Glenview Capital Management’s 13F Stock Holdings & Strategy

Updated on January 8th, 2021 by Nikolaos Sismanis

Founded by hedge-fund manager Larry Robbins in 2000, Glenview Capital Management is a New-York-based hedge fund with around $13.2B of discretionary assets under management (AUM), counting 9 clients. Mr. Robbins founded the company after his departure from Omega Advisors. Two decades at the helm later, he still remains the CEO, having accumulated a net worth of just under $2 billion. He is also the owner of Illinois-based Hockey team, the Chicago Steel.

Investors following the company’s 13F filings over the last 3 years (from mid-November 2017 through mid-November 2020) would have generated annualized total returns of 10.20%. For comparison, the S&P 500 ETF (SPY) generated annualized total returns of 12.20% over the same time period.

Note:  13F filing performance is different than fund performance.  See how we calculate 13F filing performance here.

You can download an Excel spreadsheet with metrics that matter of Glenview Capital Management’s current 13F equity holdings below:

 

Keep reading this article to learn more about Glenview Capital Management.

Table Of Contents

Glenview Capital Management’s portfolio, and top public-equity holdings

Glenview’s investing style is most commonly referred to as Growth at a Reasonable Price or “GARP,” concentrating on companies in industries that are relatively stable, predictable, and often employ recurring revenue streams or entrenched market positions. This is evident from the company’s current portfolio of holdings. The fund lacks any significant tech exposure, despite the sector’s attractiveness as of lately, possibly due to its extended valuations. Instead, most of Glenview’s holdings are relatively fairly-priced equities, while still having some potential to grow in the long-term.

The fund’s public-equity investment portfolio consists of 45 individual stocks, with heavy exposure in the Healthcare sector, most likely due to its attractive valuations, and recurring cash flows sourced from insurance businesses, pharmaceuticals, and diagnostics.

Source: Company Filings, Author

The fund’s holdings are also fairly diversified, despite its relatively thin number of individual equities. No stock exceeds 16.5%, while its top 10 holdings account for around 67% of the total portfolio.

Glenview’s top 10 holdings are the following:

Source: Company Filings, Author

Tenet Healthcare Corp. (THC)

Tenet Healthcare Corporation is a diversified healthcare services company. It operates through three segments: Hospital Operations and Other, Ambulatory Care, and Conifer, a company that helps enhance the consumers’ and patients’ healthcare experience, as well as help with controlling their costs. Despite the company’s massive revenues relative to its market cap (4.5X over), Tenet has struggled with delivering consistent profits.

Despite its weak profitably, shares are currently trading at a 5-year high, as analysts expect the company’s bottom line to turn positive over the next year, as Tenet manages its costs better. Glenview owns a massive 17.3% stake in the $4.3 billion company, having sufficient influence in its operations and strategy (i.e. an activist holding).

Bausch Health Companies Inc. (BHC)

Canada-based Bausch Health is another company in the healthcare sector that manufactures and markets various pharmaceutical, medical device, and over-the-counter (OTC) products mainly in the therapeutic fields of eye health, gastroenterology, and dermatology. It is Glenview’s second-largest holding, despite the fund trimming its position slightly, by around 4% in the previous quarter. Glenview owns around 4.2% of the company, which indicates a high-conviction pick.

It’s worth noting that BHC is also struggling with its bottom line, having delivered nearly around a dozen quarters of negative net income.

Takeda Pharmaceutical Company Limited (TAK)

Takeda Pharmaceuticals is not just another healthcare company. The Japanese behemoth is the largest pharma company in Asia, and one of the largest in the world, boasting a $55 billion market, and around $30 billion in annual revenues. Glenview has been holdings shares since late 2018, adding to its position occasionally. During the latest quarter, it increased its position by 3%. The company is paying a relatively stable dividend, currently yielding around 4.7%,  though it is only paid once per year. Investors should be aware of Japan’s high taxation, however, which keeps Takeda’s after-tax yield quite compressed.

Cigna Corporation (CI)

Cigna Corporation is one of the fund’s biggest value plays. At around 14 times its underlying earnings, the company is trading at a discount compared to its historical average multiples. The company’s healthcare plans have been providing a recurring revenue stream to the company, which due to expanding economies of scale has started growing its net income margins over time. Glenview initially bought into the stock in late 2017 and has since been marginally adding to its position, including during the previous quarter.

Cigna does pay a dividend, which currently yields 1.8%. Investors should expect most of their future return in the form of capital gains, as the stock keeps climbing along with Cigna’s EPS.

HCA Healthcare, Inc. (HCA)

Displaying its love for the healthcare sector once more, HCA is Glenview’s 5th largest holding, despite the fund trimming its position by early 25 during the last quarter. The company manages general, acute care hospitals that offer medical and surgical services, such as inpatient care, intensive care, cardiac care, diagnostics, and other services. Due to the recurring patient needs, the company’s revenues are very stable and were barely affected by COVID-19. The company does not pay a dividend. Instead, it prefers to return capital to its shareholders through massive stock buybacks. Over the past decade, management has repurchased nearly 1/3 of the company’s stock, which is utterly outstanding.

McKesson Corporation (MCK)

McKesson Corporation offers pharmaceuticals and medical supplies in the U.S. and internationally. It provides pharmaceuticals, prescription technology solutions,  medical-surgical solutions, and more. The company is worth around $28 billion, despite generating more than $231 billion in revenues, as its margins are razor-thin. Its net income margins average at around 1% are very susceptible to potentially unprofitable quarters, hence the stock’s compressed valuation which currently stands at around 13 times its net income.

Management has never cut the dividend and does increase it whenever the company’s net income levels up. Still, the stock’s yield remains under 1% as the company maintains a safe payout ratio due to its thin bottom line.

DXC Technology Company (DXC)

DXC offers information technology services and solutions globally. The company is quite old in the industry, and new, more innovative companies have been capturing DCX’s market share over the past few years, causing revenues to decline. The fund has been holding the stock since late 2015, having purchased shares at an average price of around $41. Shares are currently trading at around $26, as the company has been struggling financially. Glenview sold around 25% of its stake last quarter, apparently at a loss. It is one of the fund’s least successful investments, yet still, it’s its 7th largest holding.

Laboratory Corporation of America Holdings (LH)

Laboratory Corporation is a constant cash cow, operating as an independent clinical laboratory company worldwide. The company produces incredible cash flows, that are mostly recession-proof due to the essential nature of its operations. Management uses the cash generated to buy other labs and expand its reach, or buyback shares instead. The stock is a relatively new holding for Glenview, initiated this year. Laboratory Corporation could be an amazing pick for investors looking to buy into a low volatility company with AAA cash flows.

ViacomCBS Inc. (VIAC)(VIACA) 

Viacom operates as a media and entertainment company worldwide. The company owns some of the most well-known IPs, including massive content catalogs. The company recently merged with CBS, which should improve efficiencies among the two networks. Glenview has been holding shares since 2013, and in the latest quarter sold around 40% of its stake, possibly to book some gains out of the stocks recent rally. The stock is currently trading around 8.5 times its forward net income, which makes it quite the value play. However, investors are worried that its non-modernized operations may hurt the company’s long-term success outlook. This explains the depressed valuation.

Meritor, Inc. (MTOR)

Meritor, Inc. designs, develops and manufactures components for original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle markets. The company’s operations are quite cyclical, which causes revenues to be fluctuating quite wildly. Combined with fear of the new EV market which may leave Meritor’s more traditional operations needless over time, the stock is trading at just around 8.55 times its net income. Management uses most of the cash generated to buy back stock whenever possible, and stabilize the stock price.

Meritor is one of Glenview’s oldest picks it still owns, initially purchasing shares in 2007. The fund boasts an average purchasing price under $15, which makes Meritor a quite successful pick. The fund sold around 28% of its position during the last quarter, likely to take some profits off the table due to the stock’s prolonged rally.

Final Thoughts

Glenview Capital Management is not the best performing fund in the world, however, its stock picks present investors with some compelling investment ideas, especially in the healthcare sector. The fund’s portfolio is not that well-diversified; however, management expertise in the sector seems to be matching the overall market returns.

Investors should do their own due diligence before allocating capital in Glenview’s holdings, as many of them are not very conventional, and require a deeper understanding compared to the more common stocks we often find in funds, including big tech.