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Starboard Value Cuts Stake in RealD (RLD), Stadium Capital Buys More of This Retailer, Plus 2 Other Moves

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The handful of hedge fund managers who have a strong record of outperforming broader market benchmarks do not manage capital for the masses. The 2-and-20 fee structure makes it really expensive for individual investors to put their money into hedge funds, but investors can at least imitate the smart money by tracking their moves. Of course, one does not get to see the full picture of funds’ portfolios by analyzing their 13Fs or other filings, but it is possible to make money by mimicking hedge funds’ long-only positions. Truth be told, I would not suggest anyone blindly follow hedge funds’ moves, as individual investors need to develop their own investment hypotheses. But tracking hedge funds’ moves can be very handy while seeking out high-potential investing opportunities. For that reason, this article will discuss four filings submitted by Jeffrey Smith of Starboard Value LP, Nathaniel August of Mangrove Partners, and other hedge fund managers.

Out of thousands of stocks that are trading on the market every day, it can be difficult sometimes to pick the right investment that can deliver market-beating returns. Here’s where our research comes in. By analyzing the equity portfolios of 700+ top investors, we can see what stocks they are collectively bullish on and use this data to compile a portfolio that can outperform the market. We have determined through this process that the best strategy is to follow the 15 most popular small-cap picks among hedge funds, which have delivered an alpha of around 81 basis points per month in our backtests covering the period between 1999 and 2012 (see more details).

According to a freshly-amended 13D filing, Scopia Capital Management LP, founded by Matt Sirovich and Jeremy Mindich, currently owns 3.61 million shares of Itron Inc. (NASDAQ:ITRI), which account for 9.5% of the company’s outstanding shares. This compares to the 3.26 million-share stake revealed in mid-December through the fund’s most recently amended 13D filing on the company. Let us remind you that Scopia Management and Jerome J. Lande and Craig Rosenblum’s Coppersmith Capital Management teamed up in September 2015 to launch an activist campaign against the technology and services company. In December 2015, the company announced an agreement with the two investment firms, under which Jerome Lande and Peter Mainz, the latter a candidate identified by Coppersmith, were appointed to the Board of Directors, effective beginning in 2016. Earlier this week, Scopia and Coppersmith announced that both Jerome J. Lande and Craig Rosenblum are set to join Scopia Management in the upcoming months.

The technology company that provides end-to-end smart metering solutions to electric, natural gas, and water utilities has seen its shares decline by 15% over the past 12 months. Itron Inc. (NASDAQ:ITRI) generated revenue of $1.4 billion during the first nine months of 2015, compared to $1.5 billion reported for the same period of the prior year. The currency exchange fluctuations impacted the company’s top-line results quite significantly, considering that Itron’s revenue on a constant currency basis increased by $66.7 million year-over-year. Wall Street analysts anticipate that the company will deliver earnings per share of $2.16 in fiscal year 2016, which provides the stock a forward price-to-earnings multiple of 14.60 (compared to the 15.38 ratio for the S&P 500 Index). There were 16 hedge funds tracked by Insider Monkey with positions in Itron at the end of the third quarter, which amassed over 16% of the company’s shares. Glenn J. Krevlin’s Glenhill Advisors acquired a 309,000-share stake in Itron Inc. (NASDAQ:ITRI) during the September quarter.

Matt Sirovich And Jeremy Mindich
Matt Sirovich And Jeremy Mindich
Scopia Capital

Let’s move on to the next pages of this article, where we discuss three other filings recently submitted with the SEC.

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