4 Stocks Moving on Activist Attention

AIG, M, CSIQ, and VIAB are moving on activist attention

Jan 19, 2016 at 12:53 PM
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Activist attention is all over the Street today, from open letters to management to M&A chatter. Among the stocks in the spotlight are insurance issue American International Group Inc (NYSE:AIG), retailer Macy's, Inc. (NYSE:M), alternative energy issue Canadian Solar Inc. (NASDAQ:CSIQ), and media mogul Viacom, Inc. (NASDAQ:VIAB)

AIG is up 0.7% at $56.49, after Carl Icahn sent an open letter to the board calling for a breakup. Of course, Icahn's hopes are nothing new; the activist investor took a large stake in AIG in late October, and urged CEO Peter Hancock to split the firm in three.

The shares of AIG have dropped 8.8% in 2016, and on Friday tested familiar support in the $55-$56 region. The company is expected to update investors on its strategy in one week. Ahead of the event, it looks like one trader or institution is betting on a big near-term swing in either direction, implementing a long strangle. Specifically, they bought to open 1,500 March 55 puts and March 57.50 calls this morning, per the International Securities Exchange (ISE).

M is up 4.1% at $39.45, after David Einhorn's Greenlight Capital reported a new stake in the firm, saying it could be a ripe takeover target. In addition, Macy's CEO Terry Lundgren hinted at a possible real estate spin-off. Earlier this month, the retailer announced plans to cut thousands of jobs and downwardly revised its guidance. 

Although M is one of the rare equities in positive territory for 2016 -- the stock boasts a year-to-date gain of 12.8% -- the shares are bumping up against potential resistance in the $40 region, which is home to M's November bear gap. Meanwhile, short-term options traders haven't been more call-heavy during the past year, as the stock's Schaeffer's put/call open interest ratio (SOIR) sits at an annual low of 0.35. Should M back down on the charts, an exodus of option bulls could weigh on Macy's, Inc.

CSIQ is up 2.3% at $19.22, after DNB Asset Management reported a 5.9% stake, as of Dec. 31, 2015. It's been a rough 2016 for the solar stock, which has given up more than one-third of its value already. Things were looking promising at the end of 2015, too, thanks to some favorable tax rulings.

Despite the equity's rocky month, DNB Asset Management isn't the only group in CSIQ's corner. All eight analysts following the security deem it worthy of a "strong buy" opinion, and the consensus 12-month price target of $36 is in territory not charted since May. Should CSIQ continue to sink, a round of downgrades and/or price target cuts could exacerbate selling pressure.

Finally, VIAB is up 4.8% at $41.77, after activist investor Eric Jackson called for a management shake-up. Furthermore, Jackson opined that the changes could more than double VIAB's share price. Viacom, Inc. is now in the black for 2016, up 1.5%.

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