A few links to help get through this hump day:
- ValueWalk links to a frank interview with JANA Partners co-founder Gary Claar, who now heads up his own shop Claar Advisors. Within, Mr. Claar discusses some of the investments he was involved with at JANA, including McGraw-Hill as well as some of his new fund’s ideas. Additionally, he shared his thoughts on the increasingly popular activist investing trend. One comment that I agree with was that although activism on the whole is a positive change, ‘there are certainly instances of good and bad activism, but each case is unique and should be evaluated on its own merits.’ Too many people just take a side without looking into the details or the plans.
- Catching up on some older stuff, Clark Street took a look at the slooow moving NextEra (NEE)/Hawaiian Electric (HE) merger which would result in the spinoff of Hawaii’s American Savings Bank. As part of the deal, HE shareholders will receive a special dividend, shares in NextEra and shares in the newly separated ASBH. The author is mainly interested in taking a position in the bank post-spin which he thinks can have nice upside and he walks through his thoughts on valuation and possible ways to construct a trade. The overall deal spread has been wide and the regulatory process has been painfully slow leading to the closing date being pushed back to mid 2016. It’s a highly regulated industry requiring numerous approvals and also a very political situation given its prominence in Hawaii. Everyone seems to have an opinion on the deal and even the governor has come out against the deal. Many, including the author of the piece, believe the plan is to try an extract more concessions from NextEra, which seems reasonable, but you never know.
Disclosure: Author holds no position in any stock mentioned.