Larry Robbins’ Glenview Capital Management has filed its 13F with the SEC for the reporting period of March 31. The investment manager has an equity portfolio valued at $21.90 billion, yet one that is still relatively top-heavy, with its top ten stock holdings accounting for 35.81% of its portfolio. Some of the primary investment sectors of the fund manager include healthcare, consumer discretionary, and information technology. Robbins added 13 new stocks to his portfolio while adding to his position in 27 other stocks during the quarter. Some of the new buys of Glenview Capital include McDonald’s Corporation (NYSE:MCD), Citigroup Inc (NYSE:C) and Gap Inc (NYSE:GPS), but we’ll focus on Robbins’ top picks in this article.
Hedge funds and other big money managers like Robbins tend to have the largest amounts of their capital invested in large and mega-cap stocks like McDonald’s Corporation (NYSE:MCD) and Citigroup Inc (NYSE:C) because these companies allow for much greater capital allocation. That’s why if we take a look at the most popular stocks among funds, we won’t find any mid- or small-cap stocks there. However, our backtests of hedge funds’ equity portfolios between 1999 and 2012 revealed that the 50 most popular stocks among hedge funds underperformed the market by seven basis points per month. On the other hand, their top small-cap picks performed considerably better, outperforming the market by 95 basis points per month. This was confirmed through backtesting and in forward tests of our small-cap strategy since 2012. The strategy, which involves imitating the 15 most popular small-cap picks among hedge funds has provided gains of more than 139%, beating the broader market by over 80 percentage points (see the details).
Monsanto Company (NYSE:MON) is the largest stock holding of Robbins and it accounts for 4.98% of his overall portfolio. The fund manager owns 9.69 million shares of the agriculture company, with a market value of $1.09 billion. Monsanto Company (NYSE:MON) is working on multiple aspects to ensure its acquisition attempt of Syngenta AG (ADR) (NYSE:SYT) goes through smoothly. Monsanto made a bid of $45 billion for the crop protection company which Syngenta declined, stating that the deal undervalues the future prospects of the company. The combination of these two companies could result in one of the biggest deals ever struck in the agriculture industry. Together, these two companies have a market cap of $96.6 billion and they accounted for 45% of the global sale of seeds in 2014, as per the records of BMO Capital Markets. D E Shaw, Pennant Capital Management, and Fir Tree are among the top investors of Monsanto Company (NYSE:MON).
Flextronics International Ltd. (NASDAQ:FLEX) comes at number two in the equity portfolio of the billionaire money manager. Robbins’ position in Flextronics includes 75.13 million shares of the electronics supply chain company, with the shares having a market value of $952 million as of the reporting period. The shares of Flextronics International Ltd. (NASDAQ:FLEX) have improved 10.13% year-to-date and it has a current market cap of $7.16 billion. The Singapore-based company reported a decline in quarterly revenue during its fourth quarter of 2014 in comparison to the year-ago period, although its quarterly net income grew by three times on a year-over-year basis. Flextronics International Ltd. (NASDAQ:FLEX) reported net revenue of $5.95 billion as compared to $6.72 billion in the year-ago period, while its net income was $135 million against net income of $43 million in the same quarter one year prior. Cliff Asness‘ AQR Capital Management, GMT Capital, and Ivory Capital hold significant positions in the electronics manufacturer.
