4 Stocks Moving on Activist Attention

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

by Andrea Kramer

Published on Jan 19, 2016 at 12:53 PM

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%.

A Schaeffer's exclusive

6 Sectors for Summer

Access your FREE insider report before it's too late!


  
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


Research Exposes Shortcut to Stock Market Wins
A simple way to stop picking losers, and start cashing in like Wall Street's elite.
Google Postpones Android Reveal, "Now is Not the Time to Celebrate"
"Now is not the time to celebrate," Google said in a message on its website
ZNGA Zooms to 8-Year High on Billion-Dollar Deal
ZNGA is planning to buy Peak for $1.8 billion
Huge New Legal Marijuana Market Has Shortage Crisis
250 million Europeans have access to medical marijuana. There's already a shortage....