JCI - An Activist Hedge Fund Is Buying This Dividend Stock. Time to Follow?
2024-05-25 10:38:00 ET
The news that high-profile activist hedge fund Elliot Investment Management has built a $1 billion position in building controls and heating, ventilation, and air conditioning (HVAC) company Johnson Controls (NYSE: JCI) has sent the stock higher.
While some of the moves are, no doubt, down to investors who simply looking to jump on the bandwagon, it's also a reflection that Johnson's management could do a better job of generating value for investors. Here's why the latter is a robust case, and the hedge fund move could be a positive catalyst for the stock.
A quick look at the company's stock chart compared to its HVAC peers and the S&P 500 says a lot. Not only has it significantly underperformed, but it's down since the start of 2022. It's been an excellent stock to buy on a dip but not so good for long-term buy-and-hold investors.
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An Activist Hedge Fund Is Buying This Dividend Stock. Time to Follow?