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Larry Robbins' Firm Chips Away at Top Holdings During the 1st Quarter

Glenview Capital Management, the firm founded by Larry Robbins (Trades, Portfolio), disclosed over the past few weeks that its top five sells during the first quarter were in Cigna Corp. (NYSE:CI), HCA Healthcare Inc. (NYSE:HCA), Hologic Inc. (NASDAQ:HOLX), IQVIA Holdings Inc. (NYSE:IQV) and The Walt Disney Co. (NYSE:DIS). Cigna and HCA are among the firm's top five holdings as of March 31.


The New York-based firm manages approximately $13.3 billion in assets as of the latest ADV form, split between the long-and-short Glenview Funds and a concentrated, optimistic Glenview Opportunity Funds. The firm seeks capital appreciation through deep fundamental research and individual security selection.

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As of the quarter-end, the $3.66 billion equity portfolio contains 43 stocks with a turnover of 7%. The health care sector occupies 69.34% of the equity portfolio, while the technology and materials sectors occupy just 12.49% and 6.17% of the portfolio.

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Cigna

Glenview sold 2,708,765 shares of Cigna, zapping 64.86% of the holding and 4.86% of the equity portfolio. The transaction dropped Cigna from the second-largest position in the portfolio to the third-largest holding. Shares averaged $194.84 during the first quarter.

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The Bloomfield, Connecticut-based company provides pharmacy benefit management and health insurance services. GuruFocus ranks Cigna's financial strength 4 out of 10 on the back of debt ratios underperforming over 66% of global competitors, suggesting high leverage. Despite this, Cigna's profitability ranks 6 out of 10, driven by a three-year revenue growth rate that outperforms over 88% of global health care plan companies, offsetting below-industry-median returns on assets.

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Ken Fisher (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) sold out of Cigna during the quarter.

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HCA Healthcare

Glenview sold 3,152,172 shares of HCA Healthcare, trimming the position 52.85% and the equity portfolio 4.08%. The transaction knocked HCA out of the top holding spot and into the fifth-largest holding spot. Shares averaged $130.36 during the quarter.

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As of December 2019, the Nashville, Tennessee-based company owns and operates approximately 180 hospitals and 120 outpatient surgery centers. GuruFocus ranks HCA Healthcare's profitability 8 out of 10 on several positive investing signs, which include a three-star business predictability rank and operating margins that outperform over 76% of global competitors.

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Hologic

Glenview sold 6,156,261 shares of Hologic, trimming the holding 61.15% and the equity portfolio 2.82%. Shares averaged $47.87 during the first quarter.

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The Marlborough, Massachusetts-based company manufactures products for women's health. GuruFocus ranks Hologic's financial strength 4 out of 10 on the back of debt ratios underperforming over 81% of global competitors despite the company having a high Piotroski F-score of 7. Despite this, Hologic's net margin and return on assets outperform over 76% of global medical device and instrument companies.

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IQVIA

Glenview sold 2,037,269 shares of IQVIA, paring the position 54.30% and the equity portfolio 2.76%. Shares averaged $143.67 during the first quarter.

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The Danbury, Connecticut-based company represents the combination of Quintiles, a provider of outsourced late-stage clinical trials, and IMS Health, a provider of aggregated information and technology services. GuruFocus ranks IQVIA's financial strength 3 out of 10 on the back of interest coverage and debt ratios underperforming over 86% of global competitors. The website warns that IQVIA's long-term debt has increased by $3.7 billion over the past three years.

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Walt Disney

Glenview sold its 2,088,178 remaining shares of Walt Disney, reducing the equity portfolio 2.65%. Shares averaged $127.19 during the first quarter.

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GuruFocus ranks the Burbank, California-based entertainment giant's profitability 8 out of 10 on the back of a 4.5-star business predictability rank. Despite this, operating margins have declined approximately 4.7% per year on average over the past five years. Returns on assets are outperforming over 60% of global competitors.

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See also

Glenview introduced eight new positions during the quarter with a net portfolio impact less than 4%. Top new buys Boston Scientific Corp. (BSX) and Baxter International Inc. (BAX) impacted the portfolio by 2.13% and 1.07%.

Disclosure: No positions.

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This article first appeared on GuruFocus.