November 28, 2012
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 Timken (NYSE: TKR ) jumped 11% at 1:30 p.m. ET after news that an activist investor took a stake reached the market.
So what: Relational Investors, an activist fund, has bought a 6% stake in the manufacturer and reportedly plans to argue for a breakup. The Wall Street Journal reports that the fund has already met with executives and board members about its plan to break up the company.
Now what: We still don't have official word about Relational Investors' stake or its plans, so investors are currently speculating. The company also has a well-entrenched management that will probably fight any changes. I don't see this as a buying sign since everything is speculation at this point, but it may urge management to find ways to unlock value at the company.
Interested in more info on Timken? Add it to your watchlist by clicking here.