Despite the recent run in share price, I believe Hess Corp.(NYSE:HES) has more upside over the next 12 months for several reasons. First, the company announced a dividend increase and share repurchase plan that benefits a higher share price. Second, annual production growth is estimated at 5% to 8% through 2017, and capital expenditures will decrease by 17% in 2013.
Navistar International Corp (NYSE:NAV)
Navistar International Corp (NYSE:NAV) is a $2 billion trucking manufacturer headquartered in Illinois. The company manufactures commercial and military trucks, as well as branded and private label diesel engines.
Shares of Navistar have fallen from a high of $70 during 2011 and currently exchange hands in the mid $20-range. Hedge fund investors Mark Rachesky and Carl Icahn both own at least 12 million shares of Navistar.
Interestingly, Rachesky worked for Icahn for 6 years. He subsequently left Icahn and started his own hedge fund, MHR Fund Management, named with his initials. During 2010, Rachesky actually beat out his former mentor Icahn in a profligate legal battle over Lion’s Gate Entertainment, the film entertainment company. Now, Icahn and Rachesky are on the same side of the table, working to improve the corporate management at Navistar.
In February, Icahn reported an increased stake in Navistar International Corp (NYSE:NAV), in addition to Chesapeake Energy Corporation (NYSE:CHK), Netflix, Inc. (NASDAQ:NFLX), and Take-Two Interactive Software, Inc. (NASDAQ:TTWO)
Shares of Navistar have fallen over the last 2 years as the company lost market share to competitors Paccar and German brand Daimler AG. The CEO of Navistar recently stated he expects his company to regain share as the company introduces its revamped engines. Market share at the end of January had fallen to 16.5% from a previous 21% during 2011.
Foolish Bottom Line
Often times, corporate objectives do not coincide with shareholder interests, as we’ve seen with the board of directors at Apple Inc. (NASDAQ:AAPL) being deaf to shareholders with its hoards of cash. Apple has refused to issue preferred stock with a higher dividend yield or institute a share buyback plan. CEO Tim Cook even went as far to say that he considered the recent investor lawsuit to be “silly.”
In contrast to Apple, retail investors have an advocate in Famous Dave’s of America, Hess Corp.(NYSE:HES), and Navistar International Corp (NYSE:NAV). Furthermore, Motley Fool readers can own identical shares and benefit equally while heavyweight investors such as Icahn, Rachesky, Singer, and Walsh pursue our common goals.
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The article Three Stocks with Tremendous Upside from Activist Investors originally appeared on Fool.com and is written by John Macris.
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