This morning I am hearing more thought-provoking rumors than I have in ages. I don't really know what to do with them other than report the rumors of why some stocks are running -- it's unorthodox, but what else can you do?
But that's not the case with Emerson Electric (EMR) and Eaton (ETN). Both are rumored to be the next targets of Trian Partners. Action Alerts PLUS owns Eaton, and we know that CEO Sandy Cutler is no friend of Nelson Peltz, the principal of Trian, having been lead director at DuPont (DD) and point man in the proxy battle against Peltz joining the board. To me, it seems too spite-oriented and I discount the rumor; however, the stock is cheap and there could be a cash event later in the year.
Emerson's tougher. It's been doing quite poorly and I don't know what Trian could do to turn it around. But I didn't know what Trian could do with Ingersoll-Rand (IR) , and I underestimated their thoughtfulness and their clear-headed vision. Emerson's down a great deal, but there easily could be a shortfall once again. Know the risk; there could be big reward.