Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Jeff Smith’s Starboard Value Reduces Stake In LSB Industries Inc. (LXU) to 6.1%

Page 1 of 2

In a 13D filing, Jeffrey Smith’s Starboard Value disclosed a 6.1% stake in LSB Industries Inc. (NYSE:LXU), which contains 1.39 million shares. The position was reduced from 1.73 million shares reported in an earlier filing. Starboard holds an activist position in the company, has appointed representatives on the board, and has been trying to pursue the management to enhance shareholder value.

Jeff Smith

Starboard Value is a New York-based activist hedge fund co-founded by Jeffrey Smith and Mark Mitchell in 2002. The investment firm takes on a fundamental approach to investing and primarily focuses on small-cap publicly traded U.S. companies. Starboard Value has had great success in generating attractive returns on its investments and managed to earn money on 88% of its activist investments. The fund has generated an annualized return of 22% since its inception in 2002, greatly outperforming the S&P 500 thus far. Starboard has been very active lately, as it reshuffled several holdings this week. For instance, the hedge fund has gone activist on MedAssets Inc. (NASDAQ:MDAS) with a stake of 8.7% in the company, but also sold almost its entire stake in Unwired Planet Inc. (NASDAQ:UPIP) to MAST Capital Management. In the meantime, Starboard Value oversees an equity portfolio with a market value of $4.81 billion as of March 31.

Jeffrey Smith
Jeffrey Smith
Starboard Value LP

Following activist funds like Starboard is important because it is a very specific and focused group of investors, which don’t have to wait for catalysts to realize gains in the holding. A fund like Starboard can simply create its own catalysts by pushing for them through negotiations with the company’s management and directors. In recent years, the average returns of activist hedge funds have been much higher than the returns of an average hedge fund. Furthermore, we believe do-it-yourself investors have an advantage over activist hedge fund investors because they don’t have to pay 2% of their assets and 20% of their gains every year to compensate hedge fund managers. We have found through extensive research that the top small-cap picks of hedge funds are also capable of generating high returns and built a system around this premise. In the 32 months since our small-cap strategy was launched it has returned over 123% and beaten the S&P 500 ETF (SPY) by more than 66 percentage points (read more details). Soon, we’ll be releasing a new quarterly newsletter written by former activist hedge fund analyst Michael Bland that tracks ten or so activist campaigns at any given time.

As stated earlier. Starboard Value has been involved in an activist campaign in LSB Industries for more than a year and in April entered into a settlement agreement with the company, under the terms of which LSB increased the size of its Board to 13 directors and appointed five new directors nominated by the investor. Moreover, in March, Starboard sent a letter to LSB Industries, in which it stated that the company is undervalued and requires changes in operations, strategic directions and management structure.

LSB Industries Inc. (NYSE:LXU) is a holding company that engages in manufacturing and marketing operations through its subsidiaries. Specifically, the company operations in two segments: Chemical Business and Climate Control Business. LSB’s chemical business manufactures and sells nitrogen-based chemical products for the agricultural, industrial, and mining markets. Whereas, the climate control business manufactures and sells a range of heating, ventilation and air conditioning (HVAC) products. The shares of LSB have dropped by nearly 27% year-to-date after plummeting by over 34% during the trading session on August 7 as the company published its financial results for the second quarter of this year.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!