Glenn W. Welling founded California based Engaged Capital in February 2012. The fund focuses on small and mid cap stocks that are undervalued and possess premium assets. It creates its portfolio employing fundamental analysis. Mr. Welling earned his Bachelors degree in Economics from The Wharton School of Business at the University of Pennsylvania. Mr. Welling has worked with financial services firms like Relational Investors, Credit Suisse and HOLT Value Associates L.P, among others.
In its latest 13F, Engaged Capital has disclosed its holdings as of the end of the fourth quarter of 2013. The total value of the fund’s equity portfolio is approximately $140.7 million.
First on the list is Volcano Corporation (NASDAQ:VOLC), a $1.2 billion market cap company, in which the fund owns 2.4 million shares, with a reported value of $51.8 million. The stock has a beta of -0.01. This week, the company released its guidance for the first quarter of 2014, with earnings per share in the range of $0.11 to $0.12 and revenues between $94 million and $95 million (versus consensus estimates of $99.5 million).
Next is AeroVironment, Inc (NASDAQ:AVAV). The fund reported holding approximately 580,800 shares, worth $16.9 million. The company operates in two segments, Unmanned Aircraft Systems (UAS) and Efficient Energy Systems (EES). It has a market cap of $709.4 million and is headquartered in California. Amy Minella’s Cardinal Capital also holds approximately 231,400 shares of the company, followed closely by Chuck Royce’s Royce & Associates, which owns 217,800 shares.
On the third spot is Rentech, Inc (NASDAQ:RTK), in which the fund disclosed a $14.9 million stake, or approximately 8.5 million shares. The provider of clean energy has a market cap of $462.4 million. Other stakeholders include Peter S. Park’s Park West Asset Management, which owns around 18.4 million shares, followed by Ariel Investments, led by John W. Rogers, which holds approximately 16.5 million shares.
Fourth on the list is the specialty retailer, Abercrombie & Fitch Co (NYSE:ANF), in which the fund holds 444,100 shares. The value of the current holding is equivalent to $14.6 million. Abercrombie & Fitch Co (NYSE:ANF) sports a P/E 23.7 and a beta of 1.49. It has a market cap of 3.0 billion. Susquehanna raised its target price on Abercrombie to $49.0 from $44.0 yesterday. However, Citigroup upholds its neutral rating on the stock, according to media reports issued recently.
Texas based Rovi Corporation (NASDAQ:ROVI) occupied the fifth largest position. Engaged Capital holds approximately 608,700 shares, which is equivalent to $11.2 million at the end of last year. Among the largest shareholders of Rovi Corporation (NASDAQ:ROVI) are Seth Klarman’s Baupost Group, which holds 2.2 million shares, followed closely by Orbis Investment Management, led by William B. Gray, which owns approximately 2.2 million shares.
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