NEW YORK (TheStreet) -- Shares of Perrigo (PRGO) - Get Report  were increasing in pre-market trading on Monday as the activist hedge fund Starboard Value revealed a 4.6% stake in the stock. 

Starboard is now urging the Allegan, MI-based drugmaker to hire advisers to explore a sale of its prescription pharmaceuticals business, as well as other alternatives, the hedge fund said Sunday in a letter to Perrigo, according to the Wall Street Journal.

The hedge fund said the company has had several "operational and financial missteps" while fending off a $26 billion takeover bid from Mylan (MYL) last year. 

Starboard added that Perrigo has been distracted by the merger and other factors, resulting in lower investor confidence, the Journal notes.  

Perrigo shareholders had approved a deal with Mylan in November, but the company's former CEO Joseph Papa argued the offer undervalued Perrigo, and later quashed the deal. Papa is now CEO of Valeant Pharmaceticals (VRX). 

In August, Perrigo reported worse-than-expected second quarter results, which the company's new CEO, John Hendrickson, blamed primarily on "competition and price erosion" for its generic drugs, the Journal added. 

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

TheStreet Ratings team rates Perrigo as a Hold with a ratings score of C-. The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, it also finds weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

You can view the full analysis from the report here:

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