Glenview Capital Management starts new positions in AAP, AMT, DG, NXPI, sells NTAP, ROVI—13F Flash F

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Glenview Capital Management starts new positions 3Q 2013 (Part 6 of 6)

(Continued from Part 5)

Glenview Capital Management is a private investment management firm with more than $7 billion of assets under management. The firm was founded in 2000 by Lawrence “Larry” Michael Robbins. It manages capital for qualified investors through a series of private investment funds. Glenview has offices in New York and London. The $7 billion is split between Glenview Funds, a short fund, and Little Arbor Funds, a multi-strategy fund. Robbins generates his returns making concentrated bets on large-cap stocks. Glenview focuses on delivering attractive absolute returns through deep fundamental research and individual security selection.

The firm started new positions in Advance Auto Parts Inc. (AAP), American Tower Corp. (AMT), Dollar General Corp. (DG), and NXP Semiconductors (NXPI) and it sold positions in NetApp (NTAP) and Rovi Corporation (ROVI).

Abbreviated financial summaries and metrics for these securities are included below. Detailed analysis and recommendations require a subscription (more information at the bottom of the article).

Why sell Rovi Corporation (ROVI)?

Rovi Corporation reported disappointing results, with revenue down 13% to $143.0 million in 3Q 2013 from $163.7 million in 3Q 2012. The year-over-year decline in revenue was primarily attributed to continued and anticipated revenue declines within the company’s consumer electronics video delivery and display sales vertical, as well as an absence of new licensing agreements. The company said that it took longer than anticipated to close certain deals, particularly overseas and with over-the-top video providers. The company reduced its outlook for 2013 due to difficulty in predicting the timing of new licensing agreements. It revised its full-year revenue expectations to between $585 million and $615 million. It also announced that its board of directors has authorized a review of strategic alternatives for its DivX (DIVX) business.

Rovi Corporation is based in Santa Clara, California. It provides guidance technology, entertainment data, copy protection, industry standard networking, and media management technology for digital entertainment devices and services. Its customers include consumer electronics manufacturers, cable television and satellite television operators, movie studios, and online entertainment portals and content distributors. It was earlier known as Macrovision Solutions Corporation (Macrovision).

ROVI

Glenview Capital Management founder Lawrence “Larry” Michael Robbins graduated from the University of Pennsylvania and has a degree from the Wharton School of Engineering and the Moore School of Engineering. He has been known for his love for the healthcare sector. In a press release, Glenview stated that its investment in hospitals, which totals approximately $2.0 billion across five major U.S. hospital chains, reflects its affinity for the long-term growth and stability of the business, its recognition of the growth opportunities available through implementing expanded insurance coverage, its belief in the structural competitive advantages of for-profit hospital chains, and its excitement about the opportunities to reinvest in the industry’s strong cash flows and growing debt capacity as profitability builds through time. Robbins is known to take a more activist approach to some of his large bets, and he publicly voices his concerns about what management is doing and demands change.

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