Ralph Whitworth‘s Relational Investors has disclosed reducing its stake in SPX Corporation (NYSE:SPW). As two new filings with the Securities and Exchange Commission have showed, Relational sold around 671,100 shares of the company in several transactions at an average price of $97.29 per unit. Following the deals, the fund owns around 5.59 million shares held indirectly through Limited Partnerships and managed accounts. The activist stake amasses 13.62% of SPX Corporation’s common stock.
Relational Investors has been struggling over the last past months because of Mr.Whitworth’s health issues. The manager of the fund has been absent from his duties and the fund has been cutting its holdings. Earlier in October, Relational announced that it plans to dissolve. However, as Reuters said last month, Relational plans to relaunch under a new management. We have previously reported that Relational reduced its exposure to Hologic, Inc. (NASDAQ:HOLX) to 13.61 million shares, after the sale of 3.83 million shares. The stock gained around 10% since the fund sold a part of its holding at the beginning of October. Moreover, in August, the fund sold around 1.40 million shares of Timken Co (NYSE:TKR), down to around 5.0 million shares, while the stock lost around 6% since then.
Relational has been holding shares of SPX Corporation (NYSE:SPW) since the first quarter of 2013, when it first initiated a stake with some 4.65 million shares of the company. The stock grew by around 20% since then. In the subsequent three quarters of 2013, Relational has been building up its stake, which grew to around 7.04 million shares at the end of 2013. At the beginning of January, the fund signed an agreement with SPX Corporation, following which, the investor appointed David Batchelder, co-founder and principal of Relational, to serve on the company’s board of directors. Soon after that, Relational started unloading shares of SPX Corporation (NYSE:SPW). In the middle of March, the investor sold around 371,200 shares and later the same month, it reported the sale of other 183,000 shares.
Meanwhile, the stock of SPX Corporation (NYSE:SPW) lost around 5% since the beginning of the year, despite the company reporting results in line with estimates. The decline came together with an overall fall in the diversified industrials industry, which overall lost around 3% year-to-date. Moreover, at the end of last week, SPX Corporation said that its board of directors has unanimously voted in favor of a tax-free spin-off of its Flow business into a separate public company.
Other investors own less significant positions in SPX Corporation (NYSE:SPW) in comparison to Relational, which commited around 10% of its equity portfolio to the investment. At the end of the second quarter, Joel Greenblatt’s Gotham Asset Management held 443,200 shares of the company, which represented less than 1% of the fund’s equity portfolio. Cliff Asness’ AQR Capital Management owned approximately 367,700 shares of the company at the end of June. Both AQR and Gotham raised their exposure to SPX Corp during the April-June period.
Relational Investors started selling shares the same day when SPX Corporation (NYSE:SPW) announced its spin-off plans, which sent the stock to highs of over $100 on the opening day, so, taking into account that in September 2013, Relational was buying shares at less than $74.00, the investor made some good returns. This is one of the reasons why following the activity of large investors is important, because it can provide some useful and profitable insights for those who might consider following their activity as an investment strategy.
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