AEP Industries (AEPI): KSA Capital Management Trims Activist Stake To 17.04%

KSA Capital Management, run by Daniel Khoshaba, has reduced its activist stake in AEP Industries (NASDAQ:AEPI). In a newly-amended filing with the U.S. Securities and Exchange Commission, KSA Capital disclosed that it holds 865,584 AEP Industries (NASDAQ:AEPI) shares, which represents a decrease from 881,792 shares the fund held earlier. The new stake is equal to 17.04% of the company’s common stock.

AEP Industries (NASDAQ:AEPI)

Founded by Mr. Khoshaba in 2004, KSA Capital Management is based in Morristown, New Jersey. The fund has been managed by Mr. Khoshaba since its inception and returned around 10% per year since its start. Mr. Khoshaba previously worked at Deutsche Bank AG as managing director and senior analyst. Mr. Khoshaba also served as a director of AEP Industries (NASDAQ:AEPI) from February 11, 2010, to August 9, 2010.

KSA Capital Management invests in industrial, materials, and consumer goods stocks. As of the end of the third quarter of 2014, the value of the KSA Capital Management’s equity portfolio value totaled nearly $433 million, up from around $371 million in the prior quarter. The fund disclosed its largest stakes in AEP Industries (NASDAQ:AEPI), TRW Automotive Holdings Corp. (NYSE:TRW), and Owens-Illinois Inc (NYSE:OI). KSA Capital Management reported upping its stake in TRW Automotive Holdings Corp. (NYSE:TRW) to 79,250 shares, accounting for 1.85% of its portfolio. At the same time, the fund increased its holding in Owens-Illinois Inc (NYSE:OI) by more than 30% to 254,313 shares, as of the end of September 2014. In addition, KSA Capital Management was bullish on SeaWorld Entertainment Inc (NYSE:SEAS), in which it upped its stake to 271,587 shares.

In April 2014, KSA Capital Management reported increasing its stake in AEP Industries (NASDAQ:AEPI) to 1.07 million shares from around 925,000 shares. Since then, AEP Industries (NASDAQ:AEPI) stock showed improvement, moving up by more than 50%.

AEP Industries (NASDAQ:AEPI) Director Lee C Stewart sold 370 shares of the company at a price of $55.35 a share on January 21. Following the sale, Stewart now holds 5,448 shares of the company.

New Jersey-based AEP Industries (NASDAQ:AEPI) engaged in manufacturing of plastic packaging films. The company makes more than 15,000 types of multi-purpose and flexible packaging films for the consumer, industrial, and agricultural markets. It has a market cap of more than $288 million, and institutional investors own 70% of outstanding shares of the company. For fiscal 2014, AEP Industries (NASDAQ:AEPI) posted a net loss of $5.5 million, or $1.03 per share, compared to net income of $10.7 million, or $1.92 per share in fiscal 2013. According to the company, its fiscal 2013 results included a gain on purchase of the Transco business of $1 million. AEP Industries (NASDAQ:AEPI) reported that its net sales in 2014 amounted to $1.2 billion, up from $1.1 billion in 2013. The gain was the result of a 6% increase in average selling prices partially offset by a 1% decrease in sales volume compared to the prior year. For fiscal 2014, the company booked gross profit of $121.9 million, representing a $32.6 million decrease from 2013.

“We are optimistic that our cash flows in fiscal 2015 will improve as cost cutting initiatives are realized, major capital expenditure projects decline, and we believe margins will improve as the resin markets stabilize and volume grows,” AEP Industries (NASDAQ:AEPI) Chairman, President and Chief Executive Officer (CEO) Brendan Barba said in a statement.

On Thursday, AEP Industries (NASDAQ:AEPI) traded down by 0.89% to $54.81. The stock has a 52-week high of $58.88, and a 52-week low of $29.67. The stock has moved up by more than 32% in last six months. However, the company’s share price dropped by 6% in last month.

Other largest shareholders of AEP Industries (NASDAQ:AEPI) include Renaissance Technologies, led by Jim Simons, which owns 311,646 shares of the company, as of the end of the third quarter of 2014. First Eagle Investment Management, managed by Jean-Marie Eveillard, also sees value in the company, in which the fund revealed ownership of 281,314 shares at the end of September 2014. AEP Industries (NASDAQ:AEPI) is also a favorite stock of Nokomis Capital, run by Brett Hendrickson, which reported ownership of 149,448 shares of the company, as of the end of the third quarter.

Disclosure: none