Glenview Capital Management is a New York City-based hedge fund, that was launched 18 years ago by Larry Robbins, who previously worked as a trader for billionaire Leon Cooperman’s Omega Advisors. The fund posted return of 301% after fees and expenses for the first decade of its existence, even though 2008 posed too many difficulties for it to handle, which resulted in it losing around half of its assets in that year. In spite of going down 50% in 2008, Glenview Capital made a fantastic comeback next year, returning an eye-popping 82.7% in 2009. Last year, which created similarly harsh market conditions such as 2008, also challenged Glenview Capital Management, whose largest hedge fund lost 16.2%. The fund held around $11.1 billion in assets on a discretionary basis on March 3, 2017. Today, we want to take a look back at the 2018 Sohn Conference and see how the fund’s best ideas presented there have been performing so far.
At the conference, Larry Robbins recommended these three stocks - Express Scripts, McKesson Corporation (NYSE:MCK), and CVS Health Corporation (NYSE:CVS). Larry Robbins devoted an important part of his presentation to Amazon trying to demonstrate why he doesn’t see it as a threat to these companies. In a CNBC Interview published later on, he said that the barriers for Amazon to entry pharmaceutical distribution business are too high. “You need separate custody, pick, pack, and ship facilities around the United States. You can’t commingle opioids or narcotics with other general merchandise goods. You need cold storage through the entire chain. Plus, you need to connect all the suppliers with all the customers. The customers aren’t necessarily Amazon’s consumers, but the customers are places where pharmacy actually happens.” More details about why Larry Robbins thinks that the idea of Amazon entering the pharmacy world is overblown are in the video below.
Insider Monkey was at the conference, and in spite of Larry Robbins’ good case on Amazon not being a threat to the companies he pitched, we weren’t that excited for its recommendations. We were rather intrigued by a stock pitched by the best performing hedge fund manager among all Sohn presenters, Oleg Nodelman, from EcoR1, and he pitched Ascendis Pharma A/S (NASDAQ:ASND). After the conference, we recommended this stock to our premium subscribers and then once again in October (when the stock price was still low) in a free sample issue of our monthly newsletter. What happened since then? Well, ESRX returned 30% until its merger with Cigna, while McKesson Corporation (MCK) and CVS Health Corporation (CVS) lost almost 22% and 18%, respectively. What about the stock we liked the most? It turns out, Ascendis Pharma A/S (ASND) has outperformed all the three, returning 84% since the conference.
Our mission is to identify promising (and also terrible) hedge fund stock pitches and share them with our subscribers, which we managed to perform once again. We launched a long activist investing strategy in our monthly newsletter 2 years ago. This strategy’s stock picks returned 61% in 2 short years, vs. a gain of 21% for the S&P 500 Index ETF (SPY).
We have also been very successful at identifying stocks that will decline even in a bull market. We launched our short strategy a little more than 2 years ago and share our short stock picks in our quarterly newsletter. This strategy’s picks lost 27.5% since then, vs. a gain of 25% for the S&P 500 Index. This means our short strategy actually outperformed the market by 52.5 percentage points (let us know if you don’t understand how the outperformance for a short strategy is calculated).
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This article is originally published at Insider Monkey.