4. Autodesk, Inc. (NASDAQ:ADSK) is the fourth-most attractive potential takeover target among hedge funds, with 39 funds having $2.50 billion invested, and ownership of 18.3% of Autodesk’s outstanding shares at the end of 2014. That was an increase of 2 funds from the previous quarter, though its popularity actually fell slightly as we added several more funds to our database during the past quarter. Mandel was the largest of those shareholders, with 14.46 million shares, which was a 229% increase in his position from the previous quarter, after first opening that position in the third quarter. The computer software company could be a potential takeover target of Adobe Systems Incorporated (NASDAQ:ADBE), who we’ll discuss below.
3. W.R. Grace & Co. (NYSE:GRA) is third on our countdown, with 42 funds owning $3.14 billion worth of shares, a 44.5% stake in the company, the largest of any on our list. Despite that, fund ownership declined by 6 over the fourth quarter, though capital investment actually increased by $400 million. Mandel’s new position accounted for a chunk of that, as he built a 2.90 million share stake during the fourth quarter, worth $277 million. The largest fund shareholder of those we track was Iridian Asset Management, which held 5.35 million shares at the end of the year, which was a 15% increase to its position from the previous quarter. W.R. Grace & Co. (NYSE:GRA) has announced its intentions to split its company into two, which should make each division (one focused on the chemicals side of the business, the other on the construction side) a more attractive pure play investment for interested buyers.
2. Adobe Systems Incorporated (NASDAQ:ADBE) lands in second, with 46 funds owning $3.54 billion worth of shares, which accounted for just 9.8% of the outstanding shares of the $39.32 billion market cap. Adobe has been at the center of takeover rumors before, including in 2010, when its shares soared 12% on news that Microsoft Corporation (NASDAQ:MSFT) was considering purchasing the software company. Those plans were eventually scuttled. Though Adobe shares have soared over the past two years, the company could be an attractive purchase for Apple Inc. (NASDAQ:AAPL); flush with cash as they are, and which has programs that compete, unsuccessfully, with Adobe’s own. Jeffrey Ubben is Adobe’s largest shareholder among the funds we track, with 16.0 million shares at the end of 2014, while Mandel was next with 12.18 million.
1. Humana Inc (NYSE:HUM) tops the list, with 49 funds owning $2.28 billion worth of shares. Fund ownership jumped from just 34 at the end of the third quarter, a nearly 50% increase. Larry Robbins of Glenview Capital was the largest shareholder with 2.21 million shares at the end of the year, and Humana’s performance in the first half of 2014 was one of the reasons he enjoyed strong 18% returns through the first half of last year, as Humana returned 23.74% during that time. Mandel owned 1.91 million shares, a slight decrease to his position from the previous quarter of 13%. Sterne Agee analyst Brian Wright noted that while Humana is a potential takeover target, it’s becoming more and more unlikely as its value continues to rapidly appreciate. Humana is now a $24.5 billion market cap company.
Disclosure: None
