"Effective Activism, on the Cheap" Identifies Undervalued Companies with Significant Upside Potential
|October 11th, 2010||
|Contributed by: Michael R. Levin, The Activist Investor|
|The Activist Investor (TAI), specializing in advising investors in using shareholder activism for turnaround of underperforming companies, this week released "Effective Activism, on the Cheap," which identifies three dozen undervalued companies where shareholder activism can work well at a low cost. The research paper by TAI founder Michael Levin highlights how investors can undertake activist strategies and tactics more effectively and less expensively, through concentrated and creative collaboration with other investors.|
The 36 companies span a range of industries, including consumer goods, healthcare, manufacturing and basic materials, with interesting attributes:
• The companies conceal significant potential value relative to their current market cap, with a potential to increase the average investment by about 75%, based on the relationship of market cap to current net worth and book value, and current free cash flow
• They have a concentrated investor base (ten largest investors own at least half of the outstanding shares), which allows an activist to influence management in creative ways
• They are not simply micro- or small-cap investments, with an average market cap of $375 million (the highest at $1.8 billion), providing ample liquidity.
"This research responds to a significant obstacle to activist investing, its expense," said TAI's Levin. "The analysis suggests that selecting companies based on concentrated ownership can deliver meaningful returns at a reasonable cost."
For a copy of the paper, please contact Michael Levin at firstname.lastname@example.org or 847.830.1479.