Jeffrey Ubben’s ValueAct Capital continues to turn up the heat on Motorola Solutions. The San Francisco-based investor, which owns 9.96 percent of the shares, once again said in regulatory filing that the stock is undervalued and it intends to have conversations with the management. The latest updated filing on the stock, however, was triggered by the lower number of Motorola shares outstanding subsequent to the completion of the company’s recent buyback. ValueAct’s relationship with the company has not changed. Keep in mind that Bradley Singer, a partner at ValueAct, has sat on Motorola’s board for the past three years. In 2011 the Schaumberg, Illinois-based telecom-equipment company—formerly known as Motorola—spun off its mobile phone division into Motorola Mobility. The stock was up slightly on Tuesday.
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In a separate filing, ValueAct said it sold more than 1.8 million shares of New York-based MSCI for between $66.56 and $68.83, trimming the investment firm’s stake in the company best known for its stock indexes to 7.3 percent. In February, MSCI announced a compromise agreement with the San Francisco activist firm to expand its board to include three independent directors, including D. Robert Hale, a ValueAct partner. ValueAct had been seeking a board seat since August 2014. The stock is up between 25 percent and 30 percent since ValueAct began badgering the company for a board seat and 22 percent since it announced its agreement in February. The stock rose 1.5 percent Tuesday.
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On Tuesday Jeffrey Smith’s Starboard Value disclosed it owns 9.1 percent of Four Corners Property Trust, which holds real estate and restaurant assets spun off from Orlando, Florida-based Darden Restaurants. Starboard is the largest shareholder of Darden. Separately, Starboard Value sold about 500,000 shares of LSB Industries, trimming its stake in the chemical company to 4.9 percent. As a result, the New York activist will no longer need to file amended 13D forms when it sells additional shares.
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Carlson Capital disclosed it owns nearly two million shares of Forestar Group, or 5.85 percent of the real-estate and natural-resources company based in Austin, Texas. In a regulatory filing, the Dallas investor says it bought the stock because it is undervalued and not to change or influence the control or management of the company.
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Ricky Sandler’s Eminence Capital took advantage of the buy-one, get-nearly-three shares at the June stock price at Men’s Wearhouse. The New York hedge fund bought 1.36 million shares of the Houston-headquartered clothing retailer for $22.55 a share on November 6, boosting its stake to 12.7 percent. That was the same day the stock plunged more than 43 percent after reporting that comparable sales in the third quarter at its Jos. A. Bank stores fell 14.6 percent, “far below the company’s earlier expectations,” according to a press release. The company blamed the phase-out of its, well, Buy-One-Get-Three promotions.
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The situation just goes from worse to disastrous for one-time hedge fund favorite SunEdison. Shares of the Saint Peters, Missouri-based renewable-energy company plummeted another 22 percent to $5.77 after it reported a much larger loss than expected. The stock traded as high as $32.13 as recently as late June. It will be interesting to see who held onto the stock when 13F filings reflecting September 30 holdings are disclosed between now and Monday.
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Shares of hedge fund favorite Apple fell more than 3 percent to $116.77 after Credit Suisse, citing its research teams in Asia, reported that the company lowered its component orders by as much as 10 percent. Credit Suisse added that the cuts appear to be driven by weak demand for the new iPhone 6. The bank did not adjust its $140 price target or Outperform rating, however.
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Shares of Hertz Global Holdings, a popular hedge fund holding, fell slightly after several investment banks trimmed their price targets for the stock. Deutsche Bank reduced its target from $27 to $26 while Credit Suisse cuts its target from $23 to $21, noting that the Park Ridge, New Jersey company “underwhelmed on top-line growth” when it reported third-quarter results.
