Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Activist investors raise bets on retailers and other consumer cyclicals-filings

Published 2021-11-15, 07:13 p/m
Updated 2021-11-15, 07:17 p/m
© Reuters. FILE PHOTO: Shoppers are seen outside Macy's in the Manhattan borough of New York City, New York, U.S., March 30, 2021. REUTERS/Caitlin Ochs/File Photo

© Reuters. FILE PHOTO: Shoppers are seen outside Macy's in the Manhattan borough of New York City, New York, U.S., March 30, 2021. REUTERS/Caitlin Ochs/File Photo

By Svea Herbst-Bayliss

BOSTON (Reuters) - Investors who prod companies to perform better made new and bigger bets on consumer cyclical stocks including retailers, a food service distributor and carmakers during the third quarter amid signs of stronger growth early in the year.

Activist investment firm Jana Partners bought 4.6 million shares in Macy's (NYSE:M), according to a new regulatory filing, and is urging the retailer to spin off its e-commerce business.

Sachem Head Capital Management boosted its stake in U.S. Foods Holding by 67% to 11.4 million shares, and Mantle Ridge bought 12.7 million shares in discount retailer Dollar Tree Inc (NASDAQ:DLTR) and said in a filing last week that it wants management to take steps to raise the share price.

Engine No. 1, the sustainability-focused firm that forced ExxonMobil to add three newcomers to its board this year, raised its holdings in car makers Tesla (NASDAQ:TSLA) by 78% and General Motors (NYSE:GM) by 20%, according to filings made on Monday.

The firms increased their exposure to these types of stocks, sometimes called consumer discretionary stocks, as shoppers were ready to spend stimulus checks, confident the worst of the pandemic would soon be over.

More recently, some investors have grown concerned that rising inflation could dampen spending in some areas, as rising costs on everything from gasoline to groceries fanned the biggest annual consumer price gain in more than three decades.

Expectations for fresh travel and more dining out also prompted managers like Sachem Head's Scott Ferguson to boost his holding of ride sharing company Uber by 230% to 5.1 million shares, the filing showed.

Similarly Maverick Capital, not known as an activist investor, raised its stake in Uber by 10% to 2.4 million shares, while PointState Capital owned 3.9 million shares of Uber, marking a 453% increase.

Cinctive Capital Management boosted its stake in General Motors by 323,284 shares held, the filings show.

Money managers are required to report their stakes in U.S.-based companies 45 days after the end of the quarter and while the data are often backward-looking, they are closely watched for investment trends.

Many of the consumer cyclical stocks have performed well this year but some so-called activist investors expect to reap more gains by pushing management to pursue dramatic changes.

© Reuters. FILE PHOTO: Shoppers are seen outside Macy's in the Manhattan borough of New York City, New York, U.S., March 30, 2021. REUTERS/Caitlin Ochs/File Photo

At Macy's, which like other retailers had to temporarily shutter stores during the height of COVID-19, management could create a digital goldmine, Jana's Scott Ostfeld said in October when he laid out arguments to spin off the e-commerce unit.

At U.S. Foods, Sachem Head has not precisely spelled out the changes it wants to see but the company is already looking to shake up its executive suite by looking for a chief operating officer and a new chief financial officer.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.