Starboard Value's Jeff Smith on Tuesday presented his newest investment ideas across different industries.
Speaking at the 13D Monitor Active-Passive Investor Summit in New York City, the activist investor first touted web services company GoDaddy, the biggest holding in his portfolio as of the end of June.
Smith said GoDaddy should target a growth-profitability combination of 40% coming out of 2024. If the firm can achieve this goal, it will generate at least $10 in free cash flows per share in fiscal 2025, Smith said.
"If management can successfully execute on a margin improvement plan, we believe GoDaddy shareholders will be meaningfully rewarded," he said.
GoDaddy shares are up only about 1% this year, significantly underperforming the broader market.
Smith's following idea was media conglomerate News Corp, which he said owns a "highly valuable" collection of assets including Dow Jones, book publishing, subscription video services and other news media.
The hedge fund manager also highlighted Australian real estate company REA Group, which News Corp invested in.
"Realestate.com.au is the No. 1 property destination in Australia with more than three times the audience of the nearest competitor," he said. "The business last year generated almost $1 billion in revenue."
He said if the company separates the digital real estate assets through a tax-free spinoff, News Corp shareholders will see "significant appreciation" in the company's share price.
Lastly, Smith talked about drug trial contract research company Fortrea, which he just took a stake in. The investor said the company is trading at a discount to peers.
"An improving margin will lead to significant share price appreciation at Fortrea," he said. "If the company is able to reach pure margin levels, which we believe is achievable, then the stock has the potential [to] more than double from here."
Shares of Fortrea jumped about 3% Tuesday.
