Now is the time to invest in Perrigo Co. Plc (PRGO - Get Report) and Altaba Inc. (AABA - Get Report) , Starboard Value CEO Jeffrey Smith said at CNBC and Institutional Investor's Delivering Alpha conference in New York on Tuesday, Sept. 12.

Smith's comments sent Perrigo stock surging over 5% midday Tuesday. 

Smith's activist fund gained five director seats on the Perrigo's board earlier this year, with Smith winning a spot on two critical strategic review committees.

Smith announced during Tuesday's comments that Starboard is carrying out an executive review of Perrigo's prescription medicines business. The review will examine options including a joint venture, sale, acquisition, partnership or spinoff. At the same time, Starboard is conducting a search for a new CEO.

Perrigo is a leading over-the-counter drugs supplier for Walmart Inc. (WMT - Get Report) , Walgreens Boots Alliance  (WBA - Get Report) , Costco Wholesale Corp.  (COST - Get Report) and others, Smith said, with 60% to 75% of the OTC drugs market belonging to Perrigo. And Perrigo could be immune to the Inc. (AMZN - Get Report) effect, as five of the top six search results for "ibuprofen" on Amazon are Perrigo products.

But Perrigo's stock trades at a steep discount to both domestic and international peers. Smith said that discount is because "valuation gets dragged down based on 20% of revenue that's based on generics business."

The generics drug business, separate from the consumer OTC business, offers almost "instantaneous revenue" for Perrigo, even taking price pressure concerns into account, because generic drugs can replace the brand name nearly the moment a brand name drug's patent expires.

Generic drugs are a good business, Smith said, but there's not enough synergy between generics and consumer drugs businesses. With that, Smith proposed separating the consumer and generics businesses to help with synergy and provide investors with more focused results.

The consumer business investor seeks growth in earnings, dividends and distribution -- which isn't exactly what a generic drug business investor might look for.

Toward the end of his remarks, Smith offered a second smart investment in addition to Perrigo. 

The best way to invest in tax reform is to invest in Altaba. With its stake in Yahoo Japan and Chinese ecommerce goliath Alibaba (BABA - Get Report) , Altaba still trades at a 30% discount to where it should, Smith posited. 

Altaba stock traded slightly up following Smith's comments.

Even with his high-profile praise for ecommerce's role in markets, Smith made a bold remark on bricks-and-mortar retail: the department store is not dead.

Smith notably launched an activist campaign at Macy's (M - Get Report) at the Delivering Alpha conference two years prior.

"There's value there. There's a lot of value in Macy's," Smith said, adding that value is beyond just the retailer's real estate holdings, as some analysts have suggested this year.

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