Larry Robbins is a hedge fund manager and CEO of Glenview Capital Management. He is also well known for his quarterly letters to investors.
In 2001 Robbins started Glenview Capital Management which now runs several hedge funds and long-only funds. The firm invests in equities as well as bonds and holds both long and short positions. It has been reported that Glenview Capital Management’s flagship fund returned 15% annually between 2000 to 2013.
Robbins has been described as a ‘Growth at a Reasonable Price’ (GARP) investor and as a ‘multi-strategy investor’. He’s said that he backs companies with predictable cash flows and recurring revenue streams. He often holds positions for significant periods, even when those positions move against him. As a result, he has earned a reputation for experiencing persistent winning and losing streaks.
While Robbins is not an activist investor, he does voice his opinions when it comes to some of his largest positions. In fact, he has said he would rather be ‘suggestivist’ than activist. In this way, he has been instrumental in bringing about corporate action at Tenet Healthcare Corp (NYSE:THC) and Community Health Systems (NYSE:CYH).
Below I take a closer look at Robbins’ holdings as reported in the hedge fund’s recent 13F SEC filing to find his most undervalued stocks.
Glenview Capital Management’s Most Undervalued Holdings
On February 14th, Larry Robbins’ firm Glenview Capital Management filed its quarterly Form 13F regulatory filing. The firm’s stock portfolio totals $18.5 billion with 58 positions according to the latest filing. The list value of stock holdings is up 7.3% when compared to the last quarter. As a benchmark, the S&P 500 was up 6.1% over the same period.
To determine which stocks are trading below their intrinsic value, aka “fair value” I used the finbox.io Fair Value estimates. I also wanted to blend in some indication of which stocks might be ready to make a move up soon because they’re popular with Wall Street analysts.
I calculated an average using the finbox.io fair value upside and analyst upside to create a blended upside which I then used to rank the most undervalued holdings.
Below are the top 7 stocks based on my calculations.
The 7 Most Undervalued Stocks In Larry Robbins’ Portfolio: Brookdale Senior Living (BKD)
Brookdale Senior Living, Inc. (NYSE:BKD) is a chain of senior-living options across the U.S.
Larry Robbins’ Glenview Capital Management holds a position in the company worth $177.0 million. This represents 1.0% of the firm’s portfolio.
Shares of the company are down -28.2% over the last three months. The stock last traded at $6.89 as of Wednesday and 2 separate valuation analyses imply that there is big upside relative to its current trading price. Maybe worth taking a closer look at the company.
The 7 Most Undervalued Stocks In Larry Robbins’ Portfolio: Meritor (MTOR)
Meritor Inc (NYSE:MTOR) is an auto parts manufacturer worldwide.
Glenview Capital Management currently owns 4,863,111 shares of MTOR which represents 0.6% of the hedge fund’s stock portfolio.
Shares of Meritor are down -8.0% over the last three months and finbox.io’s fair value estimate of $35.87 per share calculated from eight cash flow models imply 59.2% upside. The average price target from nine Wall Street analysts of $30.56 per share similarly imply nice upside potential.
The 7 Most Undervalued Stocks In Larry Robbins’ Portfolio: CVS (CVS)
CVS Health Corp (NYSE:CVS) is a massive healthcare and pharmacy chain, currently involved in a buyout of Aetna Inc (NYSE:AET).
Mr. Robbins currently holds a position in CVS Health Corp worth $494.6 million or 2.7% of his holdings.
CVS Health Corp’s stock currently trades at $63.00 per share as of Wednesday, down -12.4% over the last three months. It’s important to note that the Aetna merger is expected to be accretive to earnings in the second full year after the close of the transaction. On a standalone basis, finbox.io’s seven valuation analyses suggest that shares could increase 39.9% going forward.
The 7 Most Undervalued Stocks In Larry Robbins’ Portfolio: Shire PLC (ADR) (SHPG)
Shire PLC (ADR) (NASDAQ:SHPG) is a biotechnology company focused on developing treatmetns for rare diseases.
Glenview Capital Management currently owns shares of Shire worth $890.2 million. This represents the firm’s fourth largest position.
Shares of the biotechnology company are trading -17.5% lower over the prior three months. However, the stock price could end up trading 38.9% higher in 2018 based on Shire’s future cash flow projections.
The 7 Most Undervalued Stocks In Larry Robbins’ Portfolio: Platform Specialty Products (PAH)
Platform Specialty Products Corp (NYSE:PAH) is a specialty chemical producer operating worldwide.
Larry Robbins is currently long the stock as revealed in his firm’s most recent 13F filing with a position worth more than $140 million.
Platform Specialty Products’ stock currently trades at $10.40 per share as of March 21st, up 3.8% over the last three months. On a fundamental basis, the company’s stock is trading at a 35.9% discount to finbox.io’s intrinsic value estimate. Wall Street analysts estimate that there’s even more upside than that.
The 7 Most Undervalued Stocks In Larry Robbins’ Portfolio: CIGNA (CI)
CIGNA Corporation (NYSE:CI) is a large health insurance company operating primarily in the U.S.
Glenview Capital Management currently holds a position worth $531.9 million or 2.9% of its portfolio.
Shares of the company are down -20.4% over the last three months. The stock last traded at $167.94 as of Wednesday and three separate valuation analyses imply that there is 48.7% upside relative to its current trading price.
The 7 Most Undervalued Stocks In Larry Robbins’ Portfolio: Comcast (CMCSA)
Comcast Corporation (NASDAQ:CMCSA) is a U.S. telecom and internet giant. The company made an offer to acquire SKY PLC (OTCMKTS:SKYAY) from Twenty-First Century Fox Inc (NASDAQ:FOXA) and others for £21.5 billion on February 27th, 2018.
Mr. Robbins currently holds a position in Comcast worth $110.6 million.
Shares of Comcast are down -11.3% over the last three months and finbox.io’s fair value estimate of $44.40 per share calculated from 12 cash flow models imply 28.0% upside. The average price target from 24 Wall Street analysts of $49.08 per share imply even further upside.
Larry Robbins’ Most Undervalued Stocks
In conclusion, the table below lists the seven most undervalued stocks in Glenview Capital Management’s portfolio.
The Ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed above at the Glenview Capital Management page. Glenview Capital Management’s holdings above represent positions held as of December 31st and not necessarily reflective of the fund’s current stock holdings.
However, most can agree that with thousands of stocks traded on U.S. exchanges, doing thorough research on each one is nearly impossible for smaller investors. Leveraging the resources of the largest hedge funds on Wall Street can be a powerful way to narrow down the list.
Matt Hogan is a co-founder of finbox.io. His expertise is in investment decision making. Prior to finbox.io, Matt worked for an investment banking group providing fairness opinions in connection to stock acquisitions. He spent much of his time building valuation models to help clients determine an asset’s fair value. He believes that these same valuation models should be used by all investors before buying or selling a stock.
His work is frequently published at InvestorPlace, Benzinga, ValueWalk, AAII, Barron’s, Seeking Alpha and investing.com.
Matt can be reached at email@example.com. As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.