Jeffrey Smith’s Starboard Value has disclosed a number of recent moves through filings with the SEC and we have all the latest details. Included is a new activist position in Brink’s Company (NYSE:BCO), an increased position in the fund’s Silicon Solution, Inc. (NASDAQ:ISSI) holding, and finally the resignation of Smith from the board of Quantum Corp (NYSE:QTM).
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Let’s start with Smith’s new position in Brink’s Company (NYSE:BCO), which his fund began amassing on March 10. By May 1 it had gathered 3.97 million shares, giving it an 8.2% stake in the security services company. While the position is activist, Starboard did not express any intention to engage with the company’s management or board of directors concerning its operations at this time. Instead it cited the company as being an attractive investment opportunity with shares that were undervalued.
It hasn’t taken long for the investment to pay immediate dividends, as Brink’s Company (NYSE:BCO)’s shares are up by 23% since March 10. The company’s latest earnings report on May 1 contributed to a good chunk of those gains, with Brink’s smashing analysts’ earnings estimates by more than 50%, posting earnings of $0.41 per share, despite revenue actually coming in below estimates. Well-known for its iconic armored trucks which are used to transport cash and valuables, Brink’s Company (NYSE:BCO) is up over 50% over the past six months. Scopia Capital was another fund who opened a big position at the right time, getting on board the stock during the fourth quarter with a position of 2.88 million shares.
Let’s move on to Quantum Corp (NYSE:QTM), where Smith has resigned from the board of directors after serving on it since 2013. As per a replacement rights agreement with Quantum, Smith was able to recommend Robert J. Anderson, the Chief Financial Officer of Tessera Technologies, Inc. (NASDAQ:TSRA), a company in which Smith also owns a large position, as his replacement on the board.
It took several quarters, but Smith’s labors on Quantum’s board have begun to bear fruit over the past six months, with the physical and virtual storage company’s financial results and shares improving immensely during that time. Shares have doubled in value since October 10 and Quantum’s Q4 2015 earnings results, announced on May 6, were impressive, with quarterly revenue up 15% to $147.8 million.
“I have enjoyed working with the management team and board of Quantum, and I am proud of our accomplishments. Since joining the board in 2013, Quantum’s financial results have improved significantly, and its strategy has become increasingly focused on optimizing the cash flow from the company’s long-standing tape products while further expanding its footprint in the rapidly growing scale-out storage market. As a result, the company is well-positioned to continue to drive profitable core organic revenue growth. To be sure, there is still more to be accomplished, and we believe that the current board, with the addition of Robert Andersen, will be well-suited to capitalize on the opportunities ahead. In particular, we believe that Robert’s extensive experience as a senior executive at technology companies will be highly valuable to Quantum as it continues in its execution and evolution,” Smith said.
Starboard Value holds a position of 44.32 million shares, which includes shares underlying certain convertible senior subordinated notes as well as restricted stock units granted to Smith. Nokomis Capital had the largest exposure to Quantum Corp (NYSE:QTM) of the funds in our database, at 5.56%.
Lastly, Smith has increased his position in Silicon Solution, Inc. (NASDAQ:ISSI) to 3.64 million shares, an addition of just under 500,000 shares purchased on April 30 at $18.50 per unit. The move is just the latest example of Smith’s bullishness on the stock, which first manifested late in the fourth quarter when he revealed a new position of 2.20 million shares as well as his joint plans as a member of a newly formed stockholder group to nominate a new director to the semiconductor company’s board.
By the end of the year Smith had increased his position to just under 2.4 million shares, which was bumped up yet again to over 3.14 million shares as per an April 14 filing. Shares of Silicon Solution, Inc. (NASDAQ:ISSI) are up by nearly 30% since Smith’s new position was revealed on November 28, exhibiting once again the golden touch of one of the best fund managers in the world today. Billionaire Chuck Royce’s Royce and Associates was the only other fund in our database with a notable position in Silicon Solution as of the end of 2014.
Disclosure: None
