between $69 and $78, and it is now at $78.05. The minutely small 0.50% URI position was purchased at prices between $110 and $141, and the stock is now at $113.

Stake Decreases

Iqvia Holdings (previously Quintiles IMS): The large (top-three) 5.65% 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 ~$155. 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 next quarter there was a minor increase. Last quarter saw a ~27% selling at prices between $110 and $145, and that was followed with marginal trimming this quarter.

FMC Corporation: FMC is a top-five 5.62% 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. In recent activity, H1 2018 saw a ~25% reduction at prices between $73 and $98, and that was followed with an ~18% selling this quarter at prices between $71 and $85. The stock is now at $86.33.

Note: Glenview controls ~5.5% of FMC.

McKesson Corp.: The large, top-five 5.49% 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 ~$138. The last few quarters had seen only minor adjustments. For investors attempting to follow, MCK is a good option to consider for further research. This quarter saw an ~8% trimming.

DXC Technology (DXC) (previously Computer Sciences Corp.): DXC is a fairly large 5.47% of the portfolio stake. The position 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 next quarter, the stake was almost doubled at prices between $50 and $94. The stock is now at $33.22. Last quarter also saw a ~20% stake increase at prices between $53 and $69. There was marginal trimming this quarter.

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. The terms called for CSC shareholders to receive one share of DXC for each CSC share held.

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. Q4 2018 also saw a ~20% further increase at prices between $37.75 and $45. The stock is now at $49.37. Last quarter saw a ~9% increase, while this quarter there was similar trimming.

First Data Corp (FDC): First Data Corp. was a 3.41% portfolio position that saw a ~125% increase in H2 2017 at prices between $16 and $19. Q3 2018 saw a ~18% selling at prices between $21 and $26, while next quarter, there was a similar increase at prices between $15.50 and $24.50. Last quarter saw a ~45% reduction at prices between $16 and $27, and that was followed with a ~5% trimming this quarter.

Note: In January, Fiserv (FISV) agreed to acquire FDC in an all-stock deal (0.303 shares of FISV for each share of FDC held), and that transaction closed last month.

LyondellBasell Industries (LYB): LYB is a 3.23% of the portfolio position purchased in Q3 2018 and built over the next two quarters at prices between $78.50 and $116. The stock currently trades below the low end of that range at $77.38. This quarter saw a ~4% trimming.

Alphabet Inc. (GOOG, GOOGL): GOOG is a 2.90% 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 $1188. Q4 2018 saw a ~40% stake increase at prices between $976 and $1203, while last quarter there was a ~9% trimming. This quarter saw a ~27% selling at prices between $1036 and $1288.

Liberty Global (LBTYA, LBTYK): Liberty Global is a 2.23% 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. In recent activity, H1 2018 saw a combined ~18% selling at prices between $26.50 and $36.70, and that was followed with a ~10% trimming in Q4 2018. The stock currently trades at $26.12. Last quarter saw a marginal stake increase, while this quarter there was a ~6% trimming.

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

Anthem Inc. (ANTM): ANTM is a 2.23% 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 in Q4 2018 at prices between $249 and $296. The stock currently trades at ~$262. There was a ~17% stake increase last quarter, while this quarter there was similar selling.

NXP Semiconductors (NXPI): NXPI is a 2.11% of the portfolio position first purchased in Q3 2018 at prices between $89 and $110, and built over the next two quarters at prices between $68 and $97. The stock is now at ~$102. This quarter saw a ~25% selling at prices between $88 and $108.

Universal Health Services (UHS): The 2.11% UHS stake saw a ~17% increase in Q3 2017, and that was followed with an ~80% increase in the following quarter at prices between $96 and $115. The stock is currently at ~$145. There was a ~28% reduction in Q2 2018 at prices between $111 and $122, and that was followed with a similar reduction in Q4 2018 at prices between $113 and $138. This quarter also saw a ~13% trimming.

Thermo Fisher Scientific (TMO): The 1.47% 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. In recent activity, 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 ~$287. There was another ~53% selling over the last two quarters at prices between $212 and $296. Robbins is harvesting gains.

AmerisourceBergen Corp. (ABC), Avis Budget (CAR), Baxter International (BAX), Flex Ltd. (FLEX), Livent Corp. (LTHM), Lowe’s Companies (LOW), Meritor Inc. (MTOR), Microsoft Corporation (MSFT), nVent Electric (NVT), and Williams Companies (WMB): These small (less than ~2% of the portfolio each) positions were reduced this quarter.

Note: Glenview controls ~4% of Avis Budget, ~6% of Endo International plc (ENDP), ~4% of Flex Ltd., and ~9% of Meritor Inc.

Stake Increases

Cigna Corporation: CI is a very long-term ~7% stake that has been in the portfolio since 2007. It is currently their largest 13F position. The position has wavered. In recent activity, Q4 2018 saw a ~140% increase at prices between $178 and $225, and that was followed with a ~47% increase last quarter at prices between $160 and $200. The stock is now below their recent purchase price ranges at $154. This quarter also saw a ~13% stake increase.

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 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.

HCA Healthcare: HCA is a large top-three position at ~6% of the portfolio. The original stake was from 2011, when 8.8M shares were purchased at a cost basis in the low $20s. The position has wavered. In recent activity, the four quarters thru Q3 2018 had seen a combined ~70% selling at prices between $75 and $140. This quarter saw a ~20% stake increase at prices between $112 and $135. The stock is now at $120.

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 $16.86. This quarter saw a marginal increase.

Humana Inc. (HUM): The 4.23% HUM stake was established in Q4 2018 at prices between $273 and $354, and increased by ~600% last quarter at prices between $263 and $310. There was another one-third stake increase this quarter at prices between $233 and $277. The stock currently trades below those ranges at $283.

Tenet Healthcare (THC): THC is a 3.35% 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 at $21.65. The last two quarters have seen marginal increases.

Note 1: Regulatory filings since the quarter ended show them owning 19.44M shares (~19% of the business). This is compared to 17.9M shares in the 13F report. The increase happened at an average price of ~$20 per share.

Note 2: 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.

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 next two quarters at prices between $17.50 and $28.50. The stock is now at $21.34. There was a ~4% further increase this quarter.

CBS Corporation (CBS): The 1.88% 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. The position has since wavered. In recent activity, 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 $42.06. The last three quarters have seen only minor adjustments.

Centene Corp. (CNC), DaVita Inc. (DVA), and Walt Disney (DIS): These three positions established last quarter saw large increases this quarter. The very small 0.70% CNC stake was purchased last quarter at prices between $52 and $66, and doubled this quarter at prices between $47 and $58. The stock currently trades at $46.62. DVA is a 1.65% portfolio position built over the last two quarters at prices between $43.50 and $59.25, and it is now at $56.37. The 2.38% DIS stake was established last quarter at prices between $106 and $115. This quarter saw a ~160% stake increase at prices between $112 and $142. The stock currently trades at ~$137.

Brookdale Senior Living (BKD), Delphi Technologies (DLPH), Endo International plc, Nuance Communications (NUAN), Univar Inc. (UNVR), WellCare Health Plans (WCG), and Worldpay Inc. (WP): These very small (less than ~1.5% of the portfolio each) positions were increased during the quarter.

Note: Glenview controls ~10% of Brookdale Senior Living.

Kept Steady

Element Solutions (ESI) (previously Platform Specialty Products) and Jabil Inc. (JBL): These small (less than ~1% of the portfolio each) positions were kept steady this quarter.

The spreadsheet below highlights changes to Robbins’ 13F stock holdings in Q2 2019:

Larry Robbins - Glenview Capital - Q2 2019 13F Report Q/Q Comparison

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.