Jim Cramer -- Activists Have Made Darden a Winner

Activist investors can be a source of good for some companies, really bad for many others, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment Tuesday.

Here's one example of "activism gone good," he said: Darden Restaurants (DRI) - Get Report . Its stock was upgraded to buy from hold by analysts at Piper Jaffray, who said they upgraded because of sustainable management changes, among other reasons.

Despite being off its highs, the stock has done well over the past two years and pays an attractive dividend yield of nearly 3.2%. Darden is seeing a drop in commodity prices, which is good for its costs, while also seeing a boost in same-store sales, he added.

However, activism can be a "double-edged sword" at times, Cramer explained. Sometimes these investors get board seats on the company. If their hedge fund is underperforming, they could be forced to sell out of the stock. Sometimes, they're forced out of the stock but stay on the board. 

"Hedge funds that are active need to have great returns to get more money," Cramer said. It creates a "vicious cycle down after being a virtuous cycle up."

At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.