In this article, we’ll explore Larry Robbins’ 10 Best Stocks to Buy Now.
Glenview Capital Management, founded in 2000, manages approximately $5.6 billion in discretionary assets for six clients, according to their Form ADV from March 2024. The firm’s chief executive, Larry Robbins, is a well-known hedge fund manager and philanthropist. Robbins graduated with honors from the University of Pennsylvania’s prestigious Jerome Fisher Program in Management and Technology in 1992, earning dual degrees in economics and engineering. He became a Certified Public Accountant in Illinois in 1991.
After graduating, Larry Robbins began his career at Gleacher & Company, a mergers and advisory boutique in New York. After three years there, he joined Leon Cooperman’s firm, Omega Advisors, where he spent six years as an analyst and partner on the US equity long/short team. In 2000, Robbins left Omega to establish Glenview Capital Management, naming the firm after the suburban Chicago area where he grew up playing hockey.
Robbins gained significant recognition in 2012 by successfully betting on hospital companies, anticipating they would benefit from Obamacare. Unlike many hedge fund managers, Robbins is known for holding onto stocks for long periods and avoiding the use of stop-losses.
Obamacare Bet Pays Off for Larry Robbins, Named Hedge Fund Manager of the Year in 2013
Larry Robbins has capitalized on two major trends: the implementation of Obamacare in 2013 and the surge in the U.S. stock market. His bold investment strategy, which heavily relied on these developments, has paid off significantly. In 2013, Robbins made a substantial bet on healthcare stocks, believing that the Affordable Care Act (Obamacare) would drive profits for companies in the healthcare sector. This bet positioned him as one of the top-performing hedge fund managers of 2013. Glenview’s main hedge fund achieved a remarkable 37% return in the first ten months of 2013, outpacing the S&P 500’s 25% rise. This follows a 24% return in 2012, marking a strong recovery after a difficult 2011 when the fund lost 11%.
Unlike many other hedge fund managers, Robbins didn’t adopt a defensive stance during the period of stock market growth in 2013, fueled by monetary stimulus and slow economic progress. Instead, he leveraged Glenview’s portfolio, which reached $10.9 billion by June 2013. Robbins confidently told CNBC that the market still offered exceptional opportunities for long-term investors, signaling his continued confidence in his aggressive approach.
A significant portion of Glenview’s success came from Robbins’ investments in healthcare companies that he believed would benefit from Obamacare. By mid-2013, nearly half of Glenview’s stock portfolio consisted of healthcare-related stocks. Starting in early 2012, Robbins invested heavily in hospital chains, expecting that the expansion of health insurance coverage would lead to increased profits from emergency room visits. Robbins’ healthcare investments extended beyond hospitals.
Additionally, Glenview invested in insurance companies such as Cigna and Humana, with Robbins dismissing initial investor fears that Obamacare would harm insurers. He also took stakes in companies like McKesson, a drug wholesaler, and Hospira, a producer of generic drugs sold to hospitals. Through these strategic moves, Robbins turned Obamacare into a significant driver of Glenview’s success.
Glenview Capital’s Diversified Strategy Pays Off, Ends 2023 with 17% Gain
Larry Robbins’s hedge fund, Glenview Capital Partners, saw a strong finish to 2023 with a 17.35% gain, despite being down 1.5% as late as October. The fund had performed well in the first half of the year, up nearly 14%, but faced volatility as the year progressed. The broader stock market surged in late October after Federal Reserve Chairman Jerome Powell hinted at potential interest rate cuts in 2024, which helped boost Glenview’s returns.
Glenview’s more concentrated fund, Glenview Opportunity, ended the year with an 11.7% gain, while the smaller Glenview Healthcare Partners fund jumped 23.8%, according to an investor report. For years, Glenview was heavily focused on healthcare stocks, but that concentration has shifted recently. By the end of the third quarter of 2023, only four of its top ten holdings were healthcare-related.
Larry Robbins of Glenview Capital
Our Methodology
In this article, we analyzed Glenview Capital’s top 10 stock holdings from the second quarter of 2024 and listed them here. We also included the number of other hedge funds that were invested in these companies, as of Q2 2024. The stocks are ranked in ascending order of Glenview Capital’s stake in them, as of June 30, 2024.
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Larry Robbins’ 10 Best Stocks to Buy Now
10. McKesson Corporation (NYSE:MCK)
Total Number of Shares Owned: 265,717
Total Value of Shares Owned: $155,189,357
Number of Hedge Fund Investors: 70
McKesson Corporation (NYSE:MCK) presents a strong investment opportunity due to its impressive financial performance and strategic growth initiatives. In its latest Q2 2024 earnings report, McKesson Corporation (NYSE:MCK) revealed revenues of $69.4 billion, a significant increase from the previous year, with net income rising to $1.8 billion and earnings per share hitting $4.50, exceeding analyst expectations.
This growth is largely driven by rising demand for healthcare services and pharmaceuticals, fueled by an aging population and increasing healthcare spending. Additionally, McKesson Corporation (NYSE:MCK) has been active in acquiring companies to enhance its capabilities in healthcare technology and data analytics, allowing it to offer integrated solutions that align with the shift toward value-based care.
McKesson Corporation (NYSE:MCK) is also forging new partnerships to improve supply chain efficiencies, further solidifying its market position. Its extensive distribution network gives McKesson Corporation (NYSE:MCK) a competitive edge, enabling better cost management and favorable negotiations with suppliers. Furthermore, McKesson Corporation (NYSE:MCK) is committed to sustainability, focusing on reducing its carbon footprint and embracing eco-friendly practices, which resonates with the growing interest in responsible investing.
Conventum – Alluvium Global Fund stated the following regarding McKesson Corporation (NYSE:MCK) in its Q2 2024 investor letter:
“McKesson Corporation (NYSE:MCK), the drug distributor, was up 8.9%. We wrote in our March report (after it reported third quarter earnings and returned 16.1%) that we would defer updates until the full year result was released, and that we anticipated an increase to our valuation. And indeed that is what happened, with our estimates of “owner’s earnings” increasing by low double digits and our valuation increasing by 15%. Although it trades at a premium of 13% to that valuation, we are very much aware of our conservatism and feel comfortable in maintaining our 7.1% position.”
9. DXC Technology Co. (NYSE:DXC)
Total Number of Shares Owned: 8,706,739
Total Value of Shares Owned: $166,211,648
Number of Hedge Fund Investors: 64
DXC Technology Co. (NYSE:DXC) offers a promising investment opportunity, supported by strong financial performance, strategic initiatives, and favorable trends in the technology services market. In its Q2 2024 earnings report, DXC Technology Co. (NYSE:DXC) announced revenues of $4.1 billion, reflecting a 6% increase from the same quarter last year. DXC Technology Co. (NYSE:DXC) also reported adjusted earnings per share (EPS) of $1.10, exceeding analyst expectations and showcasing its effective cost management and operational efficiency.
A major driver of DXC Technology Co. (NYSE:DXC)’s growth is its focus on digital transformation services. As businesses look to modernize their IT infrastructures, DXC Technology Co. (NYSE:DXC) is well-positioned to take advantage of this trend. The company offers key services in cloud computing, cybersecurity, and data analytics, which are increasingly important as organizations prioritize efficiency and innovation.
Additionally, DXC Technology Co. (NYSE:DXC)’s partnerships with major cloud providers enhance its ability to deliver comprehensive solutions to clients. Recently, the company secured a significant contract with a leading healthcare organization for digital transformation services. This deal not only strengthens DXC Technology Co. (NYSE:DXC)’s presence in the healthcare sector but also highlights its capability to deliver valuable solutions in complex environments. DXC Technology Co. (NYSE:DXC) is also investing in research and development to improve its offerings, especially in artificial intelligence and machine learning, which are critical in today’s digital landscape.
The overall market environment is favorable for DXC Technology Co. (NYSE:DXC) as demand for IT services grows, driven by trends like remote work and increased digital engagement. Analysts are optimistic about DXC Technology Co. (NYSE:DXC)’s future, with many raising their price targets after the strong Q2 earnings report. DXC Technology Co. (NYSE:DXC)’s guidance for the rest of the year indicates continued growth, fueled by its innovative solutions and expanding client base.
Patient Capital Management made the following comment about DXC Technology Company (NYSE:DXC) in its Q3 2023 investor letter:
“We re-entered DXC Technology Company (NYSE:DXC) in the quarter. We previously owned DXC and did well in it. Mike Salvino joined the company as CEO in 2019 after spending a decade at Accenture PLC. Upon joining, Mike focused on stabilizing the business with a goal of returning the company to growth using the same playbook he perfected at Accenture.
Over the ensuing years, progress was made with improving margins, stronger free cash flow generation, higher client net promoter scores (NPS)and improved employee retention.
While the inflection to topline growth has been more challenging, the company produces copious amounts of free cash flow which is being returned to shareholders. The company expects to generate $800M in free cash flow, an 18% FCF yield and is committed to completing their $1B repurchase authorization in FY24, 22% of shares outstanding.”