Every now and then we put together a list of stocks that might see an activist intervention, or in the least, need an activist. This goes hand-in-hand with the weekly precog piece we put out that highlights a stock that need an activist investor.
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Our latest list works out to 10 names. At one point, we had it to 17 names. With that, below is the names that didn’t make the final cut.
As a quick preface, one of the easiest ways to find activist targets is underperforming companies multiple business lines (we did a special on that some months ago). All the 17 names have underperforming margins, underleveraged balance sheets or multiple businesses that could be separated.
Names that didn’t make the cut:
Retail is just too tough -
1. Pier 1 Imports - easy catalyst is a merger with another homegoods player
2. The Gap (on our catalyst list) - ValueAct Capital has a connection to the company
3. Urban Outfitters - similar story as Pier 1; plus, too much going on with the store - needs a refocus
4. Zumiez - past West Coast clothing store campaigns not worked out well; only handful of potential activists
5. Lumber Liquidators - still in the retail realm; best case is that an activist forces it into the arms of Home Depot
Major activists already have their hands full -
6. IBM - just too big for most funds. With many of the major players, Icahn - Ackman - ValueAct, already filling their portfolios with new stakes, this is on the backburner.
7. TravelZoo - already has an activist of sorts; tough to see major catalyst
I will say that industrial goods and technology are where we’re seeing the most obvious opportunities. Presented, without comment, here’s 10 stocks that could face activist pressure. We’ll cover most in the coming weeks with precogs, etc.
If you want to get our thoughts on the full list, feel free to sign up for Activist Strategy or in the least get on the one-week free trial.