Activist investor Politan Capital Management said it owns a nearly 9% stake in Masimo Corp and plans to push the medical device maker to make changes, sending the company’s share price up 6%.
Politan, founded by veteran investor Quentin Koffey, said in a regulatory filing it believes the company’s stock price is undervalued. It added that it plans to speak with management and the five member board about the company’s business, operations and the possibilities of changes to the executive suite and board.
It did not give details of specific changes it may push for to make Masimo more profitable.
The hedge fund owns 8.4% in common stock and 0.4% in swaps, making for a position valued at roughly $750 million. Masimo, which makes equipment including a pulse oximeter, has a market capitalization of roughly $8.4 billion.
Politan’s investment comes on the heels of Masimo’s acquisition of audio products maker Sound United LLC for $1 billion, announced in February. The acquisition was poorly received by investors who sent shares tumbling 37%, wiping away some $5 billion in market value. On Tuesday, they climbed 6% to close at $169.38.
Masimo did not respond to a request for comment. A representative for Politan declined to comment.
Koffey previously worked at Senator Investment Group and D.E. Shaw & Co and is known for his investments in Lowe’s, CoreLogic and a campaign he ran at managed-care company Centene which was conducted out of the limelight and resulted in new directors joining the board.
His firm, founded last year, now oversees roughly $2 billion and the capital is expected to be locked up in investments including Centene and Masimo for three years, filings show.
