Select Comfort attracts big investor

  • Article by: DAVID PHELPS , Star Tribune
  • Updated: May 7, 2012 - 9:06 PM

Steven Cohen's SAC Capital Advisors now has 5 percent of Plymouth mattress maker.

Steven Cohen

SAC Capital Advisors has quietly become one of the largest shareholders of Select Comfort Corp., the Plymouth-based specialty mattress manufacturer that has rebounded despite the slow economic recovery.

According to Securities and Exchange Commission documents, SAC, its affiliates and its manager, Steven Cohen, collectively hold 2.8 million shares or 5 percent of the company stock. SAC purchased the stock at an average price of $29 per share. For several months during the depths of the recession in late 2008 and early 2009, Select's shares traded at less than $1.

Select Comfort's stock dropped 4.7 percent Monday to $28.29 a share on a day when several bedding company stocks took a hit over concerns about deep discounting on mattress products.

Jonathan Gasthalter, a spokesman for the Stamford, Conn.-based hedge fund, offered no comment "beyond the filing."

Before the April 30 SEC filing, SAC held fewer than 200,000 shares of Select Comfort stock.

Select Comfort, whose signature product is the Sleep Number adjustable mattress, did not respond Monday to requests for comment on the SAC investment.

In the past year, Select Comfort has seen its stock climb from $5 a share in 2010, when the economy started to recover and consumers began buying mattresses again, to the neighborhood of $30 a share. One analyst, Joan Storms of Wedbush Securities, has a buy recommendation on the stock with a target price 12 months from now of $39 a share.

First-quarter financial results for Select Comfort included a 36 percent gain in sales over the same quarter a year ago. For the full 2011 year, earnings were $60.5 million, up from $31.6 million a year earlier.

In a call with Wall Street analysts last month, Shelly Ibach, chief operating officer and incoming CEO, said the company is "confident in our ability to continue generating earnings-per-share growth of at least 20 percent per year for the foreseeable future."

SAC Capital Advisors is a $13 billion hedge fund that invests in technology and industrial stocks as well as consumer goods, according to Internet websites, including hedgetracker.com. Cohen's personal net worth is reportedly $8 billion. SAC and related funds consistently earn returns of 30 percent a year.

David Phelps • 612-673-7269

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