Keith Meister‘s Corvex Capital has increased its activist stake in Signet Jewelers Ltd. (NYSE:SIG), according to a recent 13D filing with the Securities and Exchange Commission. The fund now owns 5.75 million shares of the Bermuda-based company, versus 5.51 million disclosed earlier. F0llowing the increase, the stake represents 7.2% of the company’s outstanding shares.
Corvex is a relatively new fund established in 2011 with $250 million in seed capital from the renowned investor George Soros. Meister plays out well his role as an activist investor. Similar to his mentor, Carl Icahn, Mr. Meister is not afraid to call for extreme measures such as replacement of the entire board, or changing the management of a company if the need be, to accomplish his activist aims. In fact Corvex Management along with Related Cos. changed the entire board of CommonWealth REIT last year. The market value of the fund’s equity portfolio stands at $8.15 billion, with the energy sector contributing 28% to it and finance another 20%, according to the latest 13F filing. Most valuable holdings are represented by Williams Companies Inc (NYSE:WMB), Fidelity National Financial Inc (NYSE:FNF) and Signet Jewelers Ltd. (NYSE:SIG).
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Moving on to Corvex’s largest holding, represented by Williams Companies Inc (NYSE:WMB), which amasses 22.98% of the fund’s portfolio and contains 41.68 million shares valued at $1.87 billion. Meister was also appointed to Williams’ Board of Directors in November last year. The stock of the $36.3 billion company is up by about 21.32% over the last year. In contrast, the S&P 500 only gained 10.4% during the same time period. Among the billionaires that we track at Insider Monkey, eight held long positions in Williams Companies Inc (NYSE:WMB), totalling $978.16 million towards the end of the fourth quarter. Dan Loeb is one of them, as his fund, Third Point, holds some 4.0 million shares valued at $179.76 million, according to its latest 13F filing.
Williams Companies Inc (NYSE:WMB) offers a particularly high dividend yield of 4.7%, and its recently merged Master Limited Partnership, Williams Partners L.P. (NYSE:WPZ) offers a 6.9% yield as compared to S&P 500’s 1.91%. The yield also puts the company among the hedge funds’ top dividend stock picks. After the completion of the merger between Williams Partners and Access Midstream Partners in February this year, the company has become one of the largest operators of gas pipelines in the US. The future growth outlook for the company also looks promising as it plans to invest nearly $9 billion in the next two years.
Signet Jewelers Ltd. (NYSE:SIG) represents Corvex’s second-largest holding. Alan Fournier’s Pennant Capital Management is another significant shareholder of Signet with 2.27 million shares, as of the end of 2014. The parent company of Kay Jewelers and Jared the Galleria of Jewelry benefited from the $1.4 billion acquisition of Zale Corporation last year as it improved its bridal jewelry portfolio and also helped Signet Jewelers Ltd. (NYSE:SIG) build on its digital ecosystem thus increasing customer engagement and sales. Synergies from this acquisition are expected to contribute between $150 million and $175 million in operating profit during the next three years.
Corvex holds 20.24 million shares of Fidelity National Financial Inc (NYSE:FNF) valued at $697.3 million, according to its latest 13F filing. The stock is advanced by 31% over the last year. Fidelity National Financial Inc (NYSE:FNF) is a provider of title insurance, technology and transaction services to the real estate and mortgage industries. The company had a 12.5% profit margin in 2014, as compared to its peers’ average of 8.0%. Larry Robbins’ Glenview Capital is also bullish on the stock and increased its stake in the company by 19% during the fourth quarter to 11.16 million shares.
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