Gates Capital Management Increases Exposure to Richardson Electronics, Ltd. (RELL)

Gates Capital Management, a fund managed by Jeffrey Gates, has disclosed, in a newly amended filing with the Securities and Exchange Commission, incresing its position in Richardson Electronics, Ltd. (NASDAQ:RELL). The fund currently holds around 2.7 million shares of the company, versus some 2.6 million held at the end of September, as disclosed in the latest 13F. The holding amasses 22.73% of the company’s common stock. The stake is activist by nature and has a value of over $30.2 million, at the current stock price of Richardson Electronics.

Richardson Electronics, Ltd. (NASDAQ:RELL)’s stock edged up by around 1% since the beginning of the year. For the first quarter of its fiscal 2014, ended August 31, the company posted an annual 3.9% decline in net sales, which totaled $34.3 million. The gross margin remained almost flat over the year at 29.8%. The company posted a net income of $2.0 million, which represent $0.14 per share, which represents a boost from $0.6 million, or $0.04 per share in the same period of last year.

Earlier in September, Gates reported upping its position in Richardson Electronics, Ltd. (NASDAQ:RELL) to close to 2.6 million shares, from 2.5 million held earlier. At the same time, the fund changed the nature of the stake to activist. In addition to Gates, Rgm Capital, managed by Robert G. Moses disclosed holding a $13.4 million stake in the company, which amasses 1.2 million shares. Chuck Royce’s Royce & Associates also reported holding some 916,400 shares of Richardson Electronics, Ltd. (NASDAQ:RELL), worth $10.4 million.

A couple of days ago, Gates disclosed, in another filing, increasing its position in Darling International Inc. (NYSE:DAR) to 6.0 million shares, from 4.9 million. Currently the fund holds 5.1% of the company’s common stock. Earlier, Gates almost doubled its position in Headwaters Inc (NYSE:HW) to 7.37 million shares, equal to 10.1% of the company’s common stock.

Disclosure: none

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