market folly

At the Delivering Alpha Conference, Larry Robbins of Glenview Capital, Jacob Gottlieb of Visium, and Kris Jenner of Rock Springs Capital sat down to talk the Affordable Care Act and Obamacare.


Larry Robbins, Glenview Capital

Robbins notes that Thermo Fisher Scientific (TMO) is their largest position.  He says it's independent of the Affordable Care Act as it's 75% consumables.  The growth there is driven by capital allocation.  The space will benefit from sequestration ending in 2014.

He also likes Walgreen's (WAG).

Robbins expects an increase in pharmaceutical consumerization after Obamacare starts.  Robbins also noted he still likes McKesson (MCK) ~ we've highlighted in the past how it's been one of his largest holdings for some time.

Glenview's founder notes that healthcare used to trade at a 10% premium to the market, but their portfolio trades at a 25% discount so he loves if companies buy back stock or make acquisitions.  He sees hospitals likely to continue consolidation, which means the for-profit players gain share.

With the Affordable Care Act and more people getting insured, you'll see growth on growth (especially in hospitals) but on the other hand, there will be losers down the chain as they're over-earning now and will get squeezed.

In the space, big pharma have a lot of cash but not a lot of innovation.  Small companies are exactly the opposite, so consolidation will continue there.

If you missed it, Robbins recently made a very rare media appearance and talked about HMA, THC and what he thinks about this market.


Jacob Gottlieb, Visium Asset Management

Jacob Gottlieb of Visium voiced his concern over taxes on healthcare as it could be counterproductive to making more affordable and better quality care.  As far as what his picks go, he likes healthcare IT providers and well-run hospitals.


Kris Jenner, Rock Springs Capital

Kris said there will be winners and losers in all of this.  The opportunities in healthcare are robust and based in innovation.  That innovation will be more-so in business models than new drugs.  He said he likes Vertex Pharmaceuticals (VRTX) and Gilead Sciences (GILD).

Thanks to @EquityNYC for live tweets on this panel.


For more from the Delivering Alpha Conference, head to:

- John Paulson on gold, real estate & merger arbitrage

- Nelson Peltz on PepsiCo & Mondelez 

- Best Ideas Panel with Mark Kingdon, Chris Hohn, Jim Chanos & Lee Cooperman

- Carl Icahn on activism