Usually, activist shareholders can use a consent solicitation to remove all of the members of a company’s board of directors whenever they deem it beneficial to do that, which is a powerful tool Starboard Value could use in order to unlock shareholder value at a higher pace. The letter also suggested that if MedAssets pursues the plan of action outlined by Starboard Value, the healthcare technology company could reach a share price of $37-$46 by the end of 2016. Consequently, this yields an upside potential for MedAssets of at least 56%, which theoretically turns this stock into a great buying opportunity.
MedAssets Inc. (NASDAQ:MDAS) is an American healthcare performance improvement company that is assisting healthcare providers in making informed changes to drive total cost reduction, financial optimization, clinical delivery alignment and efficiency. The company’s solutions, industry experts and data-driven methodologies are the core of MedAssets’s business, which is believed to be at the center of improving the quality and effectiveness of the healthcare industry. Although the shares of MedAssets have gained over 19% since the beginning of the current year, Starboard Value believes that the stock is deeply undervalued. Within our database, Claus Moller’s P2 Capital Partners is among the largest investors in MedAssets Inc. (NASDAQ:MDAS) with an ownership stake of 2.84 million shares.
Let’s now take a brief look at the company’s recent financial results, which surely explain why the company’s stock surged on July 29. MedAssets has posted better-than-expected financial results for the second quarter of the current year that ended June 30, 2015. The healthcare-focused company posted a net revenue of $190.4 million for the second quarter of this year, up 8.6% from the $175.4 million figure reported in the same quarter a year ago. At the same time, the net income of the company for the quarter came to $6.3 million or $0.10 per share, compared to a net income of $6.6 million or $0.11 per share reported a year ago. It’s also worth mentioning that MedAssets raised the midpoints of its full-year consolidated financial guidance for 2015, expecting a total net revenue figure in the range of $756-768 million, which would yield a year-over-year increase of at least 5%.
Considering the fact that the reputable hedge fund Starboard Value initiated an activist position in MedAssets and that the upside potential is believed to be at least 56% by the end of 2016, the stock might actually represent a great buying opportunity now. Starboard has a great record of successful activist campaigns, such as the one at Darden Restaurants, Inc. (NYSE:DRI), where the investor managed to replace the entire board of directors with its own slate of candidates.
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