This article originally appeared on Jan. 28, 2014, on RealMoney.com. To read more content like this plus see inside Jim Cramer's multimillion-dollar portfolio for FREE... Click Here NOW
I keep track of activist investors as a matter of course as they often identify undervalued stocks and are successful at unlocking value in the form of a higher stock price. If you get in early enough quite a bit of money can be made riding their coattails. It is harder to do with the big guns like Carl Icahn and Bill Ackman as even a whiff of their involvement can send shares leaping almost immediately. But there are smaller investors who are pushing for changes at companies worth notice.
I have held shares of Cliffs Natural Resources (CLF) for some time and seen the stock pull well off its highs. We had a big gain in the stock that has contracted to a much smaller one as fears of a weak economy, slower growth in China and excess iron ore have weighed on the share price. The stock is higher Tuesday afternoon as an activist investor has the stock squarely in its sights and is agitating for a major shakeup at the company.
Casablanca Capital was formed in 2010 by Donald Drapkin and Douglas Taylor and has had a decent start as an activist firm. This morning the firm announced that it had accumulated more than 5% of Cliffs and advocated radical changes to the company that would unlock shareholder value in a very big way.