Billionaire investor Carl Icahn has taken a major stake in Monro Muffler (MNRO), which is an auto service company. According to a new regulatory filing, Icahn now owns nearly 4.44 million shares, giving him a 14.8% ownership stake. This makes him the company’s largest individual shareholder, surpassing BlackRock Fund Advisors, which held 14.11% as of the latest filing. The shares were bought through Icahn’s investment firms, but it’s unclear whether he plans to influence the company’s direction.
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After the news broke, Monro’s stock price surged over 18% in Wednesday afternoon trading. The Wall Street Journal was the first to report on the move. Interestingly, this isn’t Icahn’s first move into the auto sector, as he previously owned Icahn Automotive before selling it last year during a major restructuring of his investments. Indeed, his firm, Icahn Enterprises (IEP), was targeted by short-seller Hindenburg Research, which caused shares to sink and impact Icahn’s personal loans.
Nonetheless, before Icahn’s involvement in Monro became public, its stock had dropped by more than 40% this year. In fact, the company has been struggling with falling same-store sales and increasing labor costs. Moreover, Icahn’s new position adds Monro to a long list of companies where he’s taken large stakes, often with the goal of pushing for changes and improving performance. Therefore, investors may now be watching to see if he takes a more active role here as well.
Is MNRO Stock a Good Buy?
Turning to Wall Street, only one analyst, David Lantz, has issued a rating on Monro Muffler stock during the past three months, which was a Hold with a $16 price target. This suggests a downside risk of 11.4% from current levels.
