Ascena Retail Group Inc (NASDAQ:ASNA), his third pick, also enjoyed a strong Q1, gaining 15.53%. Seaver had 18.77% exposure to the stock through a position of 5.96 million shares valued at $74.88 million. A specialty retailer of women’s fashion as well as clothing for tweens, Ascena Retail Group Inc (NASDAQ:ASNA) has rebounded in 2015 following a poor 2014 in which shares declined by over 40%. Future growth appears to be limited at present however, with the company’s revenue and earnings stagnant (and declining in the latter case). Regardless, two other funds anticipated a rebound for Ascena Retail Group Inc (NASDAQ:ASNA), opening large new positions in the fourth quarter; Steve Tannenbaum’s Greenwood Investments, and Cristopher Shackleton and Adam Gray’s similarly-named (to Stadium Capital) Coliseum Capital.
A position in Express, Inc. (NYSE:EXPR) was Stadium Capital’s fourth-largest, and it also had a strong quarter, gaining 12.53%. Stadium owned 2.53 million shares valued at $37.95 million at the end of 2014, the position having been increased by 45% during the fourth quarter. Another specialty clothing retailer, Express, Inc. (NYSE:EXPR) also dipped in 2014, by about 24%. Unlike Ascena, Express appears better positioned for growth under its new management, and is currently trading at lower P/E and P/S ratios. Clint Carlson’s Carlson Capital owns the largest stake out of the investors in our database, though it trimmed the position slightly during the fourth quarter, by 2%.
Lastly, Columbia Banking System Inc (NASDAQ:COLB) is another stock that Stadium enjoyed good returns with during the first quarter, in this case returns of 6.08%. Columbia Banking System Inc (NASDAQ:COLB) was one of Stadium’s two new positions in its latest 13F filing, and consisted of just under 958,000 shares valued at $26.45 million. The holding company for the Columbia State Bank and Bank of Astoria will release its latest earnings report on Wednesday. Interested investors will include billionaires Israel Englander and D.E Shaw, who have positions in Columbia Banking System Inc (NASDAQ:COLB).
Following activist funds like Stadium Capital is important because it is a very specific and focused strategy in which the investor doesn’t have to wait for catalysts to realize gains in the holding. A fund like Stadium can simply create its own catalysts by pushing for them through negotiations with the company’s management and directors. In recent years, the average returns of activists’ hedge funds have been much higher than the returns of an average hedge fund. Furthermore, we believe do-it-yourself investors have an advantage over activist hedge fund investors because they don’t have to pay 2% of their assets and 20% of their gains every year to compensate hedge fund managers. Soon, we’ll be releasing a new quarterly newsletter written by former activist hedge fund analyst Michael Bland that tracks 10 or so activist campaigns at any given time.
Disclosure: None
