Despite the worst bear market since the 1930s, activist investors such as Warren Buffett , Bill Ackman of Pershing Square Capital Management and Carl Icahn by all accounts are still finding attractive valuations on both the long and short sides of the equity market.
Here at Stockpickr.com we track many of the latest activist filings for investors interested in piggybacking of these activist investors. We highlight a few of the latest situations here.
Microsoft co-founder Bill Gates’ personal investment entity, Cascade Investments , bought an additional 4.25 million shares of Republic Services (RSG), increasing the firm's holdings to 51.99 million shares, or 13.7% of shares outstanding for Republic Services.
Republic Services recently finished its merger with Allied Waste, creating the second-largest domestic waste-collection service, which operates with almost 40,000 employees and serves 40 domestic states and Puerto Rico.
For full-year 2009, Republic now expects earnings of $1.70 per share to $1.75 per share, which is slightly below Wall Street’s estimates for $1.93 per share for full-year 2009. Interestingly enough, Republic is forecasting full-year 2009 net revenue of $8.5 billion dollars, which represents a 129% increase from its 2008 net revenue of just $3.7 billion.
The merger between Republic Services and Allied Waste is expected to create at least $150 million in synergistic cost savings for the newly combined company, with EBITDA as a percent of revenue of 350 basis points higher to 28.1% for the combined corporation.
With shares of Republic Services sitting right on their 52-week low, Bill Gates used the opportunity to pick up additional shares of America’s second-largest waste-removal company.
On Thursday morning, Republic Services was trading down 47 cents, or 2.52%, at $18.17.
Cascade Investments largest equity positions include Canadian National Railway (CNI), Fomento Economico (FMX) and Otter Tail (OTTR).
On Feb. 23, Carl Icahn announced that he might add nominees to Lions Gate Entertainment (LGF) at the next annual meeting or at a special meeting that he might call for.
Lions Gate’s principal source of revenue comes from the firm's leaseback sales from its proprietary film library of more than 12,000 titles. Revenue for 2008 was $1.6 billion, with gross margins of 13.4% across all brands. According to Nielsen and Rentrak, Lions Gate’s DVD market share has grown from 4.9% in 2005 to 6.7% in 2008, as DVD revenue went from $516 million for full-year 2007 to $618 million for full-year 2008.
Icahn through his various affiliates own approxamentaly16.5% of Lions Gate Entertainment. His largest equity positions include Yahoo! (YHOO), Biogen Idec (BIIB) and Motorola (MOT).
In Thursday morning trading, Lions Gate was trading up 2 cents at $5.06.
Last week, Ditech Networks (DITC), a telecommunications firm focused on improving the quality of wireless voice conversations, rejected an unsolicited, nonbinding proposal from Lamassu Holdings to be acquired for $1.25 per share. In Wednesday morning trading, Ditech was trading at $1.07.
According to the board of directors for Ditech Networks, “the offer isn't in the best interests of its shareholders since it doesn't reflect the current value of assets or the potential of initiatives Ditech plans.”
For the third quarter of 2009, which ended Jan. 31, Ditech's revenue was $4.9 million, a decrease of $1.8 million, or 27%, from revenues of $6.7 million in the same quarter of the prior fiscal year.
Shares of Ditech Networks are down 85% over the past two years vs. a decline in the S&P 500 of 40%.
In Thursday morning trading, Ditech was about flat.
Private investor Eduardo Baviera Sabater announced his intention to purchase up to 10% of LCA-Vision (LCAV) stock. LCA-Vision is a leading provider of laser vision correction services under the LasikPlus brand, having preformed more than a million laser vision correction procedures since 1991.
LCA-Vision has a market capitalization of about $52.9 million, with $56.3 million in cash and $21 million in debt, equating to an enterprise value of just $15.8 million.
Finally, in mid-January, one of LCA-Vision’s fiercest competitors, Advanced Medical Optics (EYE), was bought out by Abbott Laboratories (ABT) for a 144% premium to Advanced Medical Optics' previous closing price.
On Thursday morning, LCA-Vision was up 6 cents, or 2.1%, to $2.86.
For more activist investing news, including Biovail (BVF), APAC Customer Services (APAC) and Bio-Imaging Technologies (BITI), visit the Latest Activist Filings portfolio on Stockpickr.
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