The money manager bet nearly $200 million on Macy’s stock. What do long-term investors need to know?
London-based RWC Asset Management disclosed the acquisition. Macy’s (middle +3.39%) Monday’s filing with the SEC adds 255,473 shares worth about $3.6 million.
what’s going on
RWC Asset Management increased its presence at Macy’s during the third quarter, according to a Securities and Exchange Commission filing released Monday. The fund purchased an additional 255,473 shares, bringing its total holdings to 10.9 million shares. The estimated value of the transaction, based on the average closing price for the quarter, was $3.6 million.
What else you need to know
The purchase brings Macy’s stake to 9.5% of reportable U.S. equity assets managed by RWC Asset Management.
Top 5 holdings since submission:
- NYSE:M: $195.5 million (9.45% of AUM)
- NASDAQ:EXC: $172.9 million (8.8% of AUM)
- NYSE:HPQ: $159.9 million (8.1% of AUM)
- NYSE:NEE: $68.5 million (3.5% of AUM)
- NYSE:D: $65.2 million (3.3% of AUM)
As of Monday, Macy’s shares had risen 26% over the past year to $19.38, well outpacing the S&P 500’s 18% gain over the same period.
Company Overview
| metric system | value |
|---|---|
| Revenue (TTM) | $22.7 billion |
| Net Profit (TTM) | $540 million |
| dividend yield | 3.9% |
| Price (as of Monday) | $19.38 |
Company status
- Macy’s offers a wide range of products, including clothing, accessories, cosmetics, home furnishings, and beauty products, through multiple retail brands and digital platforms.
- Hypermarkets operate an omni-channel retail model and generate profits through in-store and online sales based on their portfolio of department stores and specialty stores.
- We target a broad consumer base that includes key customers including men, women and children seeking branded and private label products in the United States and select international markets.
Macy’s is America’s leading department store operator with a national presence and a diverse portfolio of brands. The company leverages both physical locations and digital channels to drive sales and customer engagement.
absurdity
RWC Asset Management’s expansion of its stake in Macy’s represents confidence in the department store’s turnaround strategy amid better-than-expected performance and improved guidance. The London-based company’s roughly $3.6 million purchase brings its total holdings to 10.9 million shares, worth $195.5 million, making Macy’s the largest U.S. stock, followed by Exelon and HP Inc.
The timing of the purchases coincided with Macy’s second-quarter results, which showed its highest sales growth in 12 quarters and prompted the retailer to raise its full-year sales and profit outlook. Gains were led by Reimagine 125 stores, Bloomingdale’s and Bluemercury. The company also returned $100 million to shareholders through dividends and share buybacks.
For long-term investors, RWC’s move is contrarian, but it also highlights the growing relevance of value-driven retail. Macy’s balance sheet has strengthened. Long-term debt has been reduced by about $340 million and inventory remains tight. While retail volatility persists (after all, Macy’s is still down more than 70% from its 2015 peak), tight cost management and execution are positioning Macy’s as a potentially more resilient player in the sector’s continued recovery.
vocabulary
Assets under management (AUM): The total market value of assets that a fund or investment manager oversees on behalf of its clients.
Omnichannel: A retail strategy that integrates offline stores and digital platforms to provide a seamless customer experience.
Dividend Yield: Divide the annual dividend by the current price of the stock, expressed as a percentage.
Portfolio: It is a collection of investments held by individuals or institutions.
pile: The amount of ownership or shares an investor or fund holds in a company.
1/4: A three-month period used by companies for financial reporting and performance measurement.
Outstanding performance: Achieving better returns than a specific benchmark or index over a specific period of time.
TTM: The 12-month period ending with the most recent quarterly report.
filing: A formal document submitted to regulatory authorities, often containing financial or operational information.
possession: A security or asset owned by an investor or fund.
