Ralph V. Whitworth’s Relational Investors Take 5.54% Activist Stake in $HAR

Ralph V. Whitworth’s Relational Investors announced on October 13th that the firm increased its activist position in Harman International Industries, Inc. (HAR) to 3.87 million shares, corresponding to a 5.54% stake.  This is a more than 60% expansion in Relational Investors’ HAR position. According to the 13D filing, Relational Investors have invested in HAR since November 2008. They believe HAR’s financial risk profile has been lowered and the company will seek to enhance its profitability in short term. Meanwhile, they believe the market has undervalued HAR’s largest operation by revenue due to a lack of disclosure related to its automotive backlog, which will be discussed in an investor event to be held on October 26th in Nashville, Tennessee. So Relational Investors intend to closely monitor the HAR’s progress by pursuing more shares. HAR is trading at $37.47 on October 14th, up by 9.63%.

Seventeen hedge funds had HAR in their portfolio in the second quarter, according to Insider Monkey’s hedge fund database. Ralph V. Whitworth’s Relational Investors increased their position by 13% and owned the most shares at that time. Chuck Royce’s Royce & Associates had about 600 thousand shares. Jim Simons’ Renaissance Technologies had 295 thousand shares, and Ken Griffin’s Citadel Investment Group had 20 thousand shares.

Relational Investors LLC is based in San Diego. The firm strives to create long-term growth by investing in publicly traded, underperforming and undervalued companies. The Firm seeks to “engage the management, board of directors, and shareholders of a portfolio company in a productive dialogue designed to build a consensus for positive change to improve shareholder value”, according to Relational Investors’ official website. The firm now has a portfolio value of more than $6 billion, with most of the capital invested in Services, Basic Materials, Financial, Technology, Industrial Goods, and Healthcare sector.

Harman International Industries, Inc. engages in manufacturing, developing, and selling audio products and electronic system in United States and some European countries. It operates Automotive segment, Consumer segment, and Harman Internationals Professional segment. The company was found in 1980 and is based in Stamford, Connecticut.