Glenview Capital Increases PHH & Teradyne Stakes

Larry Robbins' hedge fund Glenview Capital has filed two 13G's with the SEC recently.


Increases PHH Corp (PHH) Stake

First, Glenview has disclosed a 7.59% ownership stake in PHH Corp (PHH) with over 3.85 million shares.  This means that Robbins boosted his position by 1 million shares since the end of the third quarter.  The filing was made due to activity on November 21st.

The company has a large share buyback program in place, a common link in many of Robbins' investments these days.

Per Google Finance, PHH is "an outsource provider of mortgage and fleet management services. PHH operates in three segments: Mortgage Production, Mortgage Servicing and Fleet Management Services. The Company provides mortgage banking services to a range of clients, including financial institutions and real estate brokers, throughout the United States. The Company’s mortgage banking activities include originating, purchasing, selling and servicing mortgage loans through its wholly owned subsidiary, PHH Mortgage Corporation and its subsidiaries (collectively PHH Mortgage). It provides commercial fleet management services to corporate clients and government agencies throughout the United States and Canada through its wholly owned subsidiary."


Boosts Teradyne (TER) Position

Second, Glenview has revealed a 5.53% ownership stake in Teradyne (TER) with over 11.9 million shares.  They've boosted their holdings in the company by over 4 million shares since the end of Q3.  The 13G filed with the SEC was required due to portfolio activity on November 6th.

Robbins recently pitched TER at the Invest For Kids Chicago conference.

Per Google Finance, Teradyne is "a supplier of automatic test equipment. The Company designs, develops, manufactures and sells automatic test systems and solutions used to test semiconductors, wireless products, hard disk drives and circuit boards in the consumer electronics, wireless, automotive, industrial, computing, communications and aerospace and defense industries. The Company's automatic test equipment products and services include semiconductor test systems, wireless test systems, and military or aerospace test instrumentation and systems, storage test systems, and circuit-board test and inspection systems. The Company’s customer base includes integrated device manufacturers, outsourced semiconductor assembly and test providers, wafer foundries, fabless companies, developers of wireless devices and consumer electronics, manufacturers of circuit boards, automotive suppliers, wireless product manufacturers, storage device manufacturers, and aerospace and military contractors."


For more from this hedge fund manager, head to Larry Robbins' presentation at Capitalize For Kids Sohn Canada.

Larry Robbins' 4 Long Ideas at Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is Larry Robbins of Glenview Capital who pitched Tenet Healthcare (THC), eBay (EBAY), Teradyne (TER), and Cadence (CDNS).


Larry Robbins' Invest For Kids Chicago Presentation

•    More constructive than average on the long side. Portfolio trading at ~13x PE.
•    Excess cash at corporates remain high. Akin to Michael Jordan sitting on the bench looking to put up points.
•    Avg HY company can borrow at 6.4% pre-tax. Never been as cheaper or deeper.
•    Shareholder engagement at all time high. Notes Jeff Ubben at MSFT. Ideas: Tenet, EBay, Teradyne, Cadence


•    Tenet Healthcare (THC) – hospital stocks traded down 10% recently. Strong core growth, operating leverage, Vanguard health M&A, reforms provide multi-year growth tailwind, hidden undervalued conifer asset, forward year capital deployment opportunity, industry consolidation all adds up.
•    Unemployment is down and insurance is up which helps. M&A synergies are ramping and achievable for the Vangaurd transaction.
•    Only 7MM Americans have signed up for exchanges, half already had insurance. Vast majority in front.
•    Most hospitals are not for profit. Not just charter, but also income statement.
•    11 hospitals for every person in the house of rep. They are not going to bankrupt the hospital operators (big employers).
•    #1 self-pay/uninsured has gone down. #2 amount of Medicare coverage has increased around 11%. Some cases mid twenties. More people can pay their builds = more profits and revenues for hospitals.
•    Why is the health care bill insulated?? Repeal would take 60 votes from senate and a signature from the President. Want to go after the medical device tax, individual mandate (doesn’t affect hospitals). They are going after the parts not the whole.
•    Public approval for ACA growing.
•    Stocks traded down, provided entry point.
•    Tenet has a 90% + return on repurchases.
•    As they digest vanguard, instead of de-levering, should take advantage of the credit markets to maintain 5x leverage. Could buyback all of the company all else equal (won’t happen, since the share price wouldn’t stay still).
•    Companies who consistently repurchased shares have created value, not a short-term play.
•    Hidden gem is a RCM. Generates $200MM in EBITDA, RCM companies garner higher multiples. Conifer has higher growth than comps on both revenue and EBITDA. Peers trade at 16x EBITDA, versus Tenet at 8x for the whole.
•    If you took every publicly operated hospital operator and combined them, that would be only a 13% market share, so further consolidation is possible, especially considering synergies.
•    Thinks the monetization of Conifer and consolidation are possible catalysts.


•    eBay (EBAY) is the next idea.
•    2/3 of Ebay is the market place and 1/3 is Paypal. Third business is hoarding cash ($15b).
•    Doing the spin-off after shareholder pressure.
•    Growing revenue at 14%, EPS at a higher clip at 15x earnings give or take.
•    Like Ebay as it grows twice as fast as everything else. Higher margins.
•    Back out Paypal at 16x FY16E earnings, creating marketplace at ~12x.
•    People are scared of Paypal competition. It is like being scared of the 12th edition of the Halloween movie.
•    Opportunity to buy two great businesses at a cheap price. Once they separate businesses, marketplace will lever up to 2x net debt. Allow for them to buy ~22% of the PF company.
•    Thinks they can handle higher leverage of 3x – 4x.
•    Event-driven guys left eBay due to other problems (Shire/Fannie/Ebola). Allowed for Glenview to do time arbitrage.
•    Doing everything ppl want them to do. Just have to wait for the actual event to happen. Time arbitrage.
•    Ebay is like a divorce. One is focused on a lifetime of shopping, the other focused on a lifetime of payments.
•    Might be attractive to other players. May want to do a SA/JV or acquisition.
•    Acquirers could pay 22x earnings or more and be hugely accretive.


•    Teradyne (TER) – semiconductor test equipment, lots of cash.
•    High market share (although shrinking), their share has grown at 47% share. They love oligopolies due to smart pricing.
•    Need to fix the lazy balance sheet.
•    Victim of their own success. Buy rates troughed and are now peaking up. 18% is the wireless test business, does have cyclical components.
•    Has $1.2B of cash, don’t need  that much cash,


•    Cadence Design (CDNS) is the next name. Same opportunity as above. Revenue growth is accelerating. Months away from launching a new hardware emulation platform.
•    Overcapitalized balance sheet.

For more from this hedge fund manager, Robbins recently shared other investment ideas at Capitalize For Kids Sohn Canada as well as the Robin Hood Investors' Conference.


Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.