NEW YORK (TheStreet) -- Prominent activist investors are making noise again. It might be worth following them in their latest investments.
Activist investors, who take stakes in companies and shake up management or change strategies to wring out investment gains, have been busy doing their homework on undervalued stocks. With keen eyes for companies with turnaround potential, Carl Icahn and Daniel Loeb have found the latest targets. On the other hand, David Einhorn knows when to take the other side of the bet on an overvalued stock and has made a short position in his latest victim.
This flurry of activity could be a sign for a new investment opportunities. Given the solid track records of these famous investors for getting the value that they want out of a company, it's worth taking a look at these stocks.
This Coffee Brewer's Days May Be NumberedIn mid-October, Greenlight Capital's Einhorn presented his latest short idea at an investor conference. The play was to short shares -- or to bet on a decline -- in Green Mountain Coffee Roasters (GMCR), which has more than doubled in the past year. Einhorn is most famously known for his short position in Lehman Brothers prior to the collapse of the investment bank. In his presentation on Green Mountain, he brought into question the company's accounting practices, its relationship with key vendors and the imminent expiration of the K-cup patent, a product used in its single-serve coffee machines. Green Mountain is scheduled to release fourth-quarter earnings after the market close today. The eloquent and locquacious hedge fund manager surely will be listening closely for answers to his concerns. Since Einhorn announced his short position, the stock has declined 24%. WebMD -- Is This Patient Healthy? Icahn recently increased his stake in online health-information provider WebMD (WBMD) to 9.5% from an initial stake of 7.9% in October. Icahn, known for pushing change at companies through management shakeups, strategy switches or outright sales of businesses, identified WebMD as an undervalued stock from a long-term perspective. His initial filing noted that he "may seek to have conversations from time to time with management." A shareholder-rights plan was adopted by the company shortly after Icahn's initial investment was made, discouraging investors from acquiring more than 12% of the shares outstanding.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV