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Christopher Kiper’s Legion Partners Asset Management’s Return, AUM, and Holdings

The most valuable position the fund held at the end of 2018, was in American pizza restaurant franchise, Papa John’s Int’l, Inc. (NASDAQ:PZZA). The company was all over the news last year, when its, then current, CEO John Schnattr made racially sensitive remarks which lead him leaving the board. In spite of this scandal, which has made many investors to question their stakes in the company, Legion Partners actually thinks that Papa John’s still has real potential and that it should continue with its primary business. Year to date, Papa John’s stock gained 15.20%, and on March 14th it had a closing price of $46.23.  The company has a market cap of $1.47 billion, and it is trading at a price-to-earnings ratio of 5,217.83.

Legion Partners held 1.73 million shares of Papa John’s, which carried a value of $68.72 million, amassing for 21% of the fund’s equity portfolio. For the fourth quarter of 2018, the company disclosed total revenue of $373.98 million compared to $467.61 million in the same quarter one year earlier. It also reported a diluted loss per share of $0.44 and adjusted diluted EPS of $0.15 for Q4 2018, versus diluted EPS of $0.81 and adjusted diluted EPS of $0.54 in the corresponding period of 2017. Recently, this fourth biggest pizza delivery restaurant chain in the US declared a national partnership with DoorDash, one of the most successful on-demand food delivery companies. On March 8th, Citigroup lowered its price target to $55.00 from $64.00 with a ‘Buy’ rating on the stock, while somewhat earlier Stifel Nicolaus downgraded its rating to ‘Sell’ from ‘Hold’ and also lowered its price target to $35.00 from $38.00.

Legion Partners held the second biggest stake at the end of December 2018 in a Chesterfield-based consumer products company, Edgewell Personal Care Co (NYSE:EPC). The fund’s position in the company was worth $41.91 million, on the basis of 1.12 million shares outstanding, accounting for 12.81% of Legion Partners’ portfolio. Edgewell Personal Care has a market cap of $2.33 billion while trading at a price-to-earnings ratio of 24.24. For the full-year 2018, the company reported diluted EPS from continuing operations of $1.90 and adjusted EPS of $3.52, versus diluted EPS from continuing operations of $0.10 and adjusted EPS of $3.97 for the full-year 2017. It also disclosed adjusted net earnings of $192 million, compared to $228 million in 2017. At the beginning of March 2019, SunTrust Banks raised its price target on the stock to $45 with a ‘Hold’ rating. Edgewell Personal Care’s stock lost 12.43% over the last 12 months, having a closing price of $43.09 on March 14th.

The third biggest position in the fund’s portfolio was in Primo Water Corporation (NASDAQ:PRMW), a company that provides multi-gallon purified bottled water, water dispensers and self-service refill water across the U.S. and Canada. It runs its business in three sectors: Refill, Dispensers and Exchange. The $594.00 million market cap company’s stock lost 19.55% over the last six months, and on March 14th it reached a closing price of $15.26. At the beginning of March, Imperial Capital restated its ‘Outperform’ rating on the stock with a price target of $20, while B. Riley raised its price target to $21.00 from $19.00 with ‘Buy’ rating on it. Legion Partners’ position in the company at the end of the fourth quarter of 2018 counted 2.64 million shares, which carried a value of $37.02 million, accounting for 11.31% of its equity portfolio.

The only new stake Legion Partners initiated during the fourth quarter was in a company that provides a plethora of services and products to help customers gain healthy lifestyle habits, such as acquiring and holding ideal weight, exercising regularly and having a positive outlook on life, Weight Watchers International, Inc. (NASDAQ:WTW). The fund invested around $9.83 million in the company, by purchasing 255,000 shares outstanding. Over the past 12 months, Weight Watchers’ shares went down by 68.96%, having a closing price on March 14th of $20.09. Its market cap is of $1.35 billion, and the company is trading at a price-to-earnings ratio of 6.29. For the fourth quarter of 2018, Weight Watchers disclosed net revenue of $330.4 million and EPS of $0.63, versus net revenue of $312.5 million and EPS of $0.91 in the corresponding quarter of 2017. Around the beginning of March, Morgan Stanely set a price target of $21.00 on the stock with ‘Hold’ rating on it, while Sidoti lowered its price target on it to $47.00 from $99.00 with a ‘Buy’ rating.

Disclosure: None.

This article was originally published at Insider Monkey.

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