Sandell Asset Management, led by Tom Sandell, recently filed its latest 13F with the U.S. Securities and Exchange Commission. Founded in 1998, Sandell specializes in international, event-driven, multi-strategy investing, having a strong focus on equity special situations and credit opportunities. The value of the fund’s public equity portfolio totaled $1.02 billion as of March 31. During the quarter, the investor acquired stakes in over ten companies, while it sold out of positions in 12. In this article we’ll take a look at the top three small-cap picks of Sandell, including Bob Evans Farms Inc (NASDAQ:BOBE), La Quinta Holdings Inc (NYSE:LQ), and JDS Uniphase Corp (NASDAQ:JDSU).
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First, we will discuss Bob Evans Farms Inc (NASDAQ:BOBE), in which Sandell increased his position by 17% to 1.63 million shares during the first quarter, the stake being valued at $75.60 million. Bob Evans Farms Inc (NASDAQ:BOBE) is a restaurant and food products company with a market cap of $1.07 billion. At the end of April, Bob Evans Farms Inc (NASDAQ:BOBE) announced that it plans to close 20 restaurants over the next 12 months. This action is likely to improve the company’s annual operating income by about $2.5 to $3.0 million. For the first quarter of 2015, Bob Evans Farms Inc (NASDAQ:BOBE) posted net income of $5.9 million, or $0.25 per share, versus $6.2 million, or $0.24 per share, in the same period last year. The company’s stock declined by more than 12% year-to-date. Sandell added Bob Evans Farms Inc (NASDAQ:BOBE) to its equity portfolio during the second quarter of 2013 and pushed the company to pursue a sale or spin-off of its BEF Foods business segment, but this proposal was later rejected by the company’s board of directors. Other large investors of the company include Rob Citrone’s Discovery Capital Management and Chuck Royce’s Royce & Associates.
Next up is La Quinta Holdings Inc (NYSE:LQ), a $3.20-billion market cap operator and franchisor of select-service hotels, primarily serving the midscale and upper-midscale segments under the La Quinta brand. La Quinta Holdings Inc (NYSE:LQ) is a new position initiated by Sandell during the first quarter, with ownership of 1.34 million shares, valued at $31.72 million. The company reported strong financial results for the first quarter of 2015, posting net income of $6.14 million for the quarter, compared to a net loss of $7.34 million in the same quarter last year. The company’s stock performance has been very impressive as well, moving up by 32.14% during the past year. Ken Griffin’s Citadel Investment Group was bullish on La Quinta Holdings Inc (NYSE:LQ) during the first quarter, boosting its stake in the company by over 60% to 5.48 million shares.
Lastly is JDS Uniphase Corp (NASDAQ:JDSU), in which Sandell upped his stake by 24% to 2.40 million shares during the quarter and lifting the value of the stake to $31.53 million. JDS Uniphase is engaged in providing network and service enablement solutions and optical products, and has a market cap of $3.03 billion. The company booked a net loss of $13.2 million, or $0.06 per share, for its fiscal third quarter ended March 28, versus a net loss of $1.5 million, or $0.01 per share a year ago. In other company news, M Luke Scrivanich, senior vice president and general manager of optical security and performance products (OSP) at JDS Uniphase Corp (NASDAQ:JDSU), recently unloaded a total of 624 shares of the company in two transactions. Following the sale, Scrivanich owns 8,938 shares of the company. JDS Uniphase Corp (NASDAQ:JDSU)’s stock has dropped by 6.81% year-to-date. Among the largest investors of the company is Clint Carlson’s Carlson Capital, which held 5.39 million shares of the company at the end of March.
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