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Advanced Drainage Systems Inc (WMS): 12 West Capital More than Doubles Its Stake

As a new filing with the Securities and Exchange Commission shows, Joel Ramin’s 12 West Capital Management has boosted its stake in Advanced Drainage Systems Inc (NYSE:WMS). The fund owns around 3.25 million shares of the company, up from 1.51 million shares disclosed in its latest 13F filing. Following the hike, Mr. Ramin’s fund holds some 6.1% of the company’s outstanding common stock; the stake is passive by nature.

Advanced Drainage Systems

Mr. Ramin is a former employee of Roberto Mignone’s Bridger Capital. He founded 12 West in 2011 and currently manages an equity portfolio worth around $857 million that is focused on Services stocks. At the end of October, the fund added RetailMeNot Inc (NASDAQ:SALE), reporting ownership of more than 2.87 million shares, equal to 5.3% of the common stock. However, the stock slumped at the beginning of November, and lost around 24% since the fund initiated a position.

Advanced Drainage Systems Inc (NYSE:WMS) is a $1.1 billion manufacturer of thermoplastic pipes for water management segment and drainage system solutions in the construction and infrastructure. The company went public during the third quarter of 2014 and since then its stock appreciated by more than 30%. 12 West has raised its stake as the company had announced a follow-on public offering under which it plans to sell 10 million common shares at $21.25 per unit held by ASP ADS Investco that received all the proceeds from the offering.

As the stock went up following the IPO, analysts also became more optimistic about Advanced Drainage Systems Inc (NYSE:WMS)’s future. so in the last couple of months the stock has witnessed several upgrades and price targets hikes. At the beginning of November, RBC Capital surged the price target for Advanced Drainage Systems’ stock to $25 from $22 with ‘Outperform’ rating, while in October, Barclays raised the price target to $24 from $22 with ‘Overweight’ rating.

Richard S. Meisenberg‘s ACK Capital Management is another fund that initiated a stake in Advanced Drainage Systems Inc (NYSE:WMS) as the company went public and disclosed holding 419,500 shares in its latest 13F filing.

In addition, in the last couple of days, the company has seen an increased interest from some of its insiders. Robert Eversole, a director of Advanced Drainage Systems Inc (NYSE:WMS), has acquired 4,600 shares of the company last week, at an average price of $21.69 per share and raised his stake to  21,663 shares. Joseph Chlapaty, the chairman, president, and CEO of the company, has purchased recently 27,000 shares at $21.87 per unit, giving him ownership of some 182,300 shares.

Disclosure: none