DRI advanced Starboard Value. ODP did not
Starboard Value Lp returns an estimated -1.85% for June 2015 - the fully hedged version returns -0.18%
Starboard Value generated a -1.85% return on their publicly disclosed long portfolio for the month ending June 2015, underperforming the S&P500 by 186 basis points (bp). On a hedged basis, the portfolio would have returned -0.18% StockAlpha over the same period. Starboard's StockAlpha reflects the return of the net return if each security in their portfolio was hedged with a sector ETF, such that the resulting portfolio was market, beta and sector neutral. StockAlpha in the Cons. Disc. sector contributed the most to StockAlpha during the month.
Positive Contributors to Starboard's Returns
Starboard’s position in Darden Restaurants (DRI) contributed the most to the performance of the manager’s long-portfolio during the month. Over the month of June 2015, Starboard's 25.2% position in Darden Restaurants (DRI) increased in value by 8.1%, contributing 2.03% (25.2%*8.1%=2.03%)to the long portfolios overall return. Looking at Starboard's portfolio through a fully hedged StockAlpha lens, the holding of Darden Restaurants (DRI) also provided the largest contribution to fully hedged returns. Darden Restaurants (DRI) returned 8.1% during the month compared to the Cons. Disc. sector, which returned 0.6%. As a result, after taking into account Darden Restaurants (DRI)'s beta relative to its sector, the position contributed 1.9% of StockAlpha to the Starboard’s monthly performance.
Negative Contributors to Starboard's Returns
Much of the drag on Starboard’s long-portfolio during the month can be attributed to the holding of MeadWestvaco Corporation (MWV). Over the month of June 2015, the manager's 15.7% position in MeadWestvaco Corporation (MWV) returned -6.8%, contributing -1.06% (15.7%*-6.8%=-1.06%)to the long portfolios overall return. Looking at Starboard's portfolio through a fully hedged StockAlpha lens, the holding of Office Depot Inc. (ODP) provided the most negative contribution to fully hedged returns. Office Depot Inc. (ODP) returned -6.6% during the month compared to the Cons. Disc. sector, which returned 0.6%. As a result, the position contributed -0.9% of StockAlpha to the manager’s monthly performance.
Overlap with other hedge funds
Starboard’s top 10 largest positions, Wausau Paper Corp. (WPP) is the name that is owned by most other hedge funds. 1.8% of hedge funds within Symmetric's universe had a position in Wausau Paper Corp. (WPP) as of March 31, 2015, making it a contrarian name relative to other stocks, even though it is the most consensus within the manager's top positions. Starboard initiated its position in Wausau Paper Corp. (WPP) 3.75 years ago. Overall, Starboard's book is contrarian, with the average position held in the portfolio held by 8.6% of hedge funds. Use Symmetric to surface managers with unique sources of alpha and flag those that may be in trouble.
