Rehan Jaffer’s H Partners Management disclosed today that its stake in Remy International Inc (NASDAQ:REMY) now has an activist nature. According to the Schedule 13D form filed with the SEC, the fund owns more than 2.8 million shares of Common Stock, which account for 8.75% of the company’s shares outstanding as of September 9, 2014.
H Partners Management is an independent investment firm founded by Rehan Jaffer in 2005 and based in New York City; it manages more than $1 billion in assets. Jaffer is an activist value investor that acquired his taste –and eye- for activist investing while working at Dan Loeb’s Third Point. In fact, Mr. Loeb himself once said: Jaffer “is super-hungry. He’s got a good nose. He’s very intelligent. So he’s got a great combination of having a high IQ, really strong financial analytics, a great nose for value, and great trader sense” (Hedge Hunters).
Remy International Inc (NASDAQ:REMY) is $602.15 million market cap global vehicular parts designer, manufacturer, remanufacturer, marketer and distributor of aftermarket and original equipment electrical components for automobiles, light trucks, heavy-duty trucks and other vehicles. After losing 19.5% year-to-date, its stock trades at barely 12.8 times the company’s earnings, at a 20% discount to its peers’ average valuation. In addition, it boasts a 2.12% dividend yield.
Despite a 6% reduction in its exposure to Remy International Inc (NASDAQ:REMY) over the second quarter of 2014, H Partners Management still seems quite bullish on the company, remaining as the largest institutional shareholder, amongst those we track, by a wide margin. Second in line is Jeffrey Bronchick’s Cove Street Capital, with more than half a million shares, worth over $12 million by the end of the second quarter. Jeffrey Moskowitz’s Harvey Partners also seems pretty confident about this auto-parts company’s future. The fund started a position with 232,500 shares over the second quarter of the year.
But you might wonder, why follow Mr. Jaffer’s pick? I should highlight that H Partners Management’s equity portfolio, worth more than $1.2 billion, only comprises five stocks. This means that the team has went though a lot of work and research to select them. Although all of the stocks in its portfolio are down year-to-date, you should not discard a turnaround –which is what the fund is betting on. In fact, analysts expect Remy International Inc (NASDAQ:REMY) to deliver average annual EPS growth rates around 14% over the next five years, outperforming both its industry peers and the broader market.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned
Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.
