Atlantic Power Corp (AT): Mangrove Partners Goes Activist on Giant Position, Pushes for Aggressive Shareholder Returns

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Atlantic Power Corp (NYSE:AT) had begun the sales process last year but the board ultimately concluded that a sale was not in the best interests of the company at that time. Another fund, Greg Taxin’s Clinton Group, which also opened its position in Atlantic during the fourth quarter, later pushed for the revival of that sale process. According to Mangrove’s latest filing, on April 24 the fund conducted a telephone interview with Atlantic Power’s President and CEO James J. Moore Jr., during which the fund did indeed express a desire for board representation. Interestingly, Clinton Group, which held a position of 2.34 million shares at the end of 2014, would not be able to support a resolution put to the board by Mangrove for a sale of Atlantic Power, as it has an agreement with Atlantic to support the company’s initiatives with its voting power, should a proxy battle ensue.

Some other shareholders who could possibly play a role in such a vote, should the situation ever escalate to that point, include David S. Winter and David J. Millstone’s 40 North Management and James Dondero’s Highland Capital Management.

We don’t just track the latest moves of funds. We are in fact more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held collectively by the funds we track. We gather and share this information based on 16 years of research, with backtests for the period between 1999 and 2012 and forward testing for the last 2.5 years. The results of our analysis show that these 15 most popular small-cap picks have great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests. Moreover, since the beginning of forward testing from August 2012, the strategy has worked splendidly, outperforming the market every year and returning 137.7% through April 14, which is more than 80 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).

Disclosure: None

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