Clifton Robbins, Blue Harbour Group: Think Like an Owner – Finding Companies Poised to Unlock Value from the 9th Annual Value Investing Congress.
Clifton Robbins is founder of Blue Harbour Group LP, which uses a private equity approach to investing in public companies. Blue Harbour is a lead minority investor for several publicly traded companies and works in a collaborative manner with management to unlock shareholder value. Robbins founded the firm in 2004. Prior to founding Blue Harbor, Robbins was a managing member of General Atlantic Partners LLC, a global private equity firm, and served on General Atlantic’s Executive, Investment and Portfolio Review Committees.
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[11:20am] Blue Harbour takes a private-equity mindset to activist investing – “Think Like an Owner.” Seek to work with management teams that want to engage and unlock shareholder value, do not run proxy battles, etc.
Focus today is on Chico’s FAS (CHS). Specialty retailer with diversified portfolio of brands targeting female consumers ages 30-65+. $2.6bn market cap with $2.3bn EV (net cash ~$300m). Small current footprint with all brands growing, opportunity to grow store base over 50%. Valuation discount to peer group, “growth stock trading like a value stock.”
Margin expansion opportunities as EBIT margins have room to improve by 400bps. Advantaged real estate strategy: smaller stores with much higher sales/sqft compared to peers.
Values Chicos at $22-28 offering upside potential of 40-80% from today’s level.
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