Glenview Capital Management founder Larry Robbins is upbeat about the development of Covid-19 vaccines, making him optimistic about some sectors but still wary of others.
“For the first time in this battle, in the last several weeks there’s been real light at the end of the tunnel,” Robbins said Thursday at the New York Alternative Investment Roundtable’s online event. “We do believe that there will be millions of doses given in December,” he said, with frontline workers and the elderly being among the first to receive it and the second phase of distribution beginning as early as March.
“We think Pfizer files tomorrow,” Robbins said, referring to government authorization for its Covid-19 vaccine. “We think we are in a cadence now where every week, or every two weeks, you’re going to get good news from another supplier,” he said, explaining that means good data on their vaccines or ways to ship them to the markets.
Robbins expects that beaten-down hospital stocks — such as Glenview’s largest holding, Tenet Healthcare Corp. — are likely to rise as deferred procedures such as knee replacements and cataract surgeries get done once vaccinated patients feel safe.
“If one wanted to simply throw darts, I think you can own the hospital industry, the hospital-supply industry,” he said. “I think you can own the medical-device industry, I think you can own the lab industry.”
While stocks in these areas have risen from their lows, Robbins still sees “enormous amount of growth and value in front of them.” That’s in contrast with other industries.
Glenview is not long on areas such as airlines and cruise ships, because of the material amount of cash they’re losing each day the pandemic persists, according to Robbins. “Good news rallies” for such businesses “are extremely short-lived,” he said, because of all the borrowing they’ve done to fund operating losses. “That’s debt they’ll eventually have to pay back,” he said.
The U.S. is seeking to recover from a “deeper hole” in the pandemic because of the prevalence of Covid-19 in the country compared with areas such as Australia and Asia, according to the Glenview founder. He said those regions have done a “phenomenal job of controlling the disease.”
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Meanwhile, as the world looks for the end of the pandemic, investors are focused on the efficacy and safety of Covid-19 vaccines — which are proving “near perfect,” according to Robbins.
“The results are great,” he said, with about a 95 percent reduction in transmission of the disease. “It’s much more successful than dampening the severe impacts of the flu,” he added, explaining that influenza vaccines are about 50 percent effective. And while only a short-term outlook is possible at this stage, Robbins said the safety profile of Covid-19 vaccines appears “excellent” and consistent with other vaccines that people take.
It’s too soon to know how long Covid-19 vaccinations may last, but society can’t afford to wait for that answer, according to Robbins. His base case is that people will need to receive a boost every couple of years.
“Even if it only lasts six months to a year, it would be best for our population health — also our economy — for vaccines to move through the system,” he said. “There’s no scientific reason to have any doubt about the long-term safety issues.”
