Why AOL, Inc. (AOL) Jumped on Tuesday

NEW YORK (TheStreet) -- AOL, Inc. (AOL) jumped on Tuesday after Iiridian Asset Management filed an SEC document disclosing a 9.3% passive stake in the website publisher.

As Iridian notes via its website, it invests in mid-caps "undergoing significant corporate change." The specifics of this corporate change are unknown, though it is likely in relation to a previously announced spin-off of Patch to a new joint venture headed by Hale Global.

The New York-based business is due to report fourth-quarter results on Thursday. Analysts surveyed by Thomson Reuters expect quarterly net income of 60 cents a share on $655.81 in revenue. For the full year, consensus is for per-share earnings of $2.02 and $2.3 billion in revenue.

Ahead of earnings, Needham & Company revised its price target to $57 from $46. The investment firm expects fourth-quarter revenue and EPS of $647 million and 59 cents a share, respectively.

By late morning, shares had added 4.9% to $49.15.

TheStreet Ratings team rates AOL INC as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate AOL INC (AOL) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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