The most recent batch of activist filings is anything but boring. Investors frustrated at the lack of opportunities available in today's turbulent markets may want to take a close look, as one big-name company is under target by one big-name businessman.

Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.

Don't Mess With Bill Gates
Of all the names one would consider never to see among activist investors, Microsoft co-founder Bill Gates is one of them. But Gates's investment vehicle Cascade Investments was front and center this past week on the activist front. Cascade now owns nearly 6% of agricultural machinery giant Deere (NYSE:DE) after buying over 7.5 million shares over the past few months, bringing its total holding to 24.5 million shares. Cascade plans to "engage in discussions with Deere" about the company's business strategy. Deere shares have pulled back along with the market and currently trade for $80 or 13 times earnings. Earlier this year, shares reached a 52-week high of $99.80.

Cascade also announced that it now controls over 10%, or 25 million shares, of Ecolab (NYSE:ECL) after having bought another 2.5 million shares last week. Ecolab is a leading provider of cleaning and other products for the hospitality, food service, and healthcare industries. Last week, the company announced that it would be increasing its share buyback program by adding an extra 10 million shares to the buyback authorization. This brings the total buyback authorization to 28 million shares, or over 10% of the shares outstanding.

Unlocking Value
Hedge fund Stadium Capital Management disclosed it is seeking a seat on the board of sporting goods retailer Big 5 Sporting Goods (Nasdaq:BGFV). Stadium owns 15.3% of the outstanding shares. Shares in BGFV are currently trading for $7.50, near the 52-week low of $6.26, or 10 times earnings. Shares currently yield 4%.

JMP Asset Management owns 1,575,000 shares or 8.3% of traffic news provider Global Traffic Network (Nasdaq:GNET). GNET is currently subject to a $14-per-share tender offer. JMP says the offer significantly undervalues the company. On paper, GNET shares trade for 30 times earnings. JPM has not indicated what type of action, if any, it will pursue.

Stocks for Thought
There's never any certainty what degree of value, if any, will be unlocked by activist investors. But with quality names like Deere and seemingly cheap retailers like Big 5 Sporting Goods on the list, some value-creating potential could be lurking in the future. (For additional reading, see Activist Hedge Funds: Follow The Trail To Profit.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  2. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  3. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  4. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  6. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  7. Professionals

    What to do During a Market Correction

    The market has corrected...now what? Here's what you should consider rather than panicking.
  8. Mutual Funds & ETFs

    ETF Analysis: Vanguard Mid-Cap Value

    Take an in-depth look at the Vanguard Mid-Cap Value ETF, one of the largest and most popular mid-cap funds in the U.S. equity space.
  9. Mutual Funds & ETFs

    ETF Analysis: Schwab US Broad Market

    Take an in-depth look at the Schwab U.S. Broad Market ETF, an incredibly low-cost fund based on a wide selection of the U.S. equity market.
  10. Professionals

    Tips for Helping Clients Though Market Corrections

    When the stock market sees a steep drop, clients are bound to get anxious. Here are some tips for talking them off the ledge.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  3. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  4. PT (Perseroan Terbatas)

    An acronym for Perseroan Terbatas, which is Limited Liability ...
  5. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that ...
  6. BHD (Berhad)

    The suffix Bhd. is an abbreviation of a Malay word "berhad," ...
RELATED FAQS
  1. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  4. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  5. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
  6. What happens to the shares of stock purchased in a tender offer?

    The shares of stock purchased in a tender offer become the property of the purchaser. From that point forward, the purchaser, ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!