Ricky Sandler‘s Eminence Capital has lost some confidence in its former second largest portfolio holding, Men’s Wearhouse Inc (NYSE:MW), according to a recent 13D filing with the Securities and Exchange Commission. The fund significantly decreased its stake in the men’s suits retailer by nearly 21% as it sold some 1.20 million shares at $49.80 in a single transaction on Wednesday. Eminence still holds 4.52 million shares of the company, representing 9.4% of its outstanding common stock.
Eminence Capital has been actively involved in the battle between Men’s Wearhouse Inc (NYSE:MW) and its former rival Jos. A Bank Clothiers since November 2013, when the fund disclosed a 9.8% activist stake in Men’s Wearhouse and urged for a merger between the two companies. In fact, it was Jos. A. Bank who first came with an offer to acquire Men’s Wearhouse, but the latter rejected the bid as inadequate. However, later on, Men’s Wearhouse decided to acquire Jos. A. Bank in a $1.8 billion deal that was completed last year. Mr. Sandler being a shareholder of both companies, supported Men’s Wearhouse’s decision to acquire Jos. A. Bank. “Eminence still holds a significant investment in Men’s Wearhouse and it remains among our top portfolio positions. We continue to have confidence in Men’s Wearhouse management, the company’s strategic direction and their opportunity to capitalize on the substantial benefits of the JOSB merger,” the fund said in an email statement.
Sandler increased his stake in Men’s Wearhouse Inc (NYSE:MW) by 25% in the fourth quarter according to his last 13F filing. His stake contained 5.72 million shares valued at $252.48 million, which represented nearly 4% of Eminence’s equity portfolio. Frank Brosens‘ Taconic Capital is another investor bullish on the men’s apparel retailer. After raising its stake by 49% during the fourth quarter, the fund holds around 2.09 million shares with a value of $92.05 million. The position constituted 3.13% of his fund’s portfolio value.
Fossil Group Inc (NASDAQ:FOSL) was Eminence’s largest holding at the end of the calendar year even after a 2% decrease in the position, which translated into shedding some 74,100 shares during the fourth quarter. According to the latest filing, the fund owned 2.72 million shares valued at $301.37 million of the designer, marketer and distributor of consumer fashion accessories. Among the 737 hedge funds that we track at Insider Monkey, 28 funds were invested in Fossil Group Inc (NASDAQ:FOSL), unchanged over the quarter. However, the total value of these funds’ stakes increased to $1.14 billion from $1.03 billion a quarter earlier.
Following a disappointing fourth quarter earnings release, Fossil is down by 24% year-to-date. The company’s Earnings per Share (EPS) of $3.00 were $0.11 below the estimates. Currency headwinds and also a drop in sales from its watches and leather division had an impact on Fossil Group Inc (NASDAQ:FOSL)’s revenue, which remained flat on the year.
Despite a 49% decrease Autodesk, Inc. (NASDAQ:ADSK) was the third largest equity position of Eminence Capital. The fund had 3.0 million shares with a value of $180.33 million representing 2.62% of the equity portfolio. Lone Pine Capital’s Stephen Mandel had the exact opposite stance on Autodesk, Inc. (NASDAQ:ADSK)’s future than what Sandler gave the company credit for. Mandel increased his stake in the company by a whopping 229%. The position, which formed 3.64% of his fund’s portfolio value, contained 14.46 million shares valued at $868.67 million at the end of the fourth quarter.
Autodesk, Inc. (NASDAQ:ADSK) is up nearly 6.6% on the back of strong financial results for the fourth quarter. An EPS of $0.25, which was $0.01 higher than expected and revenue of $664.60 million that beat estimates by $14.09 million kept the stock price rolling in the right direction. The stock is currently trading at a forward earnings multiple of 35.83.
Sandler also significantly reduced his stake in another one of his top holdings during the third quarter. The fund cut its stake in eBay Inc (NASDAQ:EBAY) by selling 1.48 million shares of the $70 billion market cap e-commerce company during the fourth quarter. At the end of the year the fund held 3.13 million shares worth $175.84 million. While the number of hedge funds invested in eBay Inc (NASDAQ:EBAY) decreased to 87 in the fourth quarter from 90 in the third, the amount of capital invested rose to $1.13 billion from $1.11 billion a quarter earlier. Out of the 59 billionaires that we track at Insider Monkey, 16 had taken long positions in eBay Inc (NASDAQ:EBAY) by the end of the year. eBay is set to spin-off its payment arm, PayPal this year.
GNC Holdings Inc (NYSE:GNC) occupied the fifth spot in Eminence’s 13F portfolio at the end of 2014. The fund owned 3.7 million shares valued at $174.98 million of the retailer of health and wellness products. Dinakar Singh‘s TPG-AXON Management LP also cut its stake in GNC Holdings Inc (NYSE:GNC) during the fourth quarter. The fund slashed its position by 38%, retaining 4.45 million shares valued at $208.85 million. The stock is up 2.17% year to date on the back of fourth-quarter EPS of $0.61, which beat estimates by $0.02. The revenue of $607.16 million were also $7.79 million higher than what analysts anticipated.
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