In this article, we discuss the 10 best stocks to buy now according to billionaire Larry Robbins. You can skip our detailed analysis of Glenview Capital and go directly to 5 Best Stocks to Buy Now According to Billionaire Larry Robbins.
Larry Robbins is a billionaire hedge fund manager as well as a philanthropist. He manages Glenview Capital which he named after the suburban hockey area where he used to play hockey in his teen years. The fund has nearly $6 billion in assets under management as of the first quarter of 2022.
Robbins grew up in Arlington Heights, Illinois. He’s a graduate in Economics and worked at Omega Advisors prior to founding Glenview.
Healthcare stocks are a favorite of Larry Robbins. In 2012, he successfully bet that Obamacare would be a bonanza for for-profit hospital companies and started concentrating his portfolio in the healthcare sector, delivering 54% return on his flagship Glenview Capital Opportunity Fund in the same year.
In the following year, the returns jumped to 84%, making Glenview Capital the number one fund on the Bloomberg-Markets ranking of the best performing hedge funds.
“I think one of the challenges that many people have is that, in their pursuit of highly diversified investment strategies, they end up investing their own capital – or capital that they are the fiduciary for – on things that, due to time constraints, they have no contact with. Or of which they don’t have a capacity to develop a deep understanding. The theory, when we started Glenview – and that perpetuates today – is to invest in businesses that we believe we can adequately describe in a matter of minutes. Businesses where we can look at past and present fundamentals and try to predict future fundamentals – including future earnings growth, cash flow growth, shareholder returns, and where we can invest capital at valuations – absolute valuations – that we find reasonable. And the final thing is that, all along the way, we wanted to think and act like owners – which the business has allowed us to do.”
Glenview Capital had a “suggestivist” approach to investment. The fund cultivates relationships with its holdings’ management boards to suggest changes that could be of benefit to shareholders. Later on, Robbins, whose portfolio is concentrated in healthcare stocks, switched to a more activist approach due to his observation that hospital companies are massively “underleveraged” and should be relatively more frequent with stock buybacks and bond issuance.
Robbins is a long-term holder. His fund does not employ stop-losses and has insignificant portfolio turnovers. Robbins looks for capital appreciation in well-established companies and in this regard, can be described as a value and growth investor. Glenview Capital focuses on predictable companies with advantages that go beyond economic cycles.
As of the first quarter of 2022, Glenview Capital has nearly $5 billion in managed securities. Healthcare and Services together make up the largest share in the fund’s portfolio. The tech sector takes up one of the smallest portions but there's prominent stocks to see in the portfolio like Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META) and Uber Technologies, Inc. (NYSE:UBER).
The main fund of Glenview Capital has averaged out at 13% in annual returns in the years 2000-2015, compared to the S&P 500’s average of 4.6% with dividends for the same period.
Larry Robbins of Glenview Capital
We’ve selected the top 10 stocks to buy now according to billionaire Larry Robbins, from his 13F filings of Q1 2022. We’ve highlighted key elements like the fund’s stake value in each of the given stocks as well as the percentage each holding takes up in its portfolio.
10. Coca-Cola Europacific Partners PLC (NASDAQ:CCEP)
Glenview Capital’s Stake Value: $138 million
Percentage of Glenview Capital’s 13F Portfolio: 2.8%
Number of Hedge Fund Holders: 31
Number ten on the list of best stocks to buy now according to billionaire Larry Robbins is Coca-Cola Europacific Partners PLC (NASDAQ:CCEP). It is a bottling company for The Coca-Cola Company (NYSE:KO). It was formed by the merger of European bottling companies: Coca-Cola Enterprises, Coca-Cola Erfrischungsgetränke AG and Coca-Cola Iberian Partners, S.A. and an Asia Pacific company, Coca-Cola Amatil.
On April 28, Deutsche Bank analyst Mitch Collett lowered the price target on Coca-Cola Europacific Partners PLC (NASDAQ:CCEP) to $59 from $66 and kept a Buy rating on the shares after strong first quarter results.
Coca-Cola Europacific Partners PLC (NASDAQ:CCEP) is a dividend paying stock. Investors of record on May 13 were paid a quarterly dividend of $0.59 per share on May 26. As of June 24, its annual dividend yield is 4.17%.
Glenview Capital’s stake in the company is only slightly higher than its stake in Amazon.com, Inc. (NASDAQ:AMZN) and Uber Technologies, Inc. (NYSE:UBER) but considerably higher than its Meta Platforms, Inc. (NASDAQ:META) stake.
9. US Foods Holding Corp. (NYSE:USFD)
Glenview Capital’s Stake Value: $166 million
Percentage of Glenview Capital’s 13F Portfolio: 3.3%
Number of Hedge Fund Holders: 40
US Foods Holding Corp. (NYSE:USFD) is a leading American food distributor catering to restaurants, hospitals and educational institutions among others. It has over 25,000 employees working in more than 60 locations across the country.
On June 9, Barclays analyst Jeffrey Bernstein lowered the price target on US Foods Holding Corp. (NYSE:USFD) to $34 from $38 and kept an Equal Weight rating on the stock.
Bernstein said that investors often look at consumer discretionary stocks like restaurant companies as uninvestable during periods of economic uncertainty, such as the present one where the likelihood of a recession is increasing.
However, the analyst believes that the sentiment is inaccurate and doesn’t factor-in the historical context. He observed that US Foods Holding Corp. (NYSE:USFD) is the extreme staple-end of consumer discretionary and was confident that it could weather the storm.
8. Baxter International Inc. (NYSE:BAX)
Glenview Capital’s Stake Value: $171 million
Percentage of Glenview Capital’s 13F Portfolio: 3.4%
Number of Hedge Fund Holders: 45
Baxter International Inc. (NYSE:BAX) is a multinational healthcare company headquartered in Illinois. The company develops products to treat various acute and chronic diseases but its primary focus is on developing treatments for kidney diseases.
On June 24, JPMorgan analyst Robbie Marcus lowered the price target on Baxter International Inc. (NYSE:BAX) to $78 from $90 and kept an Overweight rating on the shares.
Baxter International Inc. (NYSE:BAX) has a dividend yield of 1.74% as of June 24. The company has been growing its dividend payouts consecutively for seven years.
Cooper Investors mentioned Baxter in their Q3 2021 investor letter. Here’s what they said:
"During the quarter we exited our position in Baxter, having originally bought in 2017 as a Low Risk Turnaround with clear Stalwart attributes. In essence, the core businesses were highly durable, providing life sustaining or saving medical products such as IV medication or pumps and dialysis machines.
They had been mismanaged prior to the company spinning off its biopharmaceutical business in 2015 which had generated most of the Baxter’s operating profit. With a new CEO in Joe Almeida, who came with a successful track record leading another medical device company (Covidien) we identified three sources of value latency for the new standalone Baxter.
Firstly, optimising the cost structure. Baxter were successful here – they were able to effectively double operating margins from low single digits to mid-to-high teens over a relatively short four-year period. Secondly, accelerating sales growth through a more focused R&D effort. This is inherently more difficult than cost optimisation and on this front success has been muted with only moderate impact to revenues from new product introductions. Finally, capital deployment through Baxter’s significantly under-levered balance sheet. Several smaller bolt-on acquisitions were nicely complementary to the existing portfolio, but in early September the company announced the acquisition of Hil-Rom Holdings, a medical device company with leading positions in bed systems and patient monitoring. The deal is significant at US$12.5bn in size, and exhausts all balance sheet latency in one fell swoop."
7. Bausch Health Companies Inc. (NYSE:BHC)
Glenview Capital’s Stake Value: $211.5 million
Percentage of Glenview Capital’s 13F Portfolio: 4.2%
Number of Hedge Fund Holders: 48
Bausch Health Companies Inc. (NYSE:BHC) is a Canadian multinational pharmaceutical company that develops and sells drugs primarily for skin, gastrointestinal and neurological diseases. Glenview Capital holds nine million shares in the company but the hedge fund Icahn Capital LP takes the lead with nearly 35 million shares as of Q1 2022.
On June 13, JPMorgan analyst Chris Schott resumed coverage of Bausch Health Companies Inc. (NYSE:BHC) with an Overweight rating and a price target of $12. That said, the analyst noted that the company's challenges like the Xifaxan patent litigation and Bausch & Lomb separation pathway seem well reflected in the stock's valuation.
Schott is of the view that this creates a favorable upside/downside for shares from the current level for investors willing to look at the complex story.
6. Fiserv, Inc. (NASDAQ:FISV)
Glenview Capital’s Stake Value: $217 million
Percentage of Glenview Capital’s 13F Portfolio: 4.3%
Number of Hedge Fund Holders: 58
Fiserv, Inc. (NASDAQ:FISV) is a multinational finance company that offers financial technology solutions to clients like banks, stock brokers, insurance companies and credit card issuers.
On June 8, Fiserv expanded the portfolio of payout options to businesses using its Carat operating system, to include digital checks. The new feature speeds the delivery of funds as well as cuts operational costs associated with paper checks.
On May 27, Tigress Financial analyst Ivan Feinseth raised his price target on Fiserv, Inc. (NASDAQ:FISV) to $152 from $150 and kept a Buy rating on the shares.
The analyst told investors in a research note that high consumer spending led to strong Q1 results for Fiserv, Inc. (NASDAQ:FISV) and recent acquisitions position the company well to gain its piece of the pie in e-commerce and bank IT verticals.
Fiserv, Inc. (NASDAQ:FISV) is a notable company in Glenview Capital’s portfolio in addition to Amazon.com, Inc. (NASDAQ:AMZN), Uber Technologies, Inc. (NYSE:UBER) and Meta Platforms, Inc. (NASDAQ:META) but unlike the latter three, it's one of the top stock picks of billionaire Larry Robbins.
ClearBridge Investments brought up Fiserv, Inc. (NASDAQ:FISV) in their Q4 2021 investor letter. Here’s what they said:
“While the threat of disruption risk to these established payment companies should not be taken lightly, it is important to note that many of these emerging disruptors are small relative to the massive global payments network and heavily reliant on the very payment infrastructure they are trying to disrupt. This led us to initiate a position in Fiserv, whose stock dropped to a level that embedded projections for negative long-term growth despite no current evidence of disruption. We think Fiserv will continue to grow despite perceived disruption risks given its scale and efficiency. Fiserv also owns cloud-based payments hardware and software system Clover, which is both bigger and faster growing than Square; this provides an additional degree of protection against further disruption risk.
Click to continue reading and see 5 Best Stocks to Buy Now According to Billionaire Larry Robbins. Suggested articles:
Disclosure: none. 10 Best Stocks to Buy Now According to Billionaire Larry Robbins is originally published on Insider Monkey.