Glenn J. Krevlin’s Glenhill Advisors has disclosed a large new position in Pier 1 Imports Inc (NYSE:PIR), the Fort Worth, Texas-based importer of furniture and home décor products. The new position, which is passive by nature, amasses 4.64 million shares, which account for 5.2% of the company’s common shares.
The date of event which required the filing of the 13G was March 10, one month after Pier 1 Imports Inc (NYSE:PIR) was forced to lower its earnings guidance for Fiscal 2015. On February 10, Pier 1 announced expected earnings per diluted share between $0.80 and $0.83 for FY 2015, which was down from its previous guidance of $0.95 to $1.05. The updated guidance battered the company’s shares on February 11, as they tumbled by more than 24% to $12.84.
While it’s not known exactly when the shares have been purchased, it would not be surprising if Glenhill took advantage of that big dip to acquire its new position. Shares have rebounded more than 10% since then, though Pier 1 Imports Inc (NYSE:PIR) hasn’t completely managed to avoid controversy since; it was announced in late February that the company was under investigation by The Shareholders Foundation for possible securities violations related to the revised guidance and subsequent plunge of shares. The investigation seeks to uncover whether Pier 1 purposefully misled investors concerning its operations and future prospects.
Let’s move on to three of Glenhill Advisor’s other top new positions disclosed in its latest 13F filing. First among them is Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), in which Glenhill opened a position comprised of 3.03 million shares, valued at $38.71 million. Shares of the healthcare solutions provider were also highly sought after by its largest shareholder among the funds we track, Clifton S. Robbins’ Blue Harbour Group. The fund increased its activist stake in Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) to 12.64 million shares early in the fourth quarter, and further increased that to 14.42 million shares by the end of the year.
However, another of Allscripts Healthcare Solutions Inc (NASDAQ:MDRX)’s former largest shareholders, Healthcor Management LP, completely closed its position during the last quarter, selling off its entire stake of 7.21 million shares. It had begun that process at the end of the third quarter, having sold 2.79 million of its previously owned 10.0 million shares. Healthcor Management had a contentious history with Allscripts that dated back to 2012 when they criticized the termination of former Chairman Phil Pead, and demanded that CEO Greg Tullman step down. Tullman resigned later that year.
The second most valuable new position in Glenhill’s portfolio during the fourth quarter was a 1.86 million share stake in Dominion Diamond Corp (USA) (NYSE:HWD) (formerly Harry Winston Diamond Corp.) valued at $33.47 million. The Canadian diamond mining company owns an 80% stake in the Ekati Diamond Mine and a 40% stake in the Diavik Diamond Mine, both of which are located in Canada’s Northwest Territories. The two mines produced an estimated seven million carats in 2014, with each of them ranking among the top 20 diamond mines in the world in terms of production. Futhermore, Dominion Diamond Corp (USA) (NYSE:HWD) has plans to expand the Ekati mine in the summer of 2016 with a new pit that will extend its operations by another ten years. That pit will open in 2019 just as the reserves at the mine’s current operation are expected to run dry.
Dominion Diamond Corp (USA) (NYSE:HWD) changed its name after the sale of its Harry Winston luxury retail division to The Swatch Group in 2013 for $750 million, plus the assumption of up to $250 million in pro forma net debt. Blue Harbour Group was also the largest shareholder of this company among the funds we track, owning 3.33 million shares at the end of 2014. The stock had a very strong fourth quarter, during which it gained nearly 26%.
Lastly, Glenhill has opened a new position in Belmond Ltd (NYSE:BEL), previously known as Orient Express Hotels (formerly traded under the ticker symbol OEH). The new stake contains 1.37 million share was valued at $16.92 million at the end of 2014 and became the second largest position in the company among funds we track, with Royce & Associates’ 1.90 million share holding leading the way.
Belmond, which changed its name to align with its luxury brand, operates 45 different hotels and travel adventures for clients, which includes safaris, river cruises, and luxury tourist trains. With the travel sector expected to improve in 2015 and throughout the next decade, it looks like a good time to enter a stock that has been stagnant since the financial crisis of 2008. A 2014 study conducted by Oxford Economics predicted 5.4% growth per annum over the next decade for the industry, driven by a huge increase in Chinese tourists.
Disclosure: None
