Piggy-Back the Best Activist Hedge Fund into Darden (DRI), Staples (SPLS) and Yahoo (YHOO)


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Everyone is looking for certainty in investing.  How about an investor that has made money on 88% of their activist investments?

To be sure, it’s an amazing win rate. 

And the investor behind it is the activist hedge fund Starboard Value.

Starboard Value was founded in 2002 by Jeff Smith, a graduate of the University of Pennsylvania’s Wharton School, and former managing director of Ramius, a billion dollar-plus hedge fund.

Starboard has returned 22% annualized, before fees, since 2002.  That compares to just 6.7% in the S&P 500.  Smith’s Starboard Value has tripled the return of the S&P 500 over the past 13 years.  And more impressively, they have done it with less risk and less volatility.

Starboard has achieved this incredible track record by investing in undervalued small-to-mid-cap stocks and actively engaging with management to unlock value. It’s textbook activism.  And, Smith and his team are among the most thorough in their analysis, and perhaps the best in their execution.

Some of their most successful activist campaigns include AOL (AOL), where they made a 400% return.  And Office Depot (ODP), where they made a 300% return.  In fact, Starboard probably has more tripled-digit wins than any other activist hedge fund today.

At Billionairesportfolio.com we follow the best ideas of the world’s best investors.  And Starboard Value is our favorite investor to piggy-back.  We have recently followed them into Office Depot, where we exited with a triple-digit return, and Quantum Corp (QTM), where we have a 70% open profit. Most notably, we have never lost money following Starboard Value into a stock.  And with a win rate like they have, it would be difficult to pick the losers.

With that, here are the three big activist campaigns Starboard is currently engaged in:

  • Darden Restaurants (DRI): This is Starboard’s biggest position and biggest activist campaign.  Starboard is up about 34% already on their $700 million plus position in Darden.
  • Staples (SPLS): Staples is Starboard’s second largest and newest activist campaign. Starboard successfully convinced Office Depot and Staples to merge, creating a much more streamlined and profitable company.
  • Yahoo (YHOO): Yahoo is Starboard’s third largest, but the most high profile activist campaign. Since last September, Starboard has been pushing for major change at Yahoo, including spin-offs of valuable business lines, major cost cuts and a return to focus on its core business.  Starboard also recently asked Yahoo to buy back as much as $5 billion of their stock and Yahoo has complied.

BillionairesPortfolio.com helps average investors invest alongside Wall Street billionaires. By selecting the best ideas from the best billionaire investors and hedge funds, our exited stock investment recommendations have averaged a 28% gain since 2012, beating even Carl Icahn’s record for the same period.

More from Billionaire's Portfolio: 

How to Invest Alongside Billionaire Investors without Having a Billion Dollars

Five Stocks With Triple-Digit Potential If Boone Pickens Is Right About $80 Oil

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Investing Ideas , Retirement , Stocks
Referenced Symbols: YHOO , AOL , DRI , SPLS , QTM , ODP


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