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Jerome Lande Appointed To Itron Inc. (ITRI)’s Board, While Pennant Capital Cuts Stake In Mattress Firm

In a separate 13D filing, Jerome J. Lande and Craig Rosenblum’s Coppersmith Capital Management disclosed that the fund has entered into an agreement with Itron Inc. (NASDAQ:ITRI), under which Jerome J. Lande has been appointed to the company’s Board, effective immediately, and Peter Mainz, a candidate identified by Coppersmith, has also been appointed to the Board, effective January 1, 2016. Let us remind you that Coppersmith Capital and Scopia Capital Management, founded by Matt Sirovich and Jeremy Mindich, teamed up back in September to launch their activist campaign on the technology and services company. The two hedge funds aggregately own a 3.78 million-share, or 9.9% stake, in Itron Inc. (NASDAQ:ITRI), while Coppersmith Capital holds 2.86 million shares of this stake. According to the aforementioned agreement, Itron also formed a Value Enhancement Committee that is intended to “review, study and develop potential initiatives (including transactions) designed to create durable, sustainable long-term shareholder value”. Meanwhile, the shares of Itron are down by almost 17% in 2015, although they have advanced by more than 21% since the beginning of September.

It appears that the smart money sentiment towards Itron did not change significantly during the September quarter, as the number of hedge funds with positions in the company remained unchanged quarter-over-quarter at 16. Even so, the overall value of those positions grew to $200.41 million from $92.86 million during the three-month period. Ian Simm’s Impax Asset Management holds 1.22 million shares of Itron Inc. (NASDAQ:ITRI) as of the end of the third quarter.

Jerome Lande And Craig Rosenblum
Jerome Lande And Craig Rosenblum
Coppersmith Capital

As stated in a Schedule 13G filing, Alan Fournier’s Pennant Capital Management currently owns 2.72 million shares of Mattress Firm Holding Corp (NASDAQ:MFRM), accounting for 7.7% of the company’s outstanding common stock. This compares with the 2.84 million-share position revealed in Pennant’s latest 13F filing. The company that engages in the retail sale of mattresses and bedding-related products has seen its shares decline by 18% so far this year. The stock is currently trading at a rather expensive trailing price-to-earnings ratio of 29.15, which is above the average of 22.73 for the companies included in the S&P 500. Nevertheless, the company’s forward P/E ratio of 16.07, which compares far more favorably with the ratio of 17.35 for the S&P 500, points to more upside in the future (given that analyst earnings estimates are accurate). Mattress Firm Holding Corp (NASDAQ:MFRM) reported net sales of $1.92 billion for the thirty-nine weeks that ended November 3, which were up by 59.2% year-over-year. Its same-store sales grew by 2.8% year-over-year. At the end of November, Mattress Firm announced that it agreed to acquire the equity interests in HMK Mattress Holdings LLC, which serves as the holding company of the second-largest specialty mattress retailer, Sleepy’s. Mattress Firm, which is the largest specialty mattress retailer in the U.S, agreed to pay $780 million for the interests.

The number of hedge funds with stakes in Mattress Firm climbed to 13 from ten during the third quarter, though the value of their stakes shrank to $367.79 million from $583.02 million quarter-over-quarter. These smart money investors had accumulated 25.00% of the company’s shares by the end of September. Sharlyn C. Heslam’s Stockbridge Partners upped its position in Mattress Firm Holding Corp (NASDAQ:MFRM) by 10% during the July-to-September period, to 2.58 million shares.

Alan Fournier
Alan Fournier
Pennant Capital Management

Disclosure: None

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