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Builders FirstSource (BLDR): Stadium Capital Hits the Jackpot, Monster Returns for 2015 in Progress

Alexander Medina Seaver’s Stadium Capital Management hasmade a move to cash in on its top pick Builders FirstSource, Inc. (NASDAQ:BLDR) following the explosive growth of the stock after its $1.63 billion acquisition of privately-held ProBuild, an industry leader in the building materials industry. Seaver sold just over 2.55 million shares between April 13 and April 15, at an average price of about $12.62 per share according to a Form 4 filing with the SEC, bringing his total share ownership down to just over 9.60 million shares, a 9.8% stake in the company.

Alexander Seaver Stadium Capital

Shares of Builders FirstSource, Inc. (NASDAQ:BLDR) nearly doubled from $6.90 to $13.59 over the next two trading sessions following its April 13 acquisition, which prompted Seaver to cash in on some of his sizable stake in the company. Builders FirstSource, Inc. (NASDAQ:BLDR) was already his largest position even before the huge spike in value, with his most recent 13F filing reporting ownership of 12.40 million shares valued at $85.16 million, with his equity portfolio having 21.35% exposure to the stock. Builders FirstSource shares were down 2.9% during the first quarter.

The huge April growth sets Seaver up for a massive Q2, which will elude other investors in our database as far as this particular stock goes, as few had noteworthy positions. Dov Gertzulin’s DG Capital Management, a fund recently added to our database, owned just under 619,000 shares which gave it 2.66% exposure to the stock, the next highest after Seaver.

Let’s briefly run through the Q1 returns of Seaver’s other top picks now, beginning with Insperity Inc (NYSE:NSP), with whom Seaver has had an uncharacteristically rocky relationship. While being an activist investor, Seaver has rarely had to resort with airing grievances publicly, doing so only three times according to the fund’s Dominic Demarco. One of those times involved Insperity Inc (NYSE:NSP), with Stadium Capital sending a letter to the company’s shareholders last year outlining the inefficiencies and poor performance of the company, and pushing for multiple changes.

More recently, another activist, Jeffrey Smith of Starboard Value has entered the fray, taking a position in Insperity Inc (NYSE:NSP) during the fourth quarter and suggesting a host of changes that could positive affect the company’s bottom line. It also urged the company to consider selling itself. Shares of Insperity gained a boost after Smith’s activist position was revealed in January and ended up having a huge first quarter, rising by over 54%. Stadium’s 2.43 million share position was valued at $82.33 million and represented 20.64% of its equity portfolio at the end of 2014. The weighted average returns of Seaver’s top two picks, which accounted for 42% of his equity portfolio, are a stunning 72% year-to-date, setting him up for a monster 2015.

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