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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc.

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Nov 12 3:59 PM EST

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From: BeenRetired	9/6/2019 7:27:41 AM
	1 Recommendation of 4827

Activist threat: Why these five companies could come under attack Published: Aug 23, 2019 9:15 a.m. ET CallumKeown Reporter Data storage giant Western Digital, private-label food producer TreeHouse Foods, and tire manufacturer Goodyear are all vulnerable to an attack from activist investors, according to shareholder-activism intelligence firm Activist Insight. Aluminum producer and mining heavyweight Alcoa and boat group Brunswick could also be exposed to an activist campaign, the second part of a report for MarketWatch by the research firm can reveal. The firm, which analyses financial data, corporate governance and shareholder registers of companies to determine whether they are vulnerable to becoming activist targets, has produced a 10-strong list. The results are compared with peers and broad indexes, such as the S&P 500 SPX, +1.30% and analysts provide extra context relating to the sector. Typically when an activist investor gets involved, a stock soars. In 2018 Activist Insight highlighted 76 companies under threat; of those 16 have already been targeted by an activist, including Papa John’s. PZZA, +2.68% The pizza company took a $200 million investment from Starboard Value earlier this year and made the activist hedge fund’s chief executive its chairman. The final five companies identified as vulnerable to shareholder activism are: Western Digital The data storage company’s stock WDC, +4.42% has soared 54% so far in 2019, surging after rival Micron’s better-than-expected earnings. Western Digital’s fourth quarter earnings beat forecasts but revenues missed as flash memory demand slumped. Last month chief executive Steve Milligan said the flash memory market had reached a cyclical low and expected stronger demand. The company faces stiff competition from cloud-based products, although it has developed its own hybrid cloud systems. See also: Sell Western Digital stock because its rally has gone too far, analyst says Activist Insight highlighted poor five-year total shareholder return of -33% compared with 60% for the S&P 500. An activist could push for a change of strategy or a raft of cost-cutting measures to boost profitability or even seek a merger or sale.

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