February 15, 2021 BARRON’S M7
INSIDE SCOOP
Harley-Davidson
CEO Jochen Zeitz
recently went
down a familiar
road: buying
shares of the
motorcycle maker
after they’d
dipped.
ies to 4,241,624 shares, or 7.5% of
the tradable stock. The amounts are
inclusive of 3,882,307 TreeHouse
Food shares Jana Partners bought
at prices ranging from $39.00 to
$44.22 apiece from Dec. 15 through
Feb. 2. Jana Partners disclosed in a
filing that it thought the “shares are
undervalued and represent an at-
tractive investment opportunity
with the Issuer nearly three years
into a comprehensive turnaround.”
Jana Partners said it had discus-
sions with TreeHouse Foods “re-
garding avenues to resolve [Tree-
House’s] undervaluations and total
stockholder return, including eval-
uating a sale of [TreeHouse], opera-
tions, [and] capital allocation,”
among other things. On Jan. 29,
Jana Partners and its affiliates noti-
fied TreeHouse of its intent to nom-
inate three representatives for elec-
tion to TreeHouse’s board during
the coming shareholder meeting.
Decreases in
Holdings
Ingles Markets(IMKTA)
Gamco Investors(GBL) disclosed
a net reduction of 15,800 shares in
the Southeastern U.S. grocery
chain, down to 1,843,040 shares.
From Dec. 8 through Feb. 4, Gamco
Investors sold 22,500 Ingles Mar-
kets shares at prices ranging from
$40.65 to $51.45. Over that same
period, Gamco Investors also pur-
chased 6,700 Ingles Markets shares
at prices ranging from $37.88 to
$43.30 each. Following those trans-
actions, Gamco Investors now
owns roughly 13% of Ingles Mar-
kets’ outstanding stock.
Tenet Healthcare(THC)
Glenview Capital Management
reported a smaller position in the
hospital chain of 16,225,320 shares.
On Feb. 2, Glenview Capital sold a
total of 2,033,490 Tenet Healthcare
shares at prices ranging from
$48.50 to $51.90 each; 2,000,000
of those shares were sold in a
block-trade sale at $48.50 apiece.
No reason was cited for the sales,
which leave Glenview Capital with
a 15.4% stake in Tenet Healthcare’s
tradable stock.
POWER PLAY
Harley-DavidsonCEO
JochenZeitzBoughtStock
H
arley-Davidsonstock
tumbled after the maker
of iconic motorcycles
reported a disappointing
fourth quarter. Its chair-
man, president, and
CEO, Jochen Zeitz,
bought shares on the dip.
Harley-Davidson (ticker: HOG)
shares slipped 1.3% in 2020. U.S trade
disputes and fewer younger custom-
ers were hurting sales. Zeitz was
named to the top post in May, and
Wedbush analyst James Hardiman
added Harley-Davidson stock to its
Best Ideas List based on the changes
Zeitz was making. So far this year,
however, shares have slipped about
1%, to around $36, after giving up
gains earlier this month.
On Feb. 2, Harley-Davidson re-
ported a surprise fourth-quarter loss,
and sales came in well short of the
consensus estimate. The stock took a
dive, to close 17.2% lower.
By Feb. 4, when shares hadn’t re-
covered, Zeitz paid $1 million for
30,800 Harley-Davidson shares on
the open market, at a per-share aver-
age price of $32.47. According to a
form he filed with the Securities and
Exchange Commission, Zeitz now
owns 253,720 shares.
Harley-Davidson didn’t make Zeitz
available for comment on his stock
purchase.
The CEO has been down this road
before. Zeitz bought millions of dol-
lars of Harley-Davidson stock on the
open market in May and also in Au-
gust.
On Feb. 4, UBS analyst Robin M.
Farley lowered earnings estimates,
trimmed the price target on Harley-
Davidson stock to $33 from $35, and
kept a Neutral rating.B
By ED LIN
DealsAre
HeatingUp
InDefense
T
he recent $2.8 billion buyout
ofCubicmay portend even
more deal-making activity in
the defense space.
Cubic (ticker: CUB) announced
on Monday that it will be acquired
by Veritas Capital and Elliott Man-
agement for $70 a share, represent-
ing a nearly 58% premium to the
price when the investors an-
nounced their intention in Septem-
ber to acquire Cubic. The deal is
expected to close in the second
quarter.
There was a feeling that Cubic
wasn’t being properly understood
by the market and that it might be
better off as a privately held com-
pany. It operates two seemingly
disparate businesses: a transporta-
tion-technology unit, which offers
fare collection and other services
for major transportation hubs, and
a defense business.
Also, Cubic is facing challenges
in those two operations. The com-
pany has won a $39 million con-
tract with the New York Metropoli-
tan Transportation Authority,
which is seeing low ridership due
to the coronavirus pandemic. Ana-
lysts also expect the Biden adminis-
tration to cut defense budgets.
“The changing defense-contract
environment is forcing both large
defense players to pay for growth
while also pushing smaller players
to consider partnering with larger
peers,” Benchmark analyst Josh
Sullivan wrote in a recent note.
Indeed, Veritas has already
agreed to buy Perspecta (PRSP).
Lockheed Martin(LMT) will ac-
quire AerojetRocketdyne(AJRD),
andTeledyne Technologies
(TDY) will buyFlir Systems
(FLR).
Making deals may be the best
defense.B
By CARLETON ENGLISH
Activist Holdings
Forward Air(FWRD)
Ancora Advisorsrevealed a
higher stake in the freight and lo-
gistics firm of 1,733,799 shares,
equal to 6.3% of the outstanding
stock. Those figures include the
recent purchase of 286,251 Forward
Air shares from Dec. 29 through
Feb. 8, at prices ranging from
$72.31 to $80.85 each. Ancora deliv-
ered a letter to Forward Air on Feb.
9 listing four nominees for election
to Forward Air’s board during the
2021 annual shareholder meeting.
The next day, Ancora issued an
open letter to Forward Air sharehold-
ers explaining its reasons for the nom-
inations. Ancora alleges that Forward
Air has mismanaged capital, specifi-
cally in reference to numerous acqui-
sitions since 2007. Ancora further
alleged “deterioration” in operating
margins and “lackluster” performance
that have led Forward Air to be over-
shadowed by peers over the past five
years. Given that, Ancora felt its nom-
inations were necessary “to transform
[Forward Air] into an industry
leader.”
TreeHouse Foods(THS)
Jana Partners ramped up its holding
in the maker of store-branded grocer-
These disclosures are
from 13Ds filed with
the Securities and
Exchange Commission.
13Ds are filed within
10 days of an entity’s
attaining more than
5% in any class of a
company’s securities.
Subsequent changes
in holdings or inten-
tions must be re-
ported in amended
filings. This material is
from Feb. 4 through
Feb. 10, 2021. Source:
InsiderScore.com