STERIS Corp (STE), Flowserve Corporation (FLS), Helmerich & Payne, Inc. (HP): 1 Underrated Activist Is Bullish On These Stocks

S&P holds a positive outlook on Flowserve Corporation (NYSE:FLS)’s sub-industry, citing that they “expect manufacturing and machinery usage in the U.S. to gradually expand later in 2013 and during 2014,” adding that demand in China should be enough to offset a slower Europe. All in all, the LNG terminal marketplace looks brighter and brighter as the months pass—just see this map—and the recent approval of the Freeport LNG operation should only help hasten this momentum.

Helmerich & Payne

Helmerich & Payne, Inc. (NYSE:HP) is the next on the list, being represented in the Breeden’s 13F by a $6.4 million stake, which involves 105,951 shares. Up 12% since the start of the year, this contract oil and gas drilling rig operator still trades at a forward P/E below 12, and this is another play on U.S. energy—specifically fracking—but there’s also a bit of a twist.

On the trading floors, there is chatter that Helmerich & Payne, Inc. (NYSE:HP) might perform a share repurchase program this summer, due to its curious sale of some of its long-time 28% stake in Atwood Oceanics, Inc. (NYSE:ATW). This analyst sums up this potentially bullish scenario quite nicely, surmising, “the company appears to be under pressure to have a special payout or, probably better from the Street’s perspective, initiate a share repurchase program.”

Though nothing is certain, shareholder value stimulation is a perfect reason for anyone to be bullish, including Breeden, and the overall expansion that’s occurring in Helmerich & Payne, Inc. (NYSE:HP)’s industry is a nice fallback option to have as an investor.

The best of the rest

In Zale Corporation (NYSE:ZLC), Richard Breeden’s hedge fund posted a $566,000 holding, containing 143,968 shares. The position slumped from a $20.4 million stake of 4,959,354 shares. Zale could be found in the equity portfolios of 9 top-tier hedge funds, including Breeden, in the previous round of 13F filings. The small-cap company is engaged in retail sales of fine jewelry, and its stock sports a year to date return above 24%, while still trading at a forward P/E of 15.9x.

Final thoughts

Breeden Capital is one of the 500 elite hedge funds we track at Insider Monkey, and its involvement in key domestic energy input companies, Helmerich & Payne, Inc. (NYSE:HP) and Flowserve Corporation (NYSE:FLS), in addition to its bet on STERIS Corp (NYSE:STE) are worth watching. The hedgie’s Zale investment looks more like a value bet on a continuing economic recovery, so we’ll be paying attention to it as well.

Disclosure: none