Wednesday, January 24, 2007

Paperstand (MEAD, LEG, TIN)

According to the WSJ’s „Inside Track” section, stock purchases by 2 major shareholders of Meade Instruments (MEAD) loom even larger now that the funds have representatives on its board. Hummingbird Mgmt, Meade's largest shareholder, and Monarch Activist Partners reported increasing their stakes in the co over the past 2 weeks. The stock purchases are the first by the shareholders since June, when Meade agreed to let Hummingbird's Paul Sonkin and Monarch's James Chadwick join the co's board. After the most recent purchase, Hummingbird owns about 15.6% of Meade's stock outstanding, while Monarch has amassed a 3.7% stake. "Certainly it's positive that not only they're now on the board and they have more say in the direction of the co, but they're continuing to increase their respective stakes in the co," said Ben Silverman, of

Barron’s Online highlights Leggett & Platt (LEG), whose shares have languished along with the home and automotive sectors. But a recently completed restructuring program and new acquisitions may give the co and its stock new legs to stand on in ‘07. Despite setbacks in several of its core mkts, Leggett's stock, which trades at 14x forward earnings, has the potential to climb at least 15% over the next 12 mo, as the benefits of a comprehensive restructuring program, which was completed last qrtr, drive into full gear. "In a mkt where there are a lot of uncertainties related to housing, this is a stock we think will hold up better b/c of its track record, mgmt team and dividend yield," says Trip Rodgers, of Carlson Capital.

“Inside Scoop” section reports that late Monday, Carl Icahn and his investment partners reported they have spent about $301.2M to purchase 7.2M shares (or a 6.73% stake) of Temple-Inland (TIN) on the open mkt starting in the 4Q05. Icahn's group also has exposure to another 3.38M shares, or 3.16% of Temple-Inland's nearly 107M outstanding shares, through a number of derivative agreements (total return swaps) with counterparties. Jonathan Moreland, of, says that with Temple-Inland, it seems that Icahn "wants the big money like the '80s -- buy it and break it up." Although Icahn "is rarely bad to bet with," Moreland says that investors should have a stomach for volatility because sometimes his suggestions don't work out.

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