Mick McGuire’s Marcato Capital Issues Another Presentation on Sotheby’s (BID)

Richard McGuire of Marcato Capital Management has disclosed, in a filing with the SEC, its presentation on  Sotheby’s (NYSE:BID), from the “Active-Passive Investor Summit.” In the presentation, Marcato presented its case on the company and analyzes the measures that could increase its value. Marcato holds around 4.56 million shares of Sotheby’s, equal to 6.6% of the outstanding stock. Moreover, the fund stated that it supports the nominees for the board of directors appointed by Dan Loeb‘s Third Point last month.

Mick McGuire

Marcato claims that the company has a significant level of unproductive capital, which could be reallocated or returned to shareholders without affecting business operations. Improving these capital allocation policies could benefit the cost-return relationship of Sotheby’s (NYSE:BID) and the long-term shareholder value. According to the fund, even after the company pays a special dividend worth an aggregate $300 million, it still could unlock over $1.0 billion of additional capital in the next 12 months.

Currently, Sotheby’s (NYSE:BID) performance has been lower in comparison with its competitors. The company has done some steps to change the situation, but some moves still need to be done, such as the return of excess capital, assuming some revenue growth opportunities, and the optimization of the expense structure of the company, the shareholder said.

“Board members that bring material ownership would ensure a sustained sense of urgency and a sharper focus on shareholder value creation,” Marcato also said in its presentation.

The full presentation attached to the SEC filing can be found here.

The stock of Sotheby’s (NYSE:BID) has declined by around 23% since the beginning of the year. On Monday, Third Point issued a letter sent to Sotheby’s shareholders urging them to vote for its nominees at the next meeting.

“On a head-to-head basis, we are confident our nominees have more relevant experience, more impressive track records of long-term value creation, and will bring more valuable insight to better represent Sotheby’s shareholders. We believe you will agree and ask that you support the Shareholder Slate by voting your white proxy card today,” the letter said.

In October 2013, Marcato issued another presentation from the ”Excellence in Investing: San Francisco” conference. The fund stated that Sotheby’s held real estate and financing operations that could represent strong points overlooked by investors. Moreover, Marcato suggested that the auction house held $1.3 billion in trapped equity value, which should have been invested in share repurchases bringing more value in the long-term run.

Disclosure: none

Recommended Reading:

Mick MsGuire and Marcato Capital’s Top Stock Picks

The Top Q4 Picks of Dan Loeb’s Third Point

Dan Loeb and Third Point Nominate Three Directors to Sothebys (BID)’s Board

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

Subscribe

Enter your email:

Delivered by FeedBurner

X

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!