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This Week's Activist Filings
With regards to investor activism, this week's fillings are anything but boring, especially when the name of one of the world's richest men is on the list.
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Turning Garbage Into Green
The big "quiet" news this week is that Cascade Investments in conjunction with the Bill and Melinda Gates Foundation Trust has been approved to acquire 25% of waste management company Republic Services Group (NYSE:RSG). Cascade is the private investment arm of Microsoft founder Bill Gates. Cascade already owns nearly 15% of Republic, the second largest waste management company after Waste Management (NYSE:WM). No reasons were given for Cascade's desire in obtaining such a big stake in the firm. Cascade did agree that it would not acquire more than 25% of the company or solicit proxies until 2013. Cascade is not an activist fund and its likely the stake is simply a bet on a quality company performing well over the years. In addition to Cascade, Bill's pal Warren Buffett owns shares of Republic via Berkshire Hathaway (NYSE:BRK.B). (For more, see Finding Gold In Garbage.)
A Dot Com Bet
Discovery Equity Partners increased its position in Drugstore.com (Nasdaq:DSCM) by over 10%. In the last couple of weeks, Discovery bought over 800,000 shares at $1.58 - $1.69 each and now owns 8.7 million shares or 8.3% of the company. As the name implies, drugstore.com operates as an online provider of health, beauty, vision, and pharmacy products. In addition, the company has strategic agreements with Medco Health Solutions, Rite Aid Corporation, General Nutrition Corporation and Amazon.com (Nasdaq:AMZN). It is this relationship with Amazon.com that could be the most valuable.
With a market cap of $182 million, drugstore.com would make an easy acquisition target for Amazon. Amazon is known for eliminating its competition by buying them out. Last week, the company agreed to buy privately held Quidsi, which operates diapers.com, for nearly $600 million. Drugstore.com has no net debt and revenues of nearly $500 million. If Amazon operating structure can yield a decent profit rate from those sales, a buyout would not be that unlikely.
Stay Tuned
As always, 13D Filings are a great regular read for investment ideas or perspective. Stay tuned for next week's batch. (For more, see Digging In To 13D Disclosures.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: 9 Simple Investing Ratios You Need To Know
Turning Garbage Into Green
The big "quiet" news this week is that Cascade Investments in conjunction with the Bill and Melinda Gates Foundation Trust has been approved to acquire 25% of waste management company Republic Services Group (NYSE:RSG). Cascade is the private investment arm of Microsoft founder Bill Gates. Cascade already owns nearly 15% of Republic, the second largest waste management company after Waste Management (NYSE:WM). No reasons were given for Cascade's desire in obtaining such a big stake in the firm. Cascade did agree that it would not acquire more than 25% of the company or solicit proxies until 2013. Cascade is not an activist fund and its likely the stake is simply a bet on a quality company performing well over the years. In addition to Cascade, Bill's pal Warren Buffett owns shares of Republic via Berkshire Hathaway (NYSE:BRK.B). (For more, see Finding Gold In Garbage.)
Discovery Equity Partners increased its position in Drugstore.com (Nasdaq:DSCM) by over 10%. In the last couple of weeks, Discovery bought over 800,000 shares at $1.58 - $1.69 each and now owns 8.7 million shares or 8.3% of the company. As the name implies, drugstore.com operates as an online provider of health, beauty, vision, and pharmacy products. In addition, the company has strategic agreements with Medco Health Solutions, Rite Aid Corporation, General Nutrition Corporation and Amazon.com (Nasdaq:AMZN). It is this relationship with Amazon.com that could be the most valuable.
With a market cap of $182 million, drugstore.com would make an easy acquisition target for Amazon. Amazon is known for eliminating its competition by buying them out. Last week, the company agreed to buy privately held Quidsi, which operates diapers.com, for nearly $600 million. Drugstore.com has no net debt and revenues of nearly $500 million. If Amazon operating structure can yield a decent profit rate from those sales, a buyout would not be that unlikely.
Stay Tuned
As always, 13D Filings are a great regular read for investment ideas or perspective. Stay tuned for next week's batch. (For more, see Digging In To 13D Disclosures.)
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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