In this article, we discuss long-term returns of Keith Meister’s 5 activist targets. If you want to see more stocks in this selection, check out Long-Term Returns of Keith Meister’s Activist Targets.
5. CenturyLink
Long Term Returns: 17.08%
S&P 500 Returns: 10.68%
Activist Investment: 2017
CenturyLink delivers telecommunications solutions in the areas of internet, voice, video, and cloud services. Meister revealed a 5% stake in the company in 2017 and reiterated that the stock was undervalued by at least 40%.
The investment came at a time when the company was in the process of merging with Level 3 Communications. The merger was expected to turn the company from a struggling business onto a thriving one with plenty of dividend coverage. Meister pushed Jeff Storey to be the CEO of the combined companies to help oversee the integration, given his solid track record at Level 3.
In 2020, CenturyLink rebranded to Lumen Technologies, Inc. (NYSE:LUMN) and announced a new strategy focused on enterprise customers and computing. Meister praised the rebranding reiterating that the company would benefit from Storey’s expertise. By 2020 the value of Meister shares in the company was down by about 30%.
4. Energen Corporation (NYSE:EGN)
Long Term Returns: 140%
S&P 500 Returns: 13.46%
Activist Investment: 2018
Energen Corporation (NYSE:EGN) was an oil-focused exploration and production company within the Permian basin of West Texas. Activist hedge fund manager Meister bought stakes in the company in 2017 and started a proxy battle to unlock shareholder value. He pushed for board and management changes and a review of the overall business.
In 2018, Meister would reunite with Carl Icahn by selling him 2 million shares with an option to buy more. The two would join forces in the push to sell the company in a bid to unlock value or buy it altogether.
In April, when Diamondback tabled a $9.2 billion bid to acquire Energen Corporation (NYSE:EGN), Meister and Icahn did not oppose it as they had been pushing for a sale to address the company’s weak results. The deal valued the company at $65 a share. By the time the deal was closed in November, Meister had sold some of its holdings for about $85 a share, translating to a 40% plus gain on the investment.
3. ForeScout Technologies, Inc. (NASDAQ:FSCT)
Long Term Returns: 31.77%
S&P 500 Returns: 30.68%
Activist Investment: 2019
ForeScout Technologies, Inc. (NASDAQ:FSCT) is a cyber-security company that provides network visibility and access control solutions. Its solutions allow customers to see what devices are connected to the network and enforce various security policies. Meister declared a 14.5% stake in the company in October 2019 and reiterated plans to push for changes to unlock shareholder value.
Meister reiterated that the company was highly undervalued and had significant growth potential; therefore intended to discuss board and management changes among other strategic initiatives such as sales to maximize shareholder value.
In May 2020, ForeScout Technologies, Inc. (NASDAQ:FSCT) agreed to be acquired by Advent International for $1.9 billion or $33 per share. Advent terminated the deal citing material adverse changes in ForeScout Business. Nevertheless, the two would reach an agreement in July, resulting in Advent acquiring the company for $1.6 billion or $29 a share. At the time of the sale, Corvex Capital’s holdings in the company were down by about 17%.
2. Anaplan, Inc. (NYSE:PLAN)
Long Term Returns: -2.56%
S&P 500 Returns: 2.27%
Activist Investment: 2022
Anaplan, Inc. (NYSE:PLAN) is a company that delivers a purpose-built platform for connecting people’s data and plans to deliver a unified real-time cloud-based environment to optimize decision-making. Meister started pursuing the company in December 2021 and bought stakes in March 2022.
With Sachem and JS Capital Management, Corvex Capital believed Anaplan, Inc. (NYSE:PLAN)’s stock was highly undervalued. The three firms owned 9% of the company’s outstanding shares and started conveying opinions about the company’s business. They also got the right to appoint some people to the board.
Barely a month after investing, Anaplan, Inc. (NYSE:PLAN) would be the subject of a $10.7 billion acquisition bid by private equity giant Thomas Bravo. Following the purchase, Corvex racked up a 34% return on its investment.
1. MDU Resources Group, Inc. (NYSE:MDU)
Long Term Returns: 0.9%
S&P 500 Returns: 7.15%
Activist Investment: 2022
MDU Resources Group, Inc. (NYSE:MDU) is a company that engages in regulated energy delivery and construction material and services in the United States. The company has five segments that it operates in: Electric, Natural Gas Distribution, Pipeline, Construction Materials and Contracting, and Construction Services.
Meister took a 5% stake in MDU Resources Group, Inc. (NYSE:MDU) in August 2022 while reiterating that the stock was highly undervalued. With the investment, he discussed strategic options, including changes to the board and management and other measures that can help improve the company’s valuation.
The activist investor is believed to be behind the announcement that the company will separate its material unit Knife River Corporation into a separate public company. Corvex has already termed the plan a positive first step even as it engages in other plans to enhance the company’s earnings potential. Since Meister initiated a position in the company, MDU Resources Group, Inc. (NYSE:MDU) has been down by about 29%.
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