4 'Battleground' Stocks Fought Over by the Biggest Investors
NEW YORK ( TheStreet) -- The most recent quarter was full of battleground stocks, with the help of famous hedge fund managers. For some of the most hotly contested stocks, the war rages on.
A number of hedge funds reported their holdings as of the end of the fourth quarter in 13F filings last week. There were varying investment themes across industries, and for the most part the smart money funds bought and sold stocks in their key sectors on the down low, not revealing their positions until last week.
For some activist hedge fund investors, though, their strategies were known early on. This turned some stocks into a battlefield for investors, company management teams and sell-side analysts. Other stocks became battlefields as management judgment and oversight of accounting requirements came into question.
Below we review some of the stocks that faced the biggest battles . For some, those fights are far from over, so stay tuned.
Diamond Foods (DMND)
Company Description: Maker of Emerald nuts, Kettle chips and Pop Secret popcorn.
Stock Price Performance in 4Q/YTD: -56% / -25%
Long Case: Diamond Foods is finally moving past the accounting scandal -- it recently announced it would be replacing the CEO and CFO after an internal investigation that found improper accounting for payments to walnut growers. Additionally, the company reached a deal with Procter & Gamble to call off the deal for Diamond to buy the Pringles brand. This was a positive because many thought Diamond would have to pay a break-up fee as the decline in stock price made financing the deal difficult.
Buyers: Wellington Management, TIAA Cref, State Teachers Retirement System of Ohio
Short Case: The accounting scandal has caused skepticism regarding the financial reporting and real earnings for the company. Hiring a new CEO and CFO also adds risk. Finally, the acquisition of Pringles would have made Diamond the second-largest snack maker in the country and with that deal off the table growth will have to be organic.
Sellers: Del Mar Asset Management, Bamco, Artisan Partners, Lord Abbett & Co.
Short Interest: 50% of float
Green Mountain Coffee Roasters (GMCR)
Company Description: Maker of Green Mountain coffee and the Keurig coffee brewer.
Stock Price Performance in 4Q/YTD: -49% / +54%
Long Case: Green Mountain reported a blow-out quarter, with sales doubling due to strength in sales of Keurig brewing machines and K-cups, a product used in its single-serve coffee machines, signaling good momentum. The company also introduced its next-generation Keurig brewing machine, the Keurig Vue, which is expected to help drive growth.
Buyers: Capital Research Global Investors, Fidelity, Ameriprise, Lone Pine Capital.