In this article, we will discuss the 10 best healthcare stocks to buy according to Larry Robbins’ Glenview Capital. If you want to skip our detailed analysis of Robbins’ history and hedge fund performance, go directly to the 5 Best Healthcare Stocks to Buy According to Larry Robbins’ Glenview Capital.
Larry Robbins, born in 1969, is an American hedge fund manager and philanthropist. He is the executive director of Glenview Capital, a hedge fund with approximately $5.90 billion of capital under management as of March 2021. Before establishing Glenview Capital in February 2001, Larry Robbins was a dealer at Leon Cooperman’s Omega Advisors.
Glenview handles capital for investors through a range of private investment funds. Glenview’s investment policy is commonly referred to “Growth at a Reasonable Price” or “GARP.” It concentrates on companies that are stable and reliable, with regular earnings and deep-rooted market hold. Glenview has invested in various industries, including medical-aid, commercials, customer services, and tech companies.
In Takeda Pharmaceutical Company Limited (NYSE: TAK), Robbins owns 16.10 million shares representing 4.98% of his portfolio, as of the first quarter of 2021. In addition, Larry Robbins’ Glenview Capital increased its stake in the company by 6% in the first quarter, ending the period with $294.06 million worth of the company’s stock. On June 10, Codexis, Inc. (NASDAQ: CDXS) announced a collaboration with Takeda Pharmaceutical Company Limited (NYSE: TAK) for the research and growth of a supplementary genetic therapy for a lysosomal storage disorder.
In Microsoft Corporation (NASDAQ: MSFT), Glenview Capital holds 179,573 shares, worth over $42.34 million. This represents 0.71% of their portfolio. The hedge fund’s stake in the tech giant Microsoft Corporation (NASDAQ: MSFT) increased by 626% in the past few months, the latest data reveals. On June 28, Jefferies analyst Brent Thill raised the firm’s price target on Microsoft to $310 from $290 and rated the stock as Buy.
The hedge fund managed by Larry Robbins owns 491,855 shares in Facebook, Inc. (NASDAQ: FB) worth over $144 million, representing 2.45% of their portfolio. Glenview Capital has increased its stake in the firm by 5031% in the last three months. Facebook, Inc. (NASDAQ: FB) currently has a $993.6 billion market capitalization and was able to deliver a 47.62% return in the past 12 months. On June 2, KGI Securities initiated a coverage on Facebook, Inc. (NASDAQ: FB) with an Outperform rating and a price target of $420.
But in this article, our focus would be healthcare stocks in Glenview’s Q1 portfolio.
Why pay attention to Larry Robbins’ stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16. That’s why we believe hedge fund sentiment is a handy indicator that investors should consider. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Larry Robbins of Glenview Capital
With this context and industry outlook in mind, let’s start the list of the 10 best healthcare stocks to buy according to Larry Robbins’ Glenview Capital.
Best Healthcare Stocks to Buy According to Larry Robbins’ Glenview Capital
10. Walgreens Boots Alliance, Inc. (NASDAQ: WBA)
Robbins’ Stake Value: $70,812,000
Percentage of Larry Robbins’ 13F Portfolio: 1.19%
America-based pharmaceuticals holding company Walgreens Boots Alliance, Inc. (NASDAQ: WBA) ranks tenth on the list of 10 best healthcare stocks to buy according to Larry Robbins’ Glenview Capital. On April 22, Walgreens Boots Alliance, Inc. (NASDAQ: WBA) declared a quarterly dividend of $0.4675 per share. The forward dividend yield of the stock is about 1.87%.
The company has a market cap of $41.13 billion. On July 8, Walgreens Boots Alliance partnered with VillageMD to start 29 new Village Medical at Walgreens practices in Houston, Austin and El Paso this year.
The hedge fund initiated a new stake in the company in the first quarter of 2021 with 1.29 million shares worth $70.81 million. Stephen Dubois’ Camber Capital Management is the leading shareholder of Walgreens Boots Alliance, Inc. (NASDAQ: WBA), with 3.75 million shares worth $205.88 million.
Ariel Investments, in its fourth quarter 2020 investor letter, mentioned Walgreens Boots Alliance, Inc. (NASDAQ: WBA). Here is what the fund has to say about Walgreens Boots Alliance in its letter:
“Walgreens Boots Alliance, Inc. has been essentially flat during our brief holding period. We have successfully owned Walgreens in the past. Recently, its share price has been pressured on concerns that Amazon may enter the prescription drug distribution business. As recently as 2015, Walgreens was a market favorite, trading at more than 20 times forward earnings. The company was expected to grow in good times and bad. Walgreens’ new clinics, designed to treat day-to-day healthcare needs such as flu shots and children’s ear infections, could be part of the solution for expensive emergency room overcrowding. Finally, trends toward generic pharmaceutics that began in 2015 are still considered a positive, as pharmacies have more influence in directing customers toward particular generics than with a patient seeking a patented drug prescribed by a doctor. Walgreens will face new competition going forward, but with its current depressed valuation, we believe the threats are more than discounted in an attractive stock price.”
9. Baxter International Inc. (NYSE: BAX)
Robbins’ Stake Value: $123,601,000
Percentage of Larry Robbins’ 13F Portfolio: 2.09%
Baxter International Inc. (NYSE: BAX) produces and distributes a range of healthcare goods across the world through its subsidiaries. It is placed ninth on the list of 10 best healthcare stocks to buy according to Larry Robbins’ Glenview Capital. Baxter International Inc. (NYSE: BAX) shares have offered investors returns of 39.37% in the past year.
On August 2, Baxter International (NYSE: BAX) partnered with Amazon Web Services (AWS), a subsidiary of Amazon.com, Inc. (NASDAQ: AMZN), to deliver cloud technology solutions. The aim of the collaboration is to develop innovative digital solutions for patient care, update its technology capabilities and business processes. On July 29, Baxter International Inc. (NYSE: BAX) posted earnings per share of $0.80 in the second quarter of 2021, beating the market predictions by $0.05. Revenue over the period was of $3.1 billion, missing the estimates by $10 million. Stifel analyst Rick Wise lowered the price target on Baxter International Inc. (NYSE: BAX) to $90 from $95 and maintained a “Buy” rating on the shares.
Like Takeda Pharmaceutical Company Limited (NYSE: TAK), Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), Walgreens Boots Alliance, Inc. (NASDAQ: WBA) and Boston Scientific Corporation (NYSE: BSX), Baxter International Inc. (NYSE: BAX) is one of the notable stocks in Larry Robbins’ Q1 portfolio.
The hedge fund chaired by Larry Robbins owns more than 1.38 million shares in Baxter International (NYSE: BAX) worth over $116 million, representing 1.96% of their investment portfolio. Glenview Capital has increased activity on Baxter International Inc. (NYSE: BAX) by 147% in the past few months.
8. Boston Scientific Corporation (NYSE: BSX)
Robbins’ Stake Value: $123,601,000
Percentage of Larry Robbins’ 13F Portfolio: 2.09%
Boston Scientific Corporation (NYSE: BSX) is a global medical device company that develops, produces, and markets medical devices, and it stands eighth on the list of 10 best healthcare stocks to buy according to Larry Robbins’ Glenview Capital. Boston Scientific Corporation (NYSE: BSX) shares have offered 14.58% in returns to investors over the course of the past 12 months.
On July 27, the company posted higher-than-anticipated first quarter 2021 results. The earnings per share was $0.40, beating the estimates by $0.03; revenue was $3.07 billion, up 53.5% YoY, beating the market predictions by $130 million. Argus analyst Jasper Hellweg raised the price target on Boston Scientific Corporation (NYSE: BSX) to $50 from $45 and kept a “Buy” rating on the shares.
Glenview Capital increased its stake in Boston Scientific Corporation (NYSE: BSX) by 19% in the first quarter of 2021, ending the period with $123.60 million worth of the company’s stock.
Artisan Partners Limited Partnership, in its fourth-quarter 2020 investor letter, mentioned Boston Scientific Corporation (NYSE: BSX). Here is what the fund said:
“Among our bottom contributors in Q4 was Boston Scientific. Shares of Boston Scientific were pressured in Q4 alongside the cancellation of its transcatheter aortic valve product Lotus Edge. We acknowledge the modest disappointment, but we believe it will be slightly accretive to earnings in the near term. Longer term, we believe the company’s investments over the past five years in higher growth categories—structural heart, peripheral interventions, international oncology, atrial fibrillation in particular—position it well to improve its margins and grow revenue at a rate on the higher end of its peer group. Given this backdrop and the Lotus news more than accounted for in the share price, we added to our position at an attractive valuation.”
7. Universal Health Services, Inc. (NYSE: UHS)
Robbins’ Stake Value: $154,618,000
Percentage of Larry Robbins’ 13F Portfolio: 2.61%
Universal Health Services, Inc. (NYSE: UHS) owns and operates acute care hospitals, as well as outpatient and mental health care facilities, through its subsidiaries. It is placed seventh on the list of 10 best healthcare stocks to buy according to Larry Robbins’ Glenview Capital. Universal Health Services, Inc. (NYSE: UHS) shares have offered investors returns of 39.37% in the past year.
On July 28, Deutsche Bank analyst Pito Chickering raised the price target on Universal Health Services, Inc. (NYSE: UHS) to $185 from $160 and maintained a “Buy” rating on the shares after the “solid” second quarter results. On July 26, Universal Health Services, Inc. (NYSE: UHS) posted earnings per share of $3.76 in the first quarter of 2021, beating the market predictions by $1.07.
The hedge fund managed by Larry Robbins owns more than 1.16 million shares in Universal Health Services, Inc. (NYSE: UHS) worth over $154 million, representing 2.61% of their portfolio. Glenview Capital has increased its stake in the firm by 86% in last three months.
6. HCA Healthcare, Inc. (NYSE: HCA)
Robbins’ Stake Value: $201,610,000
Percentage of Larry Robbins’ 13F Portfolio: 3.41%
HCA Healthcare, Inc. (NYSE: HCA), a health-care services corporation in the United States that operates via its subsidiaries, stands sixth on the list of 10 best healthcare stocks to buy according to Larry Robbins’ Glenview Capital. HCA Healthcare, Inc. (NYSE: HCA) shares have offered 91.19% in returns to investors over the course of the past 12 months.
On July 20, HCA Healthcare, Inc. (NYSE: HCA) posted earnings per share of $4.37 in the first quarter of 2021, beating the market predictions by $1.21. HCA Healthcare, Inc. (NYSE: HCA) also declared a quarterly dividend of $0.48 per share in line with the previous.
Glenview Capital holds more than 1 million shares in HCA Healthcare, Inc. (NYSE: HCA) worth over $201 million, representing 3.41% of their portfolio.
Like Takeda Pharmaceutical Company Limited (NYSE: TAK), Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), Walgreens Boots Alliance, Inc. (NASDAQ: WBA) and Boston Scientific Corporation (NYSE: BSX), HCA Healthcare, Inc. (NYSE: HCA) is one of the notable stocks in Larry Robbins’ Q1 portfolio.
Bireme Capital, in its fourth quarter 2020 investor letter, mentioned HCA Healthcare, Inc. (NYSE: HCA). Here is what the fund said:
“Since March we have increasingly tilted the long book towards stocks whose businesses will improve as the pandemic fades, a strategy we first discussed in our 1Q20 letter. Now that 2020 is — thankfully — over, let’s take a look back at some of our predictions from Q1.
HCA Healthcare (HCA) runs for-profit hospitals. In Q1, we said:
‘We were shocked to see HCA Healthcare, Inc. (NYSE: HCA) initially trade down more than 50% in mid-March, in line with hotel companies and online travel agents. HCA will likely earn $11-12 in EPS when the COVID-19 crisis recedes, and we think the stock will trade back towards $150. Therefore, during Q1 we added we added ~80% to our shareholdings at an average price of roughly $90.’
If anything, this prediction was pessimistic. Despite the raging pandemic, 2020 revenue of $51.5b was actually up year-over-year. Earnings increased as well, with 2020 EPS of $10.93 and guidance of $12.10-13.10 in EPS for 2021. Said another way, in March HCA Healthcare, Inc. (NYSE: HCA) was trading for about 5 times 2021 earnings. We think that at $175 this stock is still cheap today and should trade at well over $200 per share.”
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Disclosure: None. 10 Best Healthcare Stocks to Buy According to Larry Robbins’ Glenview Capital is originally published on Insider Monkey.
