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ePlus Inc. (PLUS), Sears Holdings Corp (SHLD), Resonant Inc (RESN): 3 Investors Report Their Latest Moves

As three new filings with the Securities and Exchange Commission showed, Hovde Capital, Fairholme Capital Management, and Park Capital have recently disclosed their latest moves involving some stakes from their equity portfolios. Eric D. Hovde‘s Hovde Capital lowered its stake in ePlus Inc. (NASDAQ:PLUSto 286,488 shares, from 323,200 shares held previously. Bruce Berkowitz‘s (pictured) Fairholme Capital Management reduced its position in Sears Holdings Corp (NASDAQ:SHLD) to 26.37 million shares from 26.55 million shares. And Michael Fox’s Park City Capital disclosed a new stake in Resonant Inc (NASDAQ:RESN) that contains 300,000 shares.

FAIRHOLME (FAIRX) Bruce Berkowitz

Let’s discuss each move in more detail. Eric D. Hovde’s activist position in ePlus Inc. (NASDAQ:PLUS) amasses 3.88% of the company’s outstanding common stock. The fund has been holding shares of the company since the end of 2010, initially disclosing ownership of 894,000 shares. The fund has been amending its activist position that once contained around 1.30 million shares in August 2010. Since then, the stock of ePlus surged by over 360%. ePlus Inc. (NASDAQ:PLUS) is a small cap IT company that provides products and services aimed towards optimization of IT infrastructure and supply chain processes. In the last several quarters, ePlus Inc. (NASDAQ:PLUS) has been reporting growth in both revenue and EBITDA, which amounted to $306 million and $31 million respectively.

Aside from Mr. Hovde, in the last round of 13F filings, several other investors reported holding shares of ePlus. Among funds that we track, Chuck Royce‘s Royce & Associates disclosed ownership of 545,900 shares, down by 13% on the quarter. John H Lewis’ Osmium Partners also cut its stake by 12% on the quarter to 171,900 shares.

Fairholme, following the decrease of its stake in Sears Holdings Corp (NASDAQ:SHLD), owns around 24.8% of the company’s common stock. Moreover, the investor changed the nature of its stake to activist from passive. In addition, the Fairholme Partnership, a private fund affiliated with Fairholme Capital Partners, has acquired a 6.25% participation in the $400 million short-term loan from Fairholme that Sears Holdings Corp announced in September. Sears has been struggling with significant financial issues as the company’s sales have been deteriorating. In its last financial report for the fourth quarter of 2014, the company posted adjusted net loss of $0.34 per share, a significant improvement from a net loss of $1.61 per share posted for the same period of the previous year. The earnings narrowed thanks to severe cost cuttings, but the revenue is still falling, mainly on the back of store closures and declined by 24% year-over-year in the fourth quarter to $8.10 billion.

However, in his last letter to shareholders, Sears Holdings Corp (NASDAQ:SHLD)’s CEO Edward Lampert seemed optimistic about the company’s prospects and said, among other things, that the company is going to focus on its profitability, rather than sales. Moreover, Mr. Lampert said that the company will form a Real Estate Investment Trust that will acquire some of Sears Holdings’ stores, resulting in proceeds worth around $2.0 billion.

In fact, the value of Sears Holdings Corp (NASDAQ:SHLD)’s real estate properties seems to be the glue that is holding investors’ capital. However, one of the largest shareholders of Sears is still the company’s CEO, Edward Lampert, who also managed ESL Investments fund. ESL held 26.44 million shares of the company at the end of 2014. Other funds, among those that we track, hold smaller positions, such as Debra Fine’s Fine Capital Partners, which owns 2.22 million shares, down by 29% over the quarter.

Sears Holdings Corp (NASDAQ:SHLD)

Resonant Inc (NASDAQ:RESN) is a $79.3 million development stage company that develops filter designs for radio frequency front-ends for the mobile device industry. Park City Capital owns a 4.35% activist stake, and aside from disclosing the position, the investor also published a letter sent to Chairman and CEO Terry Lingren. In the letter, Park City stated that they purchased the shares over the last couple of years because they consider the company undervalued and that this could quickly pick up if the company manages to generate revenues from several customers. The investor added that the filter market in which Resonant Inc (NASDAQ:RESN) operates is very large and other investors should realize the potential of the stock, which will move it higher in the next 6-18 months. In addition, Mr. Fox, the founder and CEO of Park City Capital, saluted Resonant Inc (NASDAQ:RESN)’s decision to execute a license business model and said that companies that adopted license strategies have performed very well. Overall, the investor considers that the company’s stock could reach $84.00 during the next 12 months, based on 8.0x 2017 estimated sales.

Disclosure: None