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Larry Robbins' Top 6 Buys of the 1st Quarter

- By James Li

Larry Robbins (Trades, Portfolio), founder of Glenview Capital Management, disclosed last week his top six buys for the first quarter included one new position and five position boosts. Robbins also raised his bet on Endo International PLC (ENDP) this month according to GuruFocus Real-Time Picks.


Managing a portfolio of 45 stocks, Robbins focuses on delivering attractive returns through an intense focus on fundamental research and individual security selection. Glenview operates two products: Glenview Funds and Glenview Opportunity Funds. The funds are primarily focused on the U.S., with limited exposure to Western Europe.

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As of quarter-end, the $11.21 billion equity portfolio contains 53.06% exposure to the health care sector, Glenview's top sector in terms of portfolio weight. Technology represents 19.11% of the portfolio, while basic materials occupies 12.72%. The top five buys for the quarter included one new holding in Takeda Pharmaceutical Co. Ltd. (TAK) and position boosts in the following five companies: Humana Inc. (HUM), LyondellBasell Industries NV (LYB), Cigna Corp. (CI), NXP Semiconductors NV (NXPI) and AmerisourceBergen Corp. (ABC).

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Endo

On May 10, Robbins added 3,865,755 shares of Endo, increasing the position 44.67% and his equity portfolio 0.28%. Shares closed at $8.06 that day.

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The Dublin, Ireland-based drug manufacturer operates primarily in pain management following a string of acquisitions and divestitures. GuruFocus ranks the company's financial strength 3 out of 10 on several weak indicators, which include interest coverage below Benjamin Graham's required threshold of 5 and an Altman Z-score that suggests possible financial distress.

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Jim Simons (Trades, Portfolio) and John Paulson (Trades, Portfolio) also have large holdings in Endo.

Takeda

Robbins purchased 26,112,660 shares of Takeda, giving the stake 4.75% weight in the equity portfolio. Shares of the Japanese drug manufacturer averaged $20.07 during the first quarter.

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Takeda operates in four therapeutic areas: oncology, gastroenterology, vaccines and neurology. GuruFocus ranks the company's financial strength 5 out of 10: Although Takeda has a moderately strong Piotroski F-score of 5, its interest coverage and debt ratios are underperforming over 63% of global competitors. The website warns the company has increased its long-term debt by 1,905.8 billion yen (approximately $17.28 billion) over the past three years.

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Despite relatively poor financial strength, Takeda's profitability ranks 6 out of 10 primarily due to profit margins outperforming over 67% of global competitors.

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Humana

Robbins added 1,126,844 shares of Humana, increasing the holding 608.46% and his equity portfolio 2.67%. Shares averaged $288.61 during the quarter.

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The Louisville, Kentucky-based company provides government-sponsored health care plans, including Medicare and Medicaid. Humana's 4.5-star business predictability rank is on watch: Although the company had consistent revenue growth over the past 10 years, its Ebitda has declined approximately 2.80% per year over the past three years, a rate that outperforms just 65% of global competitors. Based on the company's profit margins and growth metrics relative to peers, GuruFocus ranks Humana's profitability a modest 5 out of 10.

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Simons and the Vanguard Health Care Fund (Trades, Portfolio) also have large holdings in Humana.

LyondellBasell Industries

Robbins added 3,312,724 shares of LyondellBasell Industries, increasing the stake 338.43% and his equity portfolio 2.49%. Shares averaged $86.41 during the quarter.

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The U.K.-based petrochemical producer operates in the U.S. and Europe, generating products like polyethylene, polypropylene and propylene oxide. GuruFocus ranks LyondellBasell's profitability 7 out of 10: Even though the company's three-year revenue growth underperforms 60% of global competitors, its operating margin has increased approximately 3.90% per year over the past five years and is outperforming 77% of global specialty chemical companies.

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Cigna

Robbins added 1,658,305 shares of Cigna, increasing the position 61% and his equity portfolio 2.38%. Shares averaged $183.17 during the quarter.

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The Bloomfield, Connecticut-based company provides health insurance services to individuals primarily through the group employer market. GuruFocus ranks Cigna's financial strength 4 out of 10: Although the company's debt ratios outperform over 60% of global competitors, its cash-debt ratio of 0.12 underperforms 67.86% of global companies that offer health care plans.

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Having established a holding in Cigna in the prior quarter, Third Point manager Daniel Loeb (Trades, Portfolio) sold 575,000 shares during the first quarter, closing the position.

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NXP Semiconductors

Robbins added 2,141,625 shares of NXP Semiconductors, increasing the stake 195.22% and his equity portfolio 1.69%. Shares averaged $87.60 during the quarter.

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The Netherlands-based company produces high performance mixed signal and standard product solutions used in a wide range of end-market applications. GuruFocus ranks NXP's profitability 7 out of 10: Although the company's three-year Ebitda growth rate outperforms 81% of global competitors, its operating margin and three-year revenue growth rate outperform just over 51% of global semiconductor companies.

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AmerisourceBergen

Robbins added 2,004,048 shares of AmerisourceBergen, increasing the position 1,136.42% and his equity portfolio 1.42%. Shares averaged $80.35 during the quarter.

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The Chesterbrook, Pennsylvania-based pharmaceutical distributor's activities include procurement, inventory management, reimbursement consulting, sales forecasts and logistics services. GuruFocus ranks AmerisourceBergen's profitability 7 out of 10: Although the company's return on equity and Joel Greenblatt (Trades, Portfolio) return on capital are outperforming over 85% of global competitors, its three-year revenue growth rate outperforms just 53% of global competitors.

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Disclosure: No positions.

Read more here:

  • John Paulson's Top 5 Buys in the 1st Quarter
  • George Soros' Top 6 New Buys of the 1st Quarter
  • Leon Cooperman's Top 5 Buys in 1st Quarter



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This article first appeared on GuruFocus.