Buffett Buys More Shares of This Energy Company, Carlson Reaches Agreement With Vitamin Shoppe Inc. (VSI), Plus Two Other Moves

As stated in a freshly-amended 13D filing, Clint D. Carlson’s Carlson Capital L.P. currently owns 2.27 million shares of Vitamin Shoppe Inc. (NYSE:VSI), which account for 7.79% of the company’s outstanding common stock. This compares with the 1.95 million-share position disclosed through the fund’s 13F filing for the third quarter. The 13D filing also discloses that Vitamin Shoppe and Carlson Capital entered into an agreement under which the company is set to add two new independent directors to its Board of Directors (currently comprised of ten members) over the next 60-to-90 days. The multi-channel specialty retailer and manufacturer of nutritional products will propose one candidate, while Clint Carlson’s investment firm will propose the second one. Moreover, the company’s Board size will decrease back to ten members immediately following the 2016 Annual Meeting of Shareholders.

A contract manufacturer of vitamins, minerals, herbs, specialty supplements, sports nutrition and other health and wellness products, Vitamin Shoppe might have a great future lined up, considering the changing consumer attitudes and preferences towards functional foods and natural health products. U.S consumer spending, which has been improving as a result of the tightening labor market, has a material impact on Vitamin Shoppe Inc. (NYSE:VSI)’s financial performance. The company posted net sales of $973.06 million for the nine months that ended September 26, up from $922.96 million reported for the same period of the prior year. Vitamin Shoppe’s gross margins as a percent of net sales reached 33.7% for the first nine months of 2015, up from 33.6% reported a year earlier. Considering that the stock is down by 22% over the past year, trades at an attractive forward price-to-earnings ratio of 13.32 (the forward P/E for the S&P 500 totals 15.75), and has an additional catalyst in the form of shareholder activism, the company might represent an attractive investment opportunity at the moment. Ken Griffin’s Citadel Advisors LLC trimmed its position in Vitamin Shoppe Inc. (NYSE:VSI) during the third quarter to 1.25 million shares.

Clint Carlson
Clint Carlson
Carlson Capital