In a joint filing agreement, Stephen V. Raneri’s Lioneye Capital Management – along with the other funds affiliated with this Manager – increased its stake slightly in Famous Dave’s of America Inc (NASDAQ:DAVE). According to the 13D filing with the Securities and Exchange Commission, the hedge fund now holds 702,900 Common Shares, representing 9.8% of the company’s outstanding stock, up by 48,900 shares. In accordance with the activist nature of its position, Lioneye Capital Management might hold discussions with the board of directors and other interested parties. The firm stated its intent to propose adjustments and new measures to the company’s management, in an attempt to increase shareholder value. Nevertheless, Mr. Raneri’s fund has not made public any specific plans for Famous Dave’s.
Lioneye Capital Management is a New York-based hedge fund that was founded by Stephen V. Raneri and Arthur J. Rosen. This small investment firm has a team of employees and uses event-driven strategy. Around 43% of the fund’s diversified equity portfolio, which is valued at around $1.8 billion, consists of stocks belonging to the finance sector. Excluding its holdings in ETFs, Lioneye Capital Management’s top picks include Asbury Automotive Group Inc (NYSE:ABG), Jarden Corp (NYSE:JAH), and GNC Holdings Inc (NYSE:GNC). The fund has been particularly bullish regarding its activist stake in Asbury Automotive Group, increasing its stake considerably throughout the past year. Strong financial results certainly motivated the large acquisitions of shares of mid-cap automotive retailer, which saw stock prices rise around 44% in 2014.
Famous Dave’s of America Inc (NASDAQ:DAVE) owns, operates, and franchises restaurants in the United States, Canada, and Puerto Rico under the name Famous Dave’s. It is renowned for its smoked, barbecue, and grilled meat, as well as entrée items and delicious side dishes using prepared proprietary seasonings, sauces, and mixes. The $201 million market cap company was founded in 1994 and is headquartered in Minnetonka, Minnesota. By the end of 2014, Famous Dave’s announced it was closing three under-performing restaurants and anticipating incurring impairment charges at another four locations. The good news for shareholders is that the sale of these restaurants will bring in additional cash, while costs are expected to drop in the long-run. As explained by Famous Dave’s CEO Ed Rensi, “Fiscal 2014 marked the beginning of a transition for Famous Dave’s, a process that we expect to continue into 2015. The current leadership team continues to evaluate the performance of our legacy company-owned portfolio as we drive toward a return to positive same store sales and improved unit and company-level profitability, while we actively pursue our refranchising strategy.”
Thanks to its latest acquisition of Common Stock, Lioneye Capital Management has become one of Famous Dave’s of America Inc (NASDAQ:DAVE)’s largest shareholders among institutional investors. The hedge fund certainly has reasons to be bullish on this stock, which grew by around 42% over the past year and is expected to keep the same pace. In addition, Mr. Raneri’s fund might influence the management, since the activist nature of the large stake allows it to make proposals regarding the company’s business.
In addition to Lioneye Capital Management, Famous Dave’s of America Inc (NASDAQ:DAVE) enjoys the backing of other institutional investors. Charles Davidson’s Wexford Capital for example disclosed a stake of 700,000 shares as at the end of the third quarter, representing 1.7% of its equity portfolio and making it the fund’s fourth largest holding. In the same sense, Brian Jackelow’s SAB Capital Management holds a position amounting to 689,800 shares, after increasing its exposure to Famous Dave’s by 9% during the third quarter. Even Jim Simons’ Renaissance Technologies continues to own around 300,000 shares of the stock in question, despite the 10% reduction in its stake disclosed in its latest 13F filing.
Disclosure: Pablo Erbar holds no position in any stocks or funds mentioned.
