Alexander & Baldwin Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Honolulu-based conglomerate Alexander & Baldwin (NYSE: ALEX  ) soared more than 15% after activist investor Bill Ackman -- through his hedge fund, Pershing Square Capital Management -- teamed up with Richard McGuire, managing member of Marcato Capital Management, to acquire a 9.9% stake in the company.

So what: Given Ackman's reputation as an activist investor who buys undervalued companies and actively pushes to unlock that value, Mr. Market is naturally bidding up Alexander & Baldwin's stock in anticipation of shareholder-friendly changes. In fact, Ackman and McGuire said specifically in a joint regulatory filing that they "expect to engage in discussions with management, the board, and other stockholders," as they believe that the shares "are undervalued and are an attractive investment."

Now what: Don't let today's big rally scare you away from the stock. While Fools should never blindly ride the coattails of any bigwig investor, Ackman's recent success with Fortune Brands (NYSE: FO  ) and General Growth Properties (NYSE: GGP  ) , coupled with the fact that Alexander & Baldwin looks legitimately cheap, makes this situation worth looking into. With such a mishmash of assets that include 87,000 acres of Hawaiian land, a container ship service, and a fully integrated agribusiness, Alexander looks like a good candidate to be split up -- and Ackman seems like good bet to get it done.

Interested in more info on Alexander & Baldwin? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Fortune Brands is a Motley Fool Stock Advisor choice. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1468787, ~/Articles/ArticleHandler.aspx, 10/22/2014 4:06:20 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement