This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Deal-Ready Stocks Loved by Hedge Funds

Stocks in this article: DISH TYC LMCA CYT BRCD

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Cytec Industries

The hedge fund investors who piled into Cytec Industries (CYT - Get Report) in the fourth quarter were richly rewarded when the company confirmed it had hired JPMorgan to help it decide on a spin or sale of its coating resins business. On the news of the strategic decision making, the firm's shares jumped, putting 2012 gains near 30%.

"We are committed to maximizing the value of the Coating Resins business. The decision to explore separation options for the entire business is consistent with our strategy of focusing on our remaining profitable and growing segments," said Cytec Industries Chief Executive Shane Fleming in a fourth quarter earnings statement.

For Barry Rosenstein-run Jana Partners the announcement couldn't have been timed better. The investment fund took an over 3% stake in Cytec Industries worth roughly $85 million in the fourth quarter. In third quarter earnings, the maker of plastic parts used in airplanes disclosed that it would look at strategic alternatives for its coating and resins business. Jana Partners profited off of many of the biggest spins in 2011. Among its top 10 holdings, Marathon Petroleum (MPC), El Paso (EP), McGraw Hill (MHP) and Netflix (NFLX) all attempted spin or sale plans, with Netflix quickly reversing course. Overall, Cytec Industries is Jana Partners' sixth largest stake, while Liberty Media is its ninth largest holding.

Since October, the Woodland Park, N.J.-based company's shares have rallied as asset value realization strategies become more probable.

Other large shareholders benefitting from a fourth quarter and 2012 rally, are RoundKeep Capital Advisers, Millennium Management and Two Sigma Investments.

Cytec Industries is trying to boost earnings by closing a plant in Brazil for its resins business, while exiting some business lines to re-invest in waterborne and radiation-cured coatings, the company said in its third quarter earnings. The coating resins business accounted for 52% of Cytec Industries' overall sales in 2010. However in third quarter earnings, Cytec projected that the unit would post an operating loss of up to $8 million, reducing its full year earnings to as little as $57 million, a drop from previous projections of $80 million in earnings.

In early 2011, Cytec Industries completed the sale of a chemicals business to private equity firm HIG Capital for $180 million.

Overall, Cytec Industries is expected to earn $3.3 billion in sales and $188 million in profit in 2012, according to consensus estimates of analysts polled by Bloomberg, who give the company's shares a $63.17 price target. Revenue is expected to grow to $3.4 billion and profits to $208 million in 2013.

For more on Jana Partners investments see their investement portfolio.

5 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs