CSX, Arconic Top Sector Gains as Shareholder Activism Drives Them Higher

Shareholder activism drove the biggest gains among US industrial sector stocks in January as railroad CSX (CSX) and specialty aluminum fabricator and aerospace firm Arconic (ARNC) topped the winners' column.

Solid earnings reports contributed to gains among those rounding out the top 5 while a well-received acquisition lifted the group's final stock.

CSX shares rose 29.1% during the month as the railroad is reportedly in talks with an activist seeking to overhaul it ahead of a key deadline for investors to nominate candidates to the company's board.

Officials from Jacksonville, Fla.-based CSX met with veteran railroad executive Hunter Harrison and representatives from activist Mantle Ridge over the firm's push for more than three seats on the company's board, according to a report in The Wall Street Journal.

Harrison stepped down as CEO of Canadian Pacific CP earlier this month to join Mantle Ridge's efforts to shake up CSX.

The report said that while CSX, which was represented at the meeting by board members Edward Kelly and David Ratcliffe, is open to a compromise it is reluctant to surrender that many board seats. The two sides are trying to reach a compromise before the Feb. 10 deadline for investors to nominate directors, though that date could be pushed back if the company sees a reason to continue talks.

Arconic, the second best first-quarter performer, rose 22.6% in January.
Investors are reportedly pushing for the ouster of Arconic CEO Klaus Kleinfeld, the architect of a series of transactions by Alcoa Corp-Corp to diversify the company away from commodity metals and the subsequent spinoff that created Arconic.

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