Ricky Sandler’s Eminence Capital has taken its first activist stake in several years.
The move comes at the same time the hedge fund is on pace to post its best performance since 2014.
Eminence disclosed in a 13D filing on Thursday that it owns 8.3 percent of Ashland Global Holdings, a specialty chemicals company serving a variety of markets, including adhesives, architectural coatings, automotive, construction, energy, food and beverage, personal care, and pharmaceuticals. The company has a nearly $5 billion market capitalization. The stock is now Eminence’s third-biggest U.S. long position.
In the regulatory filing, Eminence says it bought the shares for investment purposes but that it intends to discuss with the board of directors and management “a variety of operational and strategic opportunities to enhance shareholder value.” It then used standard boilerplate language to suggest it may take some undefined future action.
Eminence declined to comment.
Eminence started buying the stock on May 6 and paid between roughly $72 and $80 for the shares, according to the filing. The stock is currently trading in the high $70s. Its all-time high was around $86, where it was trading last September.
Interestingly, on May 7 Ashland announced it entered into an accelerated share repurchase agreement with Goldman Sachs to buy back $200 million of common stock from the investment bank. In March 2018, Ashland’s board approved a $1 billion share repurchase program.
Eminence, meanwhile, is enjoying its best year since 2014. It is up 15 percent through May after losing less than 1 percent for the month amid the stock market’s broad selloff.
The firm, which currently manages $7 billion, runs a diversified portfolio. At the end of the first quarter, it held around 45 different common stock long positions in its $6.7 billion U.S. equity portfolio, according to its most recent quarterly 13F filing.
Including Ashland, three of its six biggest long positions were established in the first quarter or the current quarter.
Capri Holdings became the second-biggest long in the first quarter after Eminence bought more than 8.5 million shares of the fashion company known for its Versace, Jimmy Choo, and Michael Kors brands.
The hedge fund’s other new major recent new position is Tyson Foods. It is now Eminence’s sixth-biggest long.
On Thursday, Tyson announced plans to offer plant-based nuggets, spooking investors in Beyond Meat, whose stock has surged since its recent IPO due to the popularity of its plant-based meatless products.
Tyson sold its 6.5 percent stake in Beyond Meat back in April shortly before Beyond Meat went public.
Eminence’s biggest long is Berry Global Group, which makes plastic packaging products.
