What we’re looking for
The Canadian holdings of well-known activist investors.
Activist investors buy large stakes in publicly held corporations because they want to drive change and thereby realize a profit on their investment.
Once viewed as corporate raiders, today’s activist investors are more interested in fixing companies and finding ways to increase value. Their presence can be a clue that profitable change is underway at a firm.
How we did it
I’m happy to welcome back Jamie Hynes of S&P Capital IQ to this space.
His screen today utilizes the Capital IQ database to look for significant investments in TSX companies by firms that Capital IQ has flagged as activists. To keep the list to a manageable length, we included only companies with at least $100-million in market capitalization.
Significant investments are defined as those greater than 10 per cent of the company’s market capitalization.
More about S&P Capital IQ
S&P Capital IQ offers a comprehensive set of tools for fundamental analysis of global securities, idea generation and workflow management. The Web and Excel-based platform provides access to both real-time and historical information on companies, markets, transactions and people around the world.
What we found
A total of 21 companies pass the screen. Seven of them have lost 24 per cent or more of their value over the past year, a sign that activism may be welcome.
The most active “activist” on this list is Toronto-based West Face Capital, but U.S. heavyweights (Paulson & Co., Baupost Group) are also present. These canny investors see something they like in these names. That’s not a guarantee that the stocks on our list will be profitable, but it’s an encouraging sign.
Canadian holdings of prominent activist investors
| Company | Symbol | Activist investors (% owned) | Market cap. ($ mil.) |
|---|---|---|---|
| Canadian Pacific Railway | CP-T | Pershing Square Cap. Mgt. LP (13.98) | 15,188 |
| New Flyer Industries Inc. | NFI-T | Coliseum Capital Mgt. LLC (12.60) | 344 |
| Mandalay Resources Corp. | MND-T | West Face Capital Inc (43.18) | 279 |
| Primary Energy Recycling | PRI-T | West Face Capital Inc (14.58) | 217 |
| EnerCare Inc. | ECI-T | Octavian Advisors, LP (11.79) | 492 |
| Telus Corp. | T-T | Mason Capital Mgt. LLC (10.24) | 20,099 |
| SunOpta Inc. | SOY-T | West Face Capital Inc (11.49) | 402 |
| TAG Oil Ltd. | TAO-T | Elliott Management Corp. (11.60) | 416 |
| Connacher Oil and Gas | CLL-T | West Face Capital Inc (11.74) | 202 |
| Terago Inc. | TGO-T | Columbia Pacific Advisors, LLC (10.19) | 123 |
NM: not material or operating at a loss. Source: S&P Capital IQ
| Company | Symbol | Activist investors (% owned) | Market cap. ($ mil.) | Price (Oct. 23/12) | Price to tangible BV | P/E (trailing) | % total return last 3 mos. | % total rtn. last 1 year |
|---|---|---|---|---|---|---|---|---|
| Canadian Pacific Railway | CP-T | Pershing Square Cap. Mgt. LP (13.98) | 15,188 | 87.89 | 3.2 | 28.2 | 17.7 | 52.1 |
| New Flyer Industries Inc. | NFI-T | Coliseum Capital Mgt. LLC (12.60) | 344 | 7.74 | NM | 10.4 | 5.5 | 45.5 |
| Mandalay Resources Corp. | MND-T | West Face Capital Inc (43.18) | 279 | 0.88 | 2.3 | 26.6 | 54.4 | 31.3 |
| Primary Energy Recycling | PRI-T | West Face Capital Inc (14.58) | 217 | 4.86 | 1.2 | 37.3 | 3.4 | 25.3 |
| EnerCare Inc. | ECI-T | Octavian Advisors, LP (11.79) | 492 | 8.49 | NM | 42.5 | 5.6 | 20.6 |
| Telus Corp. | T-T | Mason Capital Mgt. LLC (10.24) | 20,099 | 61.9 | NM | 19 | 0.7 | 16.7 |
| SunOpta Inc. | SOY-T | West Face Capital Inc (11.49) | 402 | 6.09 | 2 | 23.9 | 13.2 | 14 |
| TAG Oil Ltd. | TAO-T | Elliott Management Corp. (11.60) | 416 | 6.96 | 2.3 | 35.7 | 3.9 | 8.8 |
| Connacher Oil and Gas | CLL-T | West Face Capital Inc (11.74) | 202 | 0.45 | 0.6 | NM | -4.3 | 7.1 |
| Terago Inc. | TGO-T | Columbia Pacific Advisors, LLC (10.19) | 123 | 10.9 | 5.1 | 87.7 | 4.5 | 3.8 |
| Maple Leaf Foods Inc. | MFI-T | West Face Capital Inc (11.39) | 1,525 | 10.93 | NM | 14.8 | 6.3 | 3.3 |
| Fairfax Financial Hldgs. | FFH-T | Southeastern Asset Mgt. Inc. (13.18) | 7,825 | 379.57 | 1.2 | 29.4 | -1.9 | -4.7 |
| Detour Gold Corp. | DGC-T | Paulson & Co. Inc. (13.54) | 2,983 | 26.48 | 1.9 | 128.4 | 29.3 | -11.7 |
| Tethys Petroleum Ltd. | TPL-T | Pope Asset Mgt. LLC (11.00) | 146 | 0.51 | 1.3 | NM | -13.6 | -12.1 |
| Nordion Inc. | NDN-T | West Face Capital Inc (13.18) | 397 | 6.41 | 1.5 | 19.7 | -31.9 | -24.1 |
| Tembec Inc. | TMB-T | Steelhead Partners LLC (12.89) | 244 | 2.44 | 1.3 | NM | 5.6 | -24.5 |
| Carpathian Gold Inc. | CPN-T | Baupost Group LLC (18.79) | 167 | 0.3 | 1.6 | NM | 5.3 | -26.8 |
| NovaGold Resources Inc. | NG-T | Paulson & Co. Inc. (12.86) | 1,407 | 5.03 | 2.9 | NM | -10 | -27.4 |
| Eco Oro Minerals Corp | EOM-T | Paulson & Co. Inc. (10.49) | 110 | 1.3 | 2.3 | NM | -15.6 | -45.4 |
| Guyana Goldfields Inc. | GUY-T | Baupost Group LLC (19.75) | 283 | 2.98 | 1.4 | NM | 55.2 | -63.6 |
| Gabriel Resources Ltd. | GBU-T | Paulson & Co. (16.16); Baupost (12.78) | 882 | 2.32 | 1.5 | NM | 33.3 | -64.9 |
Canadian holdings of prominent activist investors
- CP-T
- NFI-T
- MND-T
- PRI-T
- ECI-T
- T-T
- SOY-T
- TAO-T
- CLL-T
- TGO-T
- MFI-T
- FFH-T
- DGC-T
- TPL-T
- NDN-T
- TMB-T
- CPN-T
- NG-T
- EOM-T
- GUY-T
- GBU-T
