In a recent publication, we explored Jeff Smiths Top 10 Activist Targets, focusing on their performance compared to the S&P 500. This article will delve into the standing of News Corporation (NASDAQ:NWS) in relation to Smiths other top activist targets, offering insights into the strategies employed by one of the most formidable figures in corporate America.

Jeff Smith has earned the moniker of the most feared man in corporate America, largely due to his track record of conducting some of Wall Streets most aggressive and effective activist campaigns. With a wealth of experience that includes serving on the boards of more than 17 companies and chairing four, Smiths reputation as a successful activist investor is well-established. His influence is primarily attributed to Starboard Value LP, the hedge fund he co-founded in 2011 with two partners, which has become synonymous with targeted efforts to unlock shareholder value. The firms strategy involves rigorous analysis to identify stocks trading below their intrinsic value, thereby positioning itself for potential growth.

Starboard Value LP has consistently engaged in activist campaigns aimed at implementing strategic changes that can enhance company value. This frequently involves advocating for board seats or pushing for management reshuffles. In some cases, the hedge fund has even called for the sale of specific business units or the entire company to maximize shareholder returns. Over the past decade, Smith has notably focused on technology giants and consumer cyclical stocks, leading to a significant increase in the hedge fund's assets under management, which have more than doubled to over $5.5 billion. Furthermore, the average market capitalization of the companies Starboard Value LP has invested in has surged from approximately $7 billion in 2020 to over $45 billion, marking a significant shift in their investment strategy.

As Starboard Value LP has cultivated a reputation for holding executives and directors accountable, it has not shied away from creating challenges for those resistant to its proposals, sometimes resulting in the dismissal of executives. However, Jeff Smith's approach diverges from that of more confrontational activists like Carl Icahn and Bill Ackman. For instance, during his time as chair of Darden Restaurants, he actively participated in hands-on learning by working shifts at the company, which included mastering the art of pizza-making at Papa John'sanother enterprise he chaired before initiating his activist campaign there.

Despite these efforts and strategies, Starboard Value LP reported a disappointing return of less than 5% for investors in 2024, significantly lagging behind its peers. This underperformance occurred during a tumultuous year for corporate Americas boardrooms, where activist investors were more vocal and assertive than ever before. In stark contrast, the average return for activist funds in 2024 was a robust 11.5%. Competitors like ValueAct Capital Management achieved a remarkable 21% return, while Sachem Head Capital Management reported an impressive 22% increase, capitalizing on market trends influenced by the surge in artificial intelligence.

This analysis sheds light on the complexities of activist investing and the varying degrees of success experienced by different hedge funds. As the landscape continues to evolve, it will be interesting to observe how Jeff Smith and Starboard Value LP adapt their strategies in response to the shifting dynamics of the market.