Starboard Value CEO Jeffrey Smith announced Tuesday that the firm has a stake in automobile auction house KAR Auction Services.
Smith unveiled the new investment from 13D Monitor’s 2019 Active-Passive Investor Summit in New York. Shares of KAR rose more than 5% in premarket trading following the latest reveal from the Starboard chief.
Smith said that despite KAR’s similar business model to used car dealers company, Copart, profit margins between the two companies remain widely different.
The longtime activist investor also recommended medical record company Cerner, a company at which Starboard reached a settlement last week.
Activist investors often build investments what they view as undervalued companies with the goal of advocating for key changes they suspect will drive shareholder value. Those proposed changes can differ depending on the activist and targeted company, ranging from management replacement and board seats to merger proposals.
This story is developing. Please check back for updates. Smith will join CNBC’s David Faber for a live interview at 10:10 a.m. ET.