Hedge Funds Bought Starz and More

Iridian has also reported that it added shares of Dresser-Rand Group Inc. (NYSE:DRC), a $4.6 billion market cap manufacturer of equipment and machinery whose products are also used in the energy business. The fund now owns 4.6 million shares of that stock, or 6.1% of the company. While business has been about flat over the last year, the financial community is predicting strong growth for Dresser-Rand: the trailing P/E is 28, but the earnings multiple based on estimates for 2013 is only 17 and the five-year PEG ratio is 0.7. We would be interested in learning more about the company.

Columbus Circle Investors, an asset manager with $17 billion under management including about $1 billion in its hedge funds, owns 1.3 million shares of business software company Procera Networks, Inc. (NASDAQ:PKT). Check out Columbus Circle’s stock picks. Procera’s market cap of about $330 million (on average, over 300,000 shares are traded per day) places it at 31 times consensus earnings for 2013, but the company has been reporting strong growth on both top and bottom lines (sales and earnings were each up about 30% in its most recent quarterly report compared to the same period in 2011) and it has over $100 million in cash on its balance sheet.

Chatham Lodging Trust (NYSE:CLDT), a real estate investment trust which invests in hotels and motels, had Parag Vora’s HG Vora Capital Management report a 7% stake in the company (or 1.3 million shares). Chatham has a market capitalization of about $220 million, with an average of about 110,000 shares traded per day and a current market price of over $15.50; this should give it sufficient dollar volume for most investors. As an REIT it tends to pay high dividend yields, and appears to currently be making quarterly payments of 20 cents per share. That would imply a dividend yield of just over 5%. Real estate investment trusts receive favorable tax treatment conditional on distributing a large portion of their income to shareholders.

Disclosure: I own no shares of any stocks mentioned in this article.