Five Companies to Benefit from Activist Starboard Value’s Involvement in 2017

In Rockwell Collins, Inc. (NYSE:COL), Starboard held 1.10 million shares worth $102.04 million heading into 2017. Back in November, Bloomberg reported, citing people familiar with the matter, that Starboard was trying to convince Rockwell Collins to review the previously-proposed deal to buy B/E Aerospace Inc (NASDAQ:BEAV) and to consider other options, including a potential sale. However, earlier this month, Rockwell Collins, Inc. (NYSE:COL) and B/E Aerospace announced that they would hold special meetings of stockholders on March 9, where the deal valued at $6.4 billion will be discussed. Investors seem to be excited about Rockwell Collins, Inc. (NYSE:COL)’s prospects, as the number of investors from our database with stakes in the company jumped to 38 from 15 during the fourth quarter.

Cognizant Technology Solutions Corp (NASDAQ:CTSH) was also included in Starboard’s equity portfolio last quarter, with the fund having reported ownership of around 1.48 million shares worth $82.64 million in its latest 13F filing. Starboard’s move into the stock coincided with the involvement of another activist, Paul Singer’s Elliott Management, which sent a letter to the company at the end of November. Elliott said that the company is undervalued and suggested a number of measures to enhance shareholder value, include buybacks and acquisitions. The investor considers that the implementation of its Value-Enhancement Plan could result in Cognizant Technology Solutions Corp (NASDAQ:CTSH)’s stock reaching $80-$90 per share by the end of 2017. A total of 55 funds tracked by us held $1.96 billion worth of Cognizant Technology Solutions Corp (NASDAQ:CTSH)’s stock at the end of 2016, up from 47 funds with stakes worth $1.36 billion a quarter earlier.

Last but not least, Tribune Media Co (NYSE:TRCO) was Starboard’s 13th largest position at the end of 2016, as the fund initiated a $70.04 million position that contained 2.0 million shares. However, in February, Starboard filed a 13D with the Securities and Exchange Commission, in which it disclosed ownership of 5.79 million shares, which includes 1.66 million shares underlying forward purchase contracts and which represents 6.6% of the company’s outstanding stock. The move made Starboard one of Tribune Media Co (NYSE:TRCO)’s largest shareholders and was made at a time when the company was about to enter into a management transition phase, as its CEO Peter Liguori will resign in March, with the replacement not being named. Earlier today, Reuters reported that Tribune Media was approached by Sinclair Broadcast Group Inc (NASDAQ:SBGI) about a potential merger, according to people familiar with the matter. There were 24 investors in our database that held over 36% of Tribune Media Co (NYSE:TRCO)’s outstanding stock heading into 2017.

Disclosure: none