CDK has its third activist investor
Elliott Associates has gone active on CDK with a 4% stake. They haven’t laid out any plans, but they do join Sachem Head Capital and Fir Tree, both currently active. Sachem Head owns 5.2% of the company and has CDK as its top holding – making up 32% of its portfolio. Then, there’s Fir Tree, which owns 9% and also has it as its top holding – making up 7.6% of the fund’s portfolio.
Many of the most well-known hedge fund managers in the world engage in philanthropy, and in doing so, they often reveal their favorite hedge funds through a review of their foundation's public filings. Bill Ackman's Pershing Square Foundation invested in several hedge funds during the fiscal years that ended in September 2019 and September 2020.
Recall CDK is the auto software spinoff from Automatic Data Processing. It’s a play on software for car dealerships – making up about 80% of its revenues. The other 20% is digital marketing. It’s already had a heck of a run, up 66% since its September spinoff; now trading at 18.5x forward EV/EBITDA, which is nearly double what DealerTrack Technologies trades at.
Even still, you’ve got three funds with active 13Ds that are bullish. It’s an interesting story given it is newly spun off and performing relatively well. Other funds are bullish as well – we’ve got some good info/analysis in that regard, email us if you’re interested in that analysis.