Jeffrey Altman’s Owl Creek’s Top Picks Include Yahoo! Inc. (YHOO)

Owl Creek initiated a position of 4.3 million shares in CommonWealth REIT (NYSE:CWH). The real estate investment trust — which primarily invests in office and industrial buildings is going through arbitration with activist investor Corvex Management in concerns with Board members and Bylaws. Corvex had been disappointed with the trustees’ lack of oversight regarding management. CommonWealth currently pays quarterly dividends of $0.25 per share, resulting in an annual yield of 4.3%; real estate investment trusts receive favorable tax treatment conditional on distributing a large share of taxable income to shareholders.

Altman had owned 2.6 million shares of Iron Mountain Incorporated (NYSE:IRM) at the beginning of April. Iron Mountain plunged in price in early June after the company revealed that the IRS may revise its definition of “real estate” in a way that prevents it from converting to an REIT (since REITs are more tax efficient, markets had already partially bid up Iron Mountain’s stock price). Currently the stock pays a dividend yield of 4% and could potentially be an income pick in any case, although its net margins have fallen recently.

As a result both Iron Mountain Incorporated (NYSE:IRM) and CommonWealth are possible picks for income investors, although we’d advise against concentrating too heavily on REITs. Hertz Global Holdings, Inc. (NYSE:HTZ) and Metlife are also interesting prospects from a value perspective, though with trailing earnings numbers not being that strong in either case it would of course be important to investigate how these companies are expected to achieve their impressive forward results before considering a purchase.

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