Clifton Robbins Raises Activist Stake in MDRX

Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) has been increased in the equity portfolio of Clifton S. Robbins‘ Blue Harbour Group, according to a new filing with the Securities and Exchange Commission. Blue Harbour Group owns around 12.64 million shares of Allscripts Healthcare, the activist stake representing 7% of the company’s common stock. Previously, the fund reported ownership of approximately 8.94 million shares of the company.

Clifton Robbins Blue Harbour

Mr. Robbins has been constantly increasing its stake in Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) since the third quarter of 2012, when the fund initiated a stake, which initially contained around 1.25 million shares. The stock of Allscripts gained over 20% since then. Moreover, Blue Harbour stated that it has engaged previously in discussions with the company’s management and board of directors. However, despite the fact that Mr. Robbins is an activist investor and Blue Harbor has been betting mainly on activist situations for around a decade, the investor has never disclosed any proxy fights or any suggestions that it proposed to be implemented.

Nevertheless, the top holdings from Blue Harbor’s equity portfolio have mostly posted positive returns. The largest position is represented by Akamai Technologies, Inc. (NASDAQ:AKAM), which gained over 17.7% year-to-date and surged by over 173% over the last five years. The second-largest stake is in Babcock & Wilcox Co (NYSE:BWC) declined over the last year, although it still gained over 27% during the last five years.

However, while Blue Harbour has been bullish on Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), another investor, Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey has been cutting its stake in the company. At the end of September, the fund revelead reducing its position to 4.0% of the company, from 5.6% held previously. Healthcor Management has had a long-standing activist position, and over the last several years the fund played a major role in the company’s performance. The investor initiated a lawsuit against the company in 2012, which was settled with Allscripts nominating three independent directors to its board.

In addition, among the funds that we track, the majority increased their stakes in Allscripts Healthcare Solutions. David E. Shaw‘s D E Shaw boosted its position by more than a sixfold during the second quarter and currently owns some 973,000 shares, while Chuck Royce‘s Royce & Associates holds some 1.14 milion shares, up by 13% on the quarter.

Insiders at Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) have also been gaining profits from the stock of the company growth. For example, Michael Klayko, a director of the company, after purchasing stock at around $14.80 in August 2013, has been selling shares at over $18.00 at the beginning of the year. In August 2014, the same director acquired 3,500 shares, at the price of $14.41, and currently holds some 46,300 shares.

Moreover, several days before Blue Harbor Group raised its exposure to the company, Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), which provides clinical, financial, and information solutions to hospitals, reported signing a partnership with Citra Health Solutions, a company engaged in value-based care and reimbursement models. The partnership will allow both companies to take advantage of each other’s services and provide them to their customer bases.

Since hedge fund bullish and activist activity can provide some insights to investors, it is important to look into Blue Harbour Group’s recent increase in its stake in Allscripts Healthcare Solutions Inc (NASDAQ:MDRX). Moreover, with insiders also being bullish on the company, the stock is definitely worth adding to the watchlist.

Disclosure: none