William C. Martin’s Raging Capital Management sold out its entire stake in 1-800-Flowers.Com Inc (NASDAQ:FLWS) at the end of February. As revealed by the 13G Form filed with the U.S. Securities and Exchange Commissio, the investment firm no longer beneficially owns the 2.94 million shares of the company held previously. On the other hand, last quarter, Raging Capital had initiated several new positions, acquiring 3.56 million shares of ORBCOMM Inc (NASDAQ:ORBC) and 449,000 shares of Williams Companies Inc (NYSE:WMB). Its largest new holding at the end of the fourth quarter however, was in A.M. Castle & Co (NYSE:CAS), which we covered in a previous article.
Raging Capital Management (stock picks, investor letters) is a long/short equity hedge fund that was launched in 2006 by William C. Martin and is currently headquartered in Princeton, New Jersey. Mr. Martin is not only engaged in Raging Capital, but is also the co-founder of several financial information companies, including Ragingbull.com. The fund’s current Chief Investment Officer and Chairman founded the financial website in 1997, at only 19 years old. Furthermore, Raging Capital Management delivered annual returns of 25% in 2014. As revealed by the investment firm’s Q4 investor letter, its Series A Master Fund returned 2.8% during the past quarter, while Series B Master Fund delivered returns of 3.4%. As of the fourth quarter, the hedge fund boasted an equity portfolio valued $952.88 million, up from $893.78 million reported during the previous period.
During the last quarter Raging Capital cut its exposure to 1-800-Flowers.Com Inc (NASDAQ:FLWS) by 33% and at the end of January, the fund trimmed its position by an additional 88,300 shares. The hedge fund initiated a stake in the company during the fourth quarter of 2013, with the purchase of 765,300 Class A Common Shares, and began increasing its stake consistently until the second quarter of 2014. The investment paid off well for Raging Capital, as the stock gained 52.6% in 2014. Hence, it seems the investment firm chose a great time to cash in on profits. Prior to the sale of its entire holding, Raging Capital was the company’s largest shareholder among institutional investors.
Although Raging Capital has sold off one of its top picks from the fourth quarter, the firm still has several new positions it is hoping to profit from such as ORBCOMM Inc (NASDAQ:ORBC). According to its latest 13F filing, the hedge fund initiated a new position in the company that contains 3.56 million shares and was valued at around $23.3 million. Although the stock’s share price has been experiencing a downward trend, losing 28.8% over the past 52 weeks, there are several reasons explaining the fund’s bullish stance.
Over the past five years, ORBCOMM Inc (NASDAQ:ORBC) has achieved sales growth of 22.10%, while EPS growth for the same period reached 26.90%. Furthermore, considering the stock’s price of $5.60 per share, it is trading at a discount relative to the average target price of $9.80 set by analysts. In addition, the company also has several major hedge funds as its shareholders. John W. Rogers’ Ariel Investments for example holds a stake of 6.51 million shares in the company, which were valued at $42.58 million as of the end of the fourth quarter. Like Raging Capital, Chuck Royce’s Royce & Associates also initiated a stake in the company last quarter with the purchase of 2.75 million shares.
Williams Companies Inc (NYSE:WMB) was another one of Raging Capital’s top new picks at the end of 2014, with a holding of 449,000 shares, valued at around $20.18 million. Williams Companies is a popular among institutional investors. In fact, it has landed on our list of five companies with high dividend yields that hedge funds are crazy about, with 77 investors from our database holding a total of $6.50 billion worth of stock. In addition to offering shareholders an annual dividend yield of 4.86%, Williams Companies Inc (NYSE:WMB) gained around 13.5% over the past 52 weeks. The company’s largest shareholder among institutional investors is Keith Meister’s Corvex Capital, which disclosed a stake of 41.68 million shares last quarter, valued at around $1.87 billion.
Disclosure: none.
