5 Stocks Activist Investors are Buying

4. Kohl’s Corporation (NYSE:KSS)

Number of Hedge Fund Holders: 37

Kohl’s Corporation (NYSE:KSS) operates as an American retail chain, providing branded apparel, footwear, accessories, beauty, and home products via its stores and online selling. 

Activist investors began pressuring Kohl’s Corporation (NYSE:KSS) in April 2021, calling for experienced directors with retail experience, reduced inventory levels, and a sale-leaseback of part of the company’s non-core real estate. In 2021, activist investor Macellum Capital Management, which owns nearly 5% of Kohl’s Corporation (NYSE:KSS), pushed the company to refresh its board of directors, suggesting nine new directors. Macellum was still not satisfied with the performance, and stated that Kohl’s Corporation (NYSE:KSS) can optimize its balance sheet by monetizing $4 billion of its real estate and returning the proceeds to shareholders through a buyback, which would elevate the stock. The activist investor observed that if Kohl’s Corporation (NYSE:KSS) was unwilling to make these changes, there are strategic buyers who would purchase Kohl’s Corporation (NYSE:KSS) at an attractive premium. 

On December 9, activist investment firm Engine Capital, which owns a 1% stake in Kohl’s Corporation (NYSE:KSS), pushed the company to sell itself or separate its ecommerce business. Engine Capital believed that private equity firms might pay $75/share for  Kohl’s Corporation (NYSE:KSS), whose digital business alone is worth $12.4 billion. On January 18, Starboard Value-backed Acacia Research was in talks with Kohl’s Corporation (NYSE:KSS) to bid on an acquisition. 

BofA analyst Lorraine Hutchinson on January 26 moved to No Rating on Kohl’s Corporation (NYSE:KSS) after the company confirmed that it has received letters expressing interest in acquiring the company, citing her belief that the “stock is no longer trading on fundamentals”.

In Q3 2021, Arrowstreet Capital held the biggest stake in Kohl’s Corporation (NYSE:KSS), owning 4.2 million shares worth roughly $200 million. Overall, 37 hedge funds in the third quarter database of Insider Monkey were bullish on the stock.