Lately, I’ve been thinking about the declining influence of large activist shareholders.
GE’s stock recently traded down at a 10-year low, and many believe it is only a matter of time until it cuts its dividend.
No dice says the powers that be at ADP, long a stellar performer.
In my opinion, billions of dollars of ownership doesn’t carry the sway it used to, at least in the large- and mega-cap arena.
In the small-cap world, activism has more impact in my view because shareholders get tired of having their stock for a pet rock and want to see some returns.
You see all kinds of interesting situations in the small company universe, which revolve around replacing management.
Very few are worth pursuing, but sometimes you can find an opportunity in my opinion.
The Dow Jones Industrial Average recently broke through the 23,000 level for the first time.
Dow components like Johnson & Johnson (JNJ), Goldman Sachs (GS) and IBM all reported earnings.
Big Blue, which has suffered from 20 consecutive quarters of declining revenues, impressed investors with its results and provided strong support for stocks.
Goldman Sachs continues to grapple with weak fixed income and currency markets and competitors with larger balance sheets.
In the tech world, Adobe (ADBE) blew out the numbers and was rewarded in a big way.
I will finish by mentioning that the effort for US tax reform may be gaining traction.
There were enough votes to pass an annual budget resolution, which is the foundation for a possible change in tax structure.
- Xavier Brenner has covered global market, business and economic trends for Interactive Brokers Asset Management since 2013. An experienced financial journalist, Brenner offers analysis and insights on the stories that matter to the discerning investor.