Summary: Jeff Smith of Starboard Value presented his latest investment ideas at a conference in New York. He highlighted web services company GoDaddy, calling for a growth-profitability combination of 40%. Smith also discussed media conglomerate News Corp and suggested a spinoff of its digital real estate assets for potential share price appreciation. Additionally, he mentioned drug trial contract research company Fortrea, stating that improving margins could lead to significant share price appreciation.
Jeff Smith, the activist investor of Starboard Value, revealed his latest investment ideas during his speech at the 13D Monitor Active-Passive Investor Summit in New York City. The first idea he discussed was web services company GoDaddy, which happens to be the largest holding in his portfolio. Smith believes that GoDaddy should strive for a growth-profitability combination of 40% by 2024. He predicts that if the company achieves this target, it will generate at least $10 in free cash flows per share in fiscal 2025. Smith expressed confidence that successful execution of a margin improvement plan by GoDaddy’s management will greatly benefit shareholders.
Another investment idea put forth by Smith is media conglomerate News Corp. He described the company as having a collection of highly valuable assets, such as Dow Jones, book publishing, subscription video services, and other news media. Smith believes that News Corp can significantly enhance shareholder value by spinning off its digital real estate assets through a tax-free transaction. He suggested that this move could lead to a notable appreciation in the company’s share price.
Smith also touched upon drug trial contract research company Fortrea, in which he recently acquired a stake. He expressed that Fortrea is currently undervalued compared to its peers. According to him, if the company improves its margins, it has the potential to more than double its stock price. On the day of his speech, shares of Fortrea rose about 3%.
Tags: Jeff Smith, Starboard Value, investment ideas, GoDaddy, News Corp, spinoff, Fortrea