connoisseur of the untold stories on wall street, skewed toward activism

Marcato Capital Wants A Seat At NCR’s Table

Added on by Gordon Gekko .

Marcato Capital capital owns 6.5% of NCR Corp. (NCR). And it wants its founder Mick McGuire nominated to serve as a director on the board. It got that a few days later when the company missed 3Q earnings and the company conceded.

Shares are down 20% year-to-date. Trading at $27 a share, NCR is trading below Marcato’s $28.41 cost basis.

What’s NCR do? “NCR Corporation (NCR) is a technology company, which provides products and services, which enable businesses to connect, interact and transact with their customers and enhance their customer relationships by addressing consumer demand for convenience, value and individual service.”

Ackman Owns Air Products, Now We Do

Added on by Gordon Gekko .

There's still the worry that valuation has gotten ahead of itself. Air Products (APD) trades at 12.7x forward ev/ebitda, compared to PX's 11.5x multiple and ARG at 10.5x. So, the valuation does look relatively expensive. But the market appears to be looking out toward what APD could do in the future. It also is getting a superior valuation given Ackman's backing.

Ultimately, we think that the most profitable move for APD will be to sell off non-core businesses. That'll allow APD to focus on its most profitable businesses, while using its cash to pay down its $6bn debt load or boost its 2.4% dividend yield. Ackman worked a turnaround in Canadian Pacific that took some three years. He's been pushing for change at APD for just over a year. We think it's finally time to buy APD, given its new CEO and the openness to dumping non-core, underperforming segments.

Read more here

CME Group As A Play On Rising Rates

Added on by Gordon Gekko .

"The financials we have added over this year should benefit from rising short-term rates. CME Group (CME), a financial exchange where the majority of options and futures on interest rates are traded, has suffered the most of any high-quality business due to exceedingly low short-term interest rates.

So much of their volume is based on others buying protection from sudden changes in interest rates. And if the Fed is keeping interest rates at an artificially low level, then CME is hurt by that. So as the Fed ends its bond buying, some volatility will return to the market. That should boost CME’s volume considerably."


Loeb Says Goodbye To Sony, Hello Amgen And 70% Upside

Added on by Gordon Gekko .

Per Dan Loeb and his Third Point hedge fund's 3Q letter, he closed out his Sony (SNE) position, which was disheartening for us (SNE is undervalued, but the company is stubborn and needs a catalyst), but Loeb is taking on a new company, Amgen (AMGN)

Shares are already up 29% YTD, but Loeb believes the fair value is $249 -- which is 70% higher than where it currently trades. Loeb pitched AMGN at the Robin Hood conference and owns 450,000 shares (or less than 1%). 

In his letter, Loeb calls AMGN a hidden value play. He commends AMGN's new products and the under appreciation of them. Loeb also calls for AMGN to split into two companies.  

What's AMGN do? "Amgen Inc. is a global biotechnology pioneer that discovers, develops, manufactures and delivers human therapeutics. Its medicines help millions of patients in the fight against cancer, kidney disease, rheumatoid arthritis (RA), bone disease, and other serious illnesses."

Hey Agrium, Is ValueAct Better Than Jana Partners?

Added on by Gordon Gekko .

Agrium (AGU) managed to fight off Jana Partners in 2012 and 2013. At the time, Jana wanted, 

Jana feels that Agrium is failing to properly manage working capital in the retail segment, which has in excess of $700 million in working capital. Agrium tried to ward Jana off with a dividend and Dutch auction tender, but Rosenstein believes there is more value within the company. Rosenstein has stated that he believes, with the necessary steps, the company could generate an additional $50 per share of value, which would be a 50% upside from the current share price. 

Shares are below the $100/share it traded at when Jana owned them and are up just 1% YTD. But that hasn't stopped ValueAct Capital (whom also has a campaign at 21st Century Fox) from taking a 5.7% stake in AGU. It'll be interesting to se what ValueAct pushes for. 

What's AGU do? "Agrium Inc. (Agrium) is a global producer and marketer of nutrients for agricultural and industrial markets.