On March 13, 2025, Starboard Value LP (Trades, Portfolio), a prominent hedge fund, made a strategic move by acquiring an additional 1,117,000 shares of Algonquin Power & Utilities Corp (AQN, Financial). This transaction increased the firm's total holdings in the company to 66,433,000 shares. The shares were purchased at a price of $4.9 each, reflecting a calculated decision to bolster its position in the Canadian utility company. This acquisition resulted in a 0.1% increase in the firm's portfolio position, now accounting for 5.89% of its total holdings.
Starboard Value LP (Trades, Portfolio): A Focused Investment Approach
Founded in 2002 by Jeff C. Smith and Mark Mitchell, Starboard Value LP (Trades, Portfolio) is a New York City-based hedge fund known for its focus on undervalued small-cap companies in the U.S. public equity markets. The firm manages approximately $4.7 billion in assets across 26 accounts, employing a fundamental methodology to identify investment opportunities. Starboard Value's portfolio is heavily weighted towards the consumer discretionary sector, with significant investments in technology, communication services, finance, information technology, materials, and industrials. The firm has grown significantly since its inception, with its assets under management increasing from $250 million in 2011 to its current level.
Algonquin Power & Utilities Corp: A Diversified Utility Player
Algonquin Power & Utilities Corp is a Canadian company engaged in the generation, transmission, and distribution of electricity, water, and natural gas. The company operates through two main segments: the Regulated Services Group and the Hydro Group. The Regulated Services Group, which generates the majority of the company's revenue, operates utility systems in the United States, Canada, Bermuda, and Chile. With a market capitalization of $3.91 billion, Algonquin's current stock price stands at $5.105. The company is considered modestly undervalued with a GF Value of $5.89, resulting in a price to GF Value ratio of 0.87.
Financial Metrics and Valuation
Algonquin Power & Utilities Corp's financial metrics indicate a mixed performance. The company's GF Score of 72/100 suggests likely average performance. The Balance Sheet Rank is 3/10, while the Profitability Rank is 6/10, and the Growth Rank is 4/10. Over the past three years, the company has experienced a revenue decline of 0.90%, but its EBITDA has grown by 8.80%. The Altman Z score of 0.19 indicates potential financial distress, while the Piotroski F-Score is 5, suggesting moderate financial health.
Performance and Growth Indicators
Algonquin's recent performance shows a year-to-date price change of 12.44%. The company's interest coverage ratio is 1.10, indicating limited ability to cover interest expenses. The Operating Margin growth has been negative at -2.60%, reflecting challenges in maintaining profitability. Despite these challenges, the company's GF Value Rank is 9/10, suggesting that the stock is trading below its intrinsic value.
Other Gurus Holding Algonquin Stock
In addition to Starboard Value LP (Trades, Portfolio), other notable investors in Algonquin Power & Utilities Corp include GAMCO Investors, the largest holder, and Keeley-Teton Advisors, LLC (Trades, Portfolio). These investors' involvement indicates a broader interest in the company's potential for growth and value realization.
Conclusion: Strategic Implications of the Transaction
Starboard Value LP (Trades, Portfolio)'s recent acquisition of additional shares in Algonquin Power & Utilities Corp underscores the firm's strategic focus on undervalued opportunities. This move could have significant implications for Algonquin's future performance, as the firm leverages its expertise to drive value creation. The transaction aligns with Starboard Value's investment philosophy of identifying and capitalizing on undervalued assets, potentially enhancing the firm's overall portfolio performance.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
