Why Fortrea Holdings Shares Are Gaining Today

Activist hedge fund Starboard Value holds a stake of around 8.7% in contract-research organization Fortrea Holdings Inc. FTRE, according to an exchange filing.

The activist investor plans to push for changes that could boost margins among other initiatives aimed at share-price appreciation, the Wall Street Journal reported, citing people familiar with the matter. 

Starboard sees Fortrea as a robust and diverse worldwide contract research organization serving pharmaceutical, biotech, and medical device firms with drug-trial and research management services, according to the report.

Starboard anticipates a mid-to-high single-digit expansion in the contract research organization sector, fueled by heightened research and development investments by biotech firms, as stated in the report.

Fortrea completed its spinoff from MedTech giant Laboratory Corporation Of America Holdings LH in July. 

Starboard's perspective is that Fortrea, under Labcorp, did not operate optimally due to its smaller scale, and the company was hit with "extra costs" after the spinoff.

Jeff Smith, the founder and Chief Executive of Starboard, is scheduled to speak at the 13D Monitor Active-Passive Investor Summit, an activist investing conference. During his appearance, he is expected to provide a comprehensive overview of the fund's investment thesis, the report added.

The disclosure of Starboard's stake in Fortrea is anticipated to be made through a securities filing today.

Price Action: FTRE shares traded higher by 3.29% to $31.10 in premarket on the last check Tuesday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.