One of the most concentrated hedge fund bets is getting crushed
Signet Jewelers missed on revenue expectations.
Popular hedge fund stock Signet Jewelers (SIG), the owner of mall stores Kay Jeweler’s, Zales, and Jared The Galleria of Jewelry, is getting crushed after the company’s disappointing earnings results.
The company reported earnings results for the first quarter ended April 30 that missed on revenue expectations. The company also reaffirmed downbeat guidance for 2017.
In addition, Signet said that it has engaged Goldman Sachs as it "conducts a strategic evaluation" of its credit portfolio.
"We are always looking for the best ways to optimize our operating model, and to that end, the Board has determined to undertake a formal and comprehensive strategic evaluation of the Company’s credit portfolio. This is a top priority and as we move through this review, we will remain focused on executing our operational plans and driving profitable growth in our business," CEO Mark Light said. "The primary objective of this process will be to ensure Signet has an optimized business structure that enhances our ability to execute against our strategic objectives which in turn delivers value for shareholders.”
Signet's stock was last down 8.6%, or down $9.31, at $99.06 per share in mid-day trading. The stock has fallen more than 19.9% this year.
Signet Jewelers ranked No. 4 on Goldman Sachs' twenty “most concentrated” hedge fund holdings as of March 31. The company, which has a market cap of $8 billion, has about 24% of its stock owned by hedge funds, according to Goldman.
The stock is owned by the likes of Keith Meister’s Corvex Management, Farallon Capital, Pennant Capital Management, Daniel Loeb’s Third Point LLC, and Scopus Asset Management, according to data compiled by Symmetric.
Corvex, which first initiated its stake in the fourth quarter of 2013, last held more than 5.9 million shares. Farallon Capital has been an investor since the second quarter of 2014 and last held more than 1.9 million shares. Loeb’s Third Point initiated a 1 million position in Signet during the first quarter of 2016.
Julia La Roche is a finance reporter at Yahoo Finance.
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