Clinton Group, a fund founded by George E. Hall, has recently disclosed a letter sent to the shareholders of Campus Crest Communities Inc (NYSE:CCG), which is one of the largest holdings in Clinton Group’s equity portfolio. The fund owns 619,400 shares of the company, according to its latest 13F filing, and has recently partnered with Campus Evolution Villages, LLC. In the letter, both parties expressed their disappointment with the performance of Campus Crest Communities and urged other shareholders to support their nominees to the board of directors.
Clinton Group is an activist fund that over the years has engaged in several situations involving companies like The Wet Seal, Inc. (NASDAQ:WTSLQ), ValueVision Media Inc (NASDAQ:VVTV) and NutriSystem Inc. (NASDAQ:NTRI). The fund first won a proxy fight with The Wet Seal and appointed four directors to the board. However, over the last calendar year, the stock of The Wet Seal lost around 99%, and recently the company announced plans to file for bankruptcy. Nevertheless, Clinton raised its position in the company during the fourth quarter to 4.36 million shares. Moreover, the latest 13F filing showed that the fund has drastically reshuffled its equity portfolio amid the departure of its former manager Greg Taxin. Clinton closed over 200 positions and initiated stakes in some 280 companies. Overall, the portfolio is very diversified and is valued at $320.85 million, up from $247.20 million in the previous quarter.
Clinton disclosed its largest stake in EVINE Live Inc (NASDAQ:EVLV), formerly ValueVision Media. Clinton reported holding 1.16 million shares of the company, valued at $7.64 million. At the end of the third quarter, Clinton reported ownership of over 1.24 million shares of ValueVision. The fund won a proxy fight against ValueVision in June 2014 and managed to replace the CEO and overhaul the board of directors of the company, which was renamed by the new management in November to EVINE Live Inc (NASDAQ:EVLV). Since Clinton won the proxy fight, the stock of the digital commerce company has gained around 27%. Aside from Clinton, EVINE Live Inc (NASDAQ:EVLV) was also included in the equity portfolios of Paul Reeder and Edward Shapiro’s PAR Capital Management and J. Carlo Cannell‘s Cannell Capital, which reported holding 3.56 million shares and 3.09 million shares respectively.
Clinton Group also revealed ownership of 2.34 million shares of Atlantic Power Corp (NYSE:AT), the position valued at $6.33 million representing the second-largest holding in its equity portfolio. Atlantic Power Corp is a small-cap owner and operator of a fleet of power generation and infrastructure assets in the US and Canada. The stock lost around 27% in the last six months and the fact that Clinton Group targeted the company in October represented good news for investors. Earlier Atlantic Power Corp (NYSE:AT) had tried to sell itself. Clinton Group intended to further push for a sale of the company at $4.00 per share after a strategic review conducted in September. In an exchange of words back in October, Clinton stated that it believed that the sale of the company at $4.00 per share was possible, but the company replied that it had not received any offers above $3.04 per share, which was the price of the company on May 1 when rumors about a sale started to emerge. However, with the involvement of an activist investor, Atlantic Power Corp (NYSE:AT) gained some attention from investors. For example, Nathaniel August‘s Mangrove Partners initiated a $15.31 million stake in the company during the fourth quarter that contains 5.64 million shares.
In Stillwater Mining Company (NYSE:SWC), Clinton upped its stake by 90% to almost 365,000 shares valued at $5.38 million. Stillwater Mining is another successful proxy fight won by Clinton Group. At the end of 2012, Clinton issued a letter to the company’s board of directors demanding significant changes in operations and management. Additionally, the fund appointed eight directors to be elected to Stillwater Mining Company (NYSE:SWC)’s board of directors. After several months of an aggresive proxy fight, shareholders elected four of Clinton’s nominees, one of whom was appointed as chairman of the board. Since the investor won the proxy fight, the stock of the producer of palladium and platinum appreciated by around 17%. One of the largest shareholders of Stillwater Mining Company (NYSE:SWC) is Kerr Neilson‘s Platinum Asset Management, which held 13.84 million shares at the end of December.
Next in line is Clinton’s recent activist target, Campus Crest Communities Inc (NYSE:CCG). In the letter that was disclosed in a filing with the Securities and Exchange Commission, Clinton and its new partner Campus Evolution Villages expressed their disappointment with the company’s current situation and stated that they have been uncovering many big issues related to capital allocation, spending and relationships within the board of directors of the company. Clinton and Campus Evolution also said that they have proposed to preserve three existing board members and replace the others, but Campus Crest Communities Inc (NYSE:CCG) rejected the offer. In this way, we might expect a proxy fight to emerge soon, although Clinton and Campus Evolution stated that they will do their best to avoid a long and expensive proxy contest. J. Alan Reid, Jr.’s Forward Management is another fund betting on the builder and manager of student housing properties; Forward held 4.08 million shares at the end of 2014.
Clinton’s fifth-largest position in terms of value is represented by CVS Health Corp (NYSE:CVS), in which the fund owns 32,700 shares valued at $3.15 million. The fund initiated a stake in the drug retailer during the fourth quarter, and has seen the stock gain some 8% since the beginning of 2015. CVS Health Corp (NYSE:CVS) was one of the more popular healthcare stocks during the last quarter of 2014, as 53 funds among those that we track disclosed positions, up from 44 funds a quarter earlier. Robert Rodriguez and Steven Romick’s First Pacific Advisors is one of the top shareholders of CVS Health Corp (NYSE:CVS), holding 6.89 million shares as of the end of 2014.
Disclosure: None
