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This Week's Activist Filings
With the year-end holiday season approaching, this week's batch of 13D filings was rather benign.
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Keeping Things Fair
The one activist filing to come out of the week was relating to amusement park operator Cedar Fair (NYSE:FUN). Billionaire private investor Geoffrey Raynor is pushing efforts to ensure that the company runs an orderly shareholder meeting. In addition, he is looking for other changes including an independent Chairman and a focus on paying distributions to shareholders. Mr. Raynor's investment in Cedar Fair represents over 18% of the company's outstanding shares. Structured as an L.P, Cedar Fair pays out $0.25 a unit per quarter in distributions but that was suspended. At the current price, this would represent a 6.8% yield. Considering shares trade near a 52-week high and Mr. Raynor has been invested since the beginning of this year, we may be in the final stages of his activist efforts.
Buying More
Carl Icahn's group Icahn Associates was buying more shares in natural foods distributor Hain Celestial Group (Nasdaq:HAIN). The group now owns over 15% of the company. Shares in Hain trade at a 52-week high of $28 or 40 times this year's earnings. It's hard to determine what Icahn's plans are if any at this moment especially when the stock price is behaving to his liking.
Hain's main rival is United Natural Foods (Nasdaq:UNFI), the largest distributor of natural and organic foods. While UNFI's market cap of $1.6 billion edges out HAIN, United pulls in nearly $4 billion in annual revenues while Hain's top line is $1 billion. UNFI trades at 28 times earnings - not cheap by any stretch but more attractive than Hain. From a numbers perspective, UNFI looks cheaper. (For more, see Can You Invest LIke Carl Icahn?)
Letting Some Go
This week's notable 13D filings actually revealed more filings indicating a decrease in position size. Neuberger Berman Mgmt unloaded over half of its position in biotech company Charles River Labs (NYSE:CRL). The firm now owns less than 3% of the company's stock. Paulson and Company, the hedge fund famously known for its multi-billion dollar profit betting against subprime mortgages, is trimming its stake in Cheniere Energy (NYSE:LNG). With a market cap of $300 million, Paulson's remaining 4.9% stake likely represents a relatively small position for this billion dollar fund. (For more, see Digging Into 13D Disclosures.)
The Bottom Line
With stocks continuing to enjoy a year end December rally, it will be interesting to see how active investors remain for the final weeks of the year. As the holidays approach, trading will also likely lighten up. As such, I wouldn't read too much into any filings unless they come with a specific message to management. (For more, see What is the significance of a Schedule 13D?)
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IN PICTURES: 9 Simple Investing Ratios You Need To Know
Keeping Things Fair
The one activist filing to come out of the week was relating to amusement park operator Cedar Fair (NYSE:FUN). Billionaire private investor Geoffrey Raynor is pushing efforts to ensure that the company runs an orderly shareholder meeting. In addition, he is looking for other changes including an independent Chairman and a focus on paying distributions to shareholders. Mr. Raynor's investment in Cedar Fair represents over 18% of the company's outstanding shares. Structured as an L.P, Cedar Fair pays out $0.25 a unit per quarter in distributions but that was suspended. At the current price, this would represent a 6.8% yield. Considering shares trade near a 52-week high and Mr. Raynor has been invested since the beginning of this year, we may be in the final stages of his activist efforts.
Buying More
Carl Icahn's group Icahn Associates was buying more shares in natural foods distributor Hain Celestial Group (Nasdaq:HAIN). The group now owns over 15% of the company. Shares in Hain trade at a 52-week high of $28 or 40 times this year's earnings. It's hard to determine what Icahn's plans are if any at this moment especially when the stock price is behaving to his liking.
Letting Some Go
This week's notable 13D filings actually revealed more filings indicating a decrease in position size. Neuberger Berman Mgmt unloaded over half of its position in biotech company Charles River Labs (NYSE:CRL). The firm now owns less than 3% of the company's stock. Paulson and Company, the hedge fund famously known for its multi-billion dollar profit betting against subprime mortgages, is trimming its stake in Cheniere Energy (NYSE:LNG). With a market cap of $300 million, Paulson's remaining 4.9% stake likely represents a relatively small position for this billion dollar fund. (For more, see Digging Into 13D Disclosures.)
The Bottom Line
With stocks continuing to enjoy a year end December rally, it will be interesting to see how active investors remain for the final weeks of the year. As the holidays approach, trading will also likely lighten up. As such, I wouldn't read too much into any filings unless they come with a specific message to management. (For more, see What is the significance of a Schedule 13D?)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Sham Gad
Sham Gad is the Managing Partner of Gad Partners Fund's, value inspired investment partnerships modeled after the Buffett Partnerships of the 1950's. Previously, Gad ran the Gad Investment Group and delivered annualized returns of 22% from 2002 to 2005. Gad is also the author of "The Business of Value Investing" which will be out in the fall of 2009. Gad earned his MBA at the University of Georgia in May of 2007. Gad runs a value investing blog. He can also be reached by visiting the Gad Partners Funds site. When not writing or analyzing businesses, Gad enjoys hanging out with his wife Maggie, reading, golf, and yoga
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