Jeffrey Smith’s Starboard Value LP reduced its exposure to Tessera Technologies, Inc. (NASDAQ:TSRA) by 575,000 shares according to a filing revealed this week. According to the 13D Form filed with the U.S. Securities and Exchange Commission, the fund now owns 2.61 million common shares, representing 4.9% of the company’s outstanding stock. The investment firm also entered several new positions last quarter. According to its latest 13F filing, Starboard’s top 3 new picks were Staples, Inc. (NASDAQ:SPLS), Clean Harbors Inc (NYSE:CLH), and Alibaba Group Holding Ltd (NYSE:BABA).
Starboard Value is an activist hedge fund that was founded in 2002 by Jeffrey Smith. The firm employs a fundamental oriented approach and focuses primarily on undervalued companies whose management it then seeks to actively engage in discussions in order to identify opportunities to unlock further shareholder value. As of the end of the last quarter, Starboard Value had an equity portfolio valued at $4.41 billion, up from $2.88 billion disclosed at the end of the third quarter. The hedge fund’s top picks for the fourth quarter included MeadWestvaco Corp. (NYSE:MWV), Yahoo! Inc. (NASDAQ:YHOO), and Office Depot Inc (NASDAQ:ODP).
On Wednesday it was revealed that Starboard Value reduced its position in Tessera Technologies, Inc. (NASDAQ:TSRA) for the second time this quarter. Although it had already disclosed selling 1.0 million shares during the third quarter, and continues slashing its stake in the equity, the activist hedge fund still ranks as one of the company’s largest institutional investors. Furthermore, Starboard remains actively engaged in Tessera, with its representative Peter A. Feld serving on the Board of Directors.
After gaining 81% in 2014, Tessera Technologies, Inc. (NASDAQ:TSRA)’s shares have climbed by around 14% year-to-date. Starboard Value is not the only investment firm who benefited from this solid performance, as numerous other funds held a stake in the company. Steve Cohen’s Point72 Asset Management for example held a position of 1.20 million shares. Jim Simons’ Renaissance Technology was also betting on Tessera, increasing its holding by 39% last quarter, and disclosing ownership of around 1.07 million shares.
Starboard Value also revealed several new picks in its equity portfolio last quarter, including a position of 15.84 million shares in Staples, Inc. (NASDAQ:SPLS). The activist hedge fund seems to be particularly bullish regarding this stock, since it increased its exposure even further this quarter, and currently owns 31.46 million shares. Starboard recently commended the company’s Board of Directors for negotiating and announcing the acquisition of Office Depot Inc (NASDAQ:ODP). Furthermore, the activist hedge fund stated that management’s estimate of post-merger synergies is too conservative. According to Starboard, the acquisition of Office Depot could result in synergies of more than $2 billion. In addition, the hedge fund claims shares of Staples, Inc. (NASDAQ:SPLS) could gain another 100% once the merger is completed.
Clean Harbors Inc (NYSE:CLH) was also amongst Starboard Value’s top new picks last quarter, with a position of 1.35 million shares. Despite a weak performance in 2014 which saw shares drop by 19%, the stock has already gained 16.5% year-to-date. Starboard’s stake in the company is relatively small at 2.25%, yet the fund seems to have targeted Clean Harbors for a reason. Considering the waste disposal and environmental services firm has been underperforming relative to its industry peers, Mr. Smith’s firm might take on a larger stake and an activist role in the future, however no such plans have been revealed yet. In addition to Starboard Value, Clean Harbors Inc (NYSE:CLH) has the backing of numerous investment firms. Ralph V. Whitworth’s Relational Investors continues to hold a large activist stake of 2.98 million shares in Clean Harbors, though it’s slashed that position by 2.90 million shares since the end of 2014 when it held 5.88 million shares. Meanwhile, Clifton S. Robbins’ Blue Harbour Group was also betting on the stock last quarter, entering a position in the company with the purchase of 1.43 million shares.
Starboard Value also entered a new position in Alibaba Group Holding Ltd (NYSE:BABA) last quarter, with the acquisition of 400,000 shares of the company’s common stock. Despite its popularity amongst investors, the stock has lost around 20% year-to-date and is currently trading near its 52-week low of $80.03 per share. Nevertheless, billionaire hedge fund managers and institutional investors such as Starboard, maintain a bullish stance towards Alibaba Group Holding Ltd (NYSE:BABA). Dan Loeb’s Third Point was one of the company’s largest investors, disclosing a stake of 10.0 million shares last quarter.
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