ABB Stock Gains After Cervian Capital Takes Stake

NEW YORK (TheStreet) --Shares of ABB (ABB) were gaining 4.7% to $23.40 on heavy trading volume Thursday following a report that activist investor Cervian Capital has taken a stake in the Swiss engineering company.

Cervian now holds a stake of more than 3% in ABB, according to Reuters. "We think ABB is a good company where we see a large value potential," Cervian Capital manage partner Christer Gardell told the news service.

On its website ABB said, "We welcome Cevian Capital II GP Limited investment in ABB and, as with all shareholders, appreciate the engagement and input."

News of the activist investor's stake comes a day after ABB won an order to supply the power infrastructure for a 400 MW wind farm off the coast of the U.K.

About 2.7 million shares of ABB were traded by 10:35 a.m. Thursday, above the company's average trading volume of about 1.6 million shares a day.

TheStreet Ratings team rates ABB LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ABB LTD (ABB) a BUY. This is driven by a few notable strengths, 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 largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations, notable return on equity and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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