According to a recent filing with the Securities and Exchange Commission Alexander Roeper‘s Atlantic Investment Management has trimmed its stake in WESCO International, Inc. (NYSE:WCC) to around 2.13 million shares, representing 4.9% of the outstanding stock, from 2.22 million shares held earlier.
Founded in 1988 Atlantic Investment Management currently has about $2.3 billion regulatory assets under its management, while the value of its equity portfolio stood at $1.33 billion, according to the last 13F filing. Atlantic’s investment strategy involves acquiring large stakes in mid-cap companies, often more than 7% of the outstanding shares, based on their fundamental value.
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So far this year WESCO International, Inc. (NYSE:WCC)’s stock has fallen by more than 22%. In comparison the Industrial Distribution industry has fallen by about 4.5%. In its financial results for the second quarter, WESCO International, Inc. (NYSE:WCC) missed both the top and bottom line estimates. While revenue of $1.92 billion were $50 million lower than expectations, the EPS of $1.0 came in $0.16 lower than the expected mark. The factors weighing heavily on the company’s performance in the second quarter included weakness in the industrial market, foreign exchange headwinds and slow seasonal start in the non-residential construction markets. The company expects these challenges to continue in the second half of the year, and has thus lowered its financial outlook for the year.
In order to cope with this environment WESCO International, Inc. (NYSE:WCC) laid off some 300 employees during the April – June quarter and also consolidated or closed six branches. More cost cutting measures along the same lines are expected to be introduced during the rest of the year. It is expected that these initiatives combined with the discretionary spending controls will add $0.40 to the fiscal year’s EPS, which is $0.10 more than previous expectations.
The decline in WESCO International, Inc. (NYSE:WCC)’s industrial performance was led by oil and gas, metals and mining, and OEM customers. Geographically speaking U.S. sales slid by 4%, while revenues from Canada declined by 12%. The company’s performance in the utility sector, however, was impressive. Sales grew by 6% during the quarter, marking the seventeenth consecutive growth quarter.
Professional money managers have a mixed outlook towards the company. Among the funds that we track, a total of 20 had an aggregate investment of $468.79 million at the end of March, a decrease from 25 firms with $369.87 million at the end of the previous quarter. The increase in the invested amount came despite an almost 8.3% slide in WESCO International, Inc. (NYSE:WCC)’s stock price during the first quarter. The two largest stockholders among the above mentioned funds are Blue Mountain Capital, which is led by Andrew Feldstein and Stephen Siderow and Joel Greenblatt‘s Gotham Asset Management. Their respective holdings amounted to 35.81 million shares valued at $88.53 million and about 1.10 million shares valued at $76.54 million.
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