Five Stocks that Helped Starboard Value’s Equity Portfolio Return 6.5% in Q1

Starboard initiated a stake in Macy’s, Inc. (NYSE:M) during the second quarter of 2015 and increased it by 12% and 2% during the third and fourth quarters respectively. After having added the company to Starboard’s equity portfolio, Mr. Smith spoke at the Delivering Alpha conference in July, where he explained why he thought Macy’s, Inc. (NYSE:M) was undervalued.  Though at that time he didn’t reveal a plan that can help the company to unlock shareholder value, he released a presentation earlier this year which showed how Macy’s, Inc. (NYSE:M) could boost its stock price to $70 by monetizing its real estate assets. Billionaire David Einhorn, whose fund, Greenlight Capital, initiated a stake in the company during the fourth quarter, also shares the same opinion. In a letter to his investors, Mr. Einhorn wrote, “it wouldn’t surprise us if a private equity firm teamed up with a REIT to buy the company and unlock the value privately.” Despite having appreciated by 26% during the first quarter, Macy’s stock is currently trading up by only 13% year-to-date due to the 10% decline it has seen since the beginning of April.

In secure logistics firm Brink’s Company (NYSE:BCO), Starboard initiated a stake during the first quarter of 2015 and more than doubled it during the second quarter. The firm launched an activist campaign against the company immediately after initiating its stake, publicly criticizing Brink’s Company (NYSE:BCO)  for its strategy and financial performance. At the end of 2015, the fund had a 12.4% stake in the company through 4.57 million shares that it owned directly and another 1.45 million shares that it beneficially owned as part of a cash-settled total return swap agreement with Société Générale. At the beginning of this year, Brink’s Company (NYSE:BCO) reached an agreement with Starboard Value LP, under the terms of which, the company added three new directors to its Board and announced that its Chairman and CEO, Thomas Schievelbein, would step down. Though shares of Brink’s Company failed to take off initially after this agreement was reached, they ended the first quarter up by 16.8%. The company currently pays a quarterly dividend of $0.10, which translates into an annual dividend yield of 1.10%.