According to a recent filing with the Securities and Exchange Commission, Tom Sandell has increased his stake in Viavi Solutions Inc (NASDAQ:VIAV), formerly JDS Uniphase Corporation, to approximately 12.0 million shares from the 1.77 million shares his fund Sandell Asset Management last reported holding. The updated position includes options to purchase an additional 6.0 million shares of common stock, as well as 375,536 shares referenced in cash-settled equity swaps. The move gives Sandell control over 5.1% of the company’s common stock. In addition, Sandell Asset Management has sent a letter to the board of directors of Viavi Solutions Inc (NASDAQ:VIAV), seeking changes that would boost shareholder value.
After eight years at Bear Sterns, where he worked with Wall Street legend Ace Greenberg, Tom Sandell started his own fund in 1998. His investment targets include equity special situations, merger arbitrage, and corporate credit opportunities. Approximately 34% of his portfolio is occupied by financial stocks, followed by consumer discretionary at 22% and healthcare stocks at 19%. In a recent letter, Sandell lashed out at the management of Ethan Allen Interiors Inc. (NYSE:ETH), which he accused of having stalled negotiations with him over a slate of directors Sandell plans to nominate for that company’s board. Earlier in August, Sandell sent a letter to Ethan Allen Interiors urging its management to either recapitalize the company or seek potential buyers. Sandell Asset Management holds 1.57 million shares of Ethan Allen or 5.5% of the company’s common stock. The fund’s biggest equity position continues to be Bob Evans Farms Inc (NASDAQ:BOBE) at 1.88 million shares valued at $96.2 million according to the fund’s latest 13F filing, the position being unaltered during the second quarter.
Follow Tom Sandell's Sandell Asset Management
Let’s first take a step back and analyze how tracking hedge funds can help an everyday investor. Through our research we discovered that a portfolio of the 15 most popular small-cap picks of hedge funds beat the S&P 500 Total Return Index by nearly a percentage point per month on average between 1999 and 2012. On the other hand the most popular large-cap picks of hedge funds underperformed the same index by seven basis points per month during the same period. This is likely a surprise to many investors, who think of small-caps as risky, unpredictable stocks and put more faith (and money) in large-cap stocks. In forward tests since August 2012 these top small-cap stocks beat the market by an impressive 60 percentage points, returning 118% (read the details here). Follow the smart money into only their best investment ideas all while avoiding their high fees.
Hedge fund legend George Soros is also a fan of Viavi Solutions Inc (NASDAQ:VIAV), with his fund, Soros Fund Management, having reported ownership of 6.26 million shares valued at $72.5 million in its latest quarterly filing. Clint Carlson boosted his stake in the company by 17% during the second quarter to amass just over 6.3 million shares worth some $72.9 million.
