Fortrea (NASDAQ:FTRE), a recent CRO spinoff of Labcorp (NYSE:LH), gained over 3% in pre-open trading Tuesday after the Wall Street Journal reported that activist hedge fund Starboard Value has built a greater than 5% stake in the company.
Starboard's CEO is expected to speak at the 13D Monitor investor conference later today, and will likely discuss the new Fortrea position along with a new reported position in News Corp (NASDAQ:NWSA).
The activist is said to be planning to push for changes that could boost margins as well as other actions to lift the share price. The hedge fund contends that Fortrea's operational efficiency suffered when it was a smaller division within Labcorp, and the company incurred additional expenses following the spinoff.
Shares of Fortrea are down about 10% since the spinoff was completed in early July.
Starboard is no stranger to the CRO industry. In May 2017, the hedge fund disclosed a nearly 6% in Parexel International - one month before it agreed to be acquired by a private equity firm.