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3 Top Targets For Activist Investors Right Now

Why invest in potential activist investor targets? The answer is that prices can spike fast on news of activist investors ramping up a stock holding. Unlike long-term execs, activist investors are usually happy to make drastic changes to try and turn a stock around.

Recently we have seen a number of big activist plays. In April shares of Whole Foods (WFM) rose nearly 10% following an SEC filing that revealed Barry Rosenstein’s Jana Partners had a 9% WFM stake. Jana, labelled a “greedy bastard” by WFM’s CEO, made millions by swiftly selling its WFM shares after the Amazon takeover. Meanwhile billionaire Nelson Peltz of the $13.33 billion Trian Fund Management is carrying out the biggest proxy fight in history against consumer giant Procter & Gamble.

So where will activist investors pounce next? TipRanks covers over 200 hedge fund managers, 5,000 stocks and tracks over 4,600 Wall Street analysts. From this extensive database, we swoop in and look at three stocks attracting activist attention right now:

1. Teva

In the last few days, shares in pharma giant Teva (NYSE:TEVA) have crashed from $31.25 to just $18.29. Prices dropped on a multiple of bad news- including lower-than-expected earnings results, guidance and dividend payments. For example, Teva cut its previous EPS guidance of $4.90-$5.30 to just $4.30- $4.50.

Top Mizuho analyst Irina Rivkind Koffler commented, “The weakness was attributed to a number of factors in the generics business including pricing pressure, decreased volumes, competition, and delayed launches.”

With prices so low, the company is now looking vulnerable to hedge fund activists. However, Teva’s massive $35 billion debt burden means that activists may struggle to find a willing buyer. It is more likely that an activist...