Two things driving activists’ interest

Article Excerpt

Activists usually demand big changes at companies they feel are undervalued. Still, sometimes, they simply invest in a company because they like its existing prospects. Here are examples of both. CANADIAN PACIFIC RAILWAY LTD. $89 is a buy. The company (Toronto symbol CP; Manufacturing & Industry sector; Shares outstanding: 929.9 million; Market cap: $82.8 billion; Dividend yield 0.9%; Takeover Target Rating: Medium; transports freight over a 23,700-kilometre rail network in Canada as well as the U.S. Midwest and Northeast. U.S.-based activist investor Bill Ackman, through his Pershing Square hedge fund, now owns 2.8 million shares of CP. He also owns forward contracts to buy a further 12.0 million shares. That would raise his total to 14.8 million shares, or 2% of the total outstanding. Ackman originally acquired CP shares in 2011 and used that position to install the late Hunter Harrison as CEO. Under Mr. Harrison’s leadership (as well as his successor Keith Creel), CP streamlined its operations. The activist sold his original shares in 2016 for…

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