New York City hedge fund firm Clinton Group said it boosted its stake in NutriSystem to 5.2 percent and is now one of the top three shareholders of the weight loss company. In a letter to CEO Dawn Zier, the sometime-activist investor also called on the company to increase its dividend. It also said that while in the 10 months since she has headed the company Zier has “put NutriSystem on firm footing to succeed and grow,” it is “bewildered” by the stock price, which closed Friday at $14.17. Clinton Group estimates that based on the company’s cash flow opportunity, the stock would be worth somewhere in the mid $30s by the fall of 2015.
“Given the fundamental turnaround on the horizon and the opportunity for an increased dividend, we are surprised the stock is not trading over $20 today,” Clinton adds in the letter. It did not mention the stock has nearly doubled since April. Back in April 2012 Clinton agreed to drop its proxy fight when the company agreed to appoint an independent director. The same day, the company separately announced that it would replace its chairman and chief executive officer.
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Jeffrey Smith’s Starboard Leaders Fund has raised $300 million since its launch back in the spring, according to sources. The fund, which plans to invest in six to nine of the New York-based hedge fund firm Starboard Value’s larger, more active positions, is looking to raise as much as $500 million before it closes to new investors. Earlier this month, the Oklahoma Police Pension & Retirement System invested $5 million in the Starboard Value & Opportunity Master Fund and $10 million in the Starboard Leaders Fund, according to pionline.com. We reported earlier this year that Starboard started raising money for Leaders on April 15.
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Shares of J.C. Penney slumped another 2.71 percent, to close at $8.81. At one point during the trading session, the embattled retailer’s stock dipped to its lowest price since 1982. Earlier today a CNBC commentator pointed out that he saw a one million bloc of stock poised to be sold at $8.50 a share before the market opened.
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TPG-Axon Management is looking to boost its stake in Sandridge. The New York City hedge fund firm, which owns 7.4 percent of the shares of the oil and natural gas producer, said in a regulatory filing it entered into an option contract to buy 10 million shares at $6 apiece. The expiration date is March 22, 2014. The transaction will go through if the counterparties exercise their option to sell, it states in a regulatory filing. Earlier this year, Sandridge agreed to add four TPG nominees to its board.
