Richard McGuire’s Marcato Trims Exposure to Top Picks; Buys Signet Jewelers, CSC

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Marcato Capital Management is a San Francisco-based hedge fund sponsor that Richard McGuire founded in 2010, after leaving Bill Ackman‘s Pershing Square. The firm last disclosed an equity portfolio worth more than $1.23 billion as of June 30. Following a number of moves, which included three new positions and two stakes closed during the second quarter, Marcato’s holdings were focused on consumer discretionary companies, which amassed 48% of the portfolio’s total value and financial stocks, which represented 34% of the equity portfolio at the end of June. In this article, let’s take a closer look into the fund’s most notable moves during the second quarter.

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#5. Computer Sciences Corporation (NYSE:CSC)

– Number of Shares Held By Marcato Capital (as of June 30): 1.34 million

–Value of Marcato Capital’s Holdings (as of June 30): $66.8 million

Let’s start with Computer Sciences Corporation (NYSE:CSC), in which Marcato initiated a new stake during the second quarter of the year, becoming one of the 31 funds in our database long the stock. Also bullish on the IT firm was Ken Griffin’s Citadel Advisors, which bought more than 2.03 million shares between April and June, inclusive, taking its holdings to 2.05 million shares. Shares of Computer Sciences Corporation (NYSE:CSC) have gained more than 43% year-to-date, although most of the rise happened over May. In fact, since the beginning of the third quarter, shares have lost 3.5%. Earlier this month, the company reported first quarter EPS of $0.53 on revenue of $1.93 billion, beating the Street’s consensus estimates by $0.08 and $20 million, respectively.

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#4. Signet Jewelers Ltd. (NYSE:SIG)

– Number of Shares Held By Marcato Capital (as of June 30): 1.36 million

–Value of Marcato Capital’s Holdings (as of June 30): $112.3 million

An even larger new position was in Signet Jewelers Ltd. (NYSE:SIG). During the second quarter, McGuire’s fund purchased 1.36 million shares of the company, becoming the second largest shareholder in our database, only trailing Thomas Steyer’s Farallon Capital, which held 2.81 million shares, following a 48% increase in its exposure. Signet Jewelers Ltd. (NYSE:SIG) has had a tough year, having lost almost 35% of its value since January. However, most of the losses were realized over the first half of the year. Until last week, it looked like the stock was staging a rebound, but plummeted after the company reported its financial results, which included second-quarter EPS of $1.14 and revenue of $1.38 billion, lower than estimates by $0.31 and $60 million, correspondingly. In addition, the company’s management said same-store sales had tumbled by 2.3% over the quarter, and cut its full-year forecast, guiding for a same-store sales decline of 1% to 2.5%.

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