David Tepper Nails Dean Foods (DF) Trade, Here is His Next One...
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Hedge fund titan David Tepper of Appaloosa Management is having a great day. Dean Foods (NYSE: DF), a stock he recently accumulated a 7.4 percent stake in, is surging 11 percent after Goldman Sachs upgraded the stock to Buy and said it can double from here. The investment bank cited a margin recovery for its upgrade.
Mr. Tepper first disclosed his stake in Dean Foods on January 7th. Since then the stock is up an astonishing 53%. Not too shabby for a few months work.
There was another stock Tepper was buying around the same time which didn't get quite the pop Dean Foods has seen, but it could be worth a look.
That stock is Meller Water (NYSE: MWA). Tepper's Appaloosa has accumulated a 7.5% stake in Meller Water and first disclosed he built his position above 5% on March 7th. Since that time the stock is up a respectable 13.2%.
Goldman Sachs, which was the catalyst in Dean Foods Friday, is not so hot on Meller Water. In fact in the firm's latest report, Goldman reiterated a Sell rating on the stock. Goldman said the firm expects to see a longer path to mid-cycle earnings than the stock currently discounts due to: prolonged under-absorption in a slow US construction recovery declining public construction share of GDP due to municipal budget constraints, and (3) risk from further cost inflation.
On the other side of the trade is DA Davidson. The firm has a Buy rating and $6 price target on Meller Water, expecting broad pricing improvement in the second half of this year. The firm also said a potential sale of its U.S. Pipe unit could have positive implications for immediate earnings and cash flows.
Smart investors may be wise to take a look at both Dean Foods and Meller Water for continued upside.
Track all the latest hedge fund developments at StreetInsider.com's Hedge Fund Insider.
Mr. Tepper first disclosed his stake in Dean Foods on January 7th. Since then the stock is up an astonishing 53%. Not too shabby for a few months work.
There was another stock Tepper was buying around the same time which didn't get quite the pop Dean Foods has seen, but it could be worth a look.
That stock is Meller Water (NYSE: MWA). Tepper's Appaloosa has accumulated a 7.5% stake in Meller Water and first disclosed he built his position above 5% on March 7th. Since that time the stock is up a respectable 13.2%.
Goldman Sachs, which was the catalyst in Dean Foods Friday, is not so hot on Meller Water. In fact in the firm's latest report, Goldman reiterated a Sell rating on the stock. Goldman said the firm expects to see a longer path to mid-cycle earnings than the stock currently discounts due to: prolonged under-absorption in a slow US construction recovery declining public construction share of GDP due to municipal budget constraints, and (3) risk from further cost inflation.
On the other side of the trade is DA Davidson. The firm has a Buy rating and $6 price target on Meller Water, expecting broad pricing improvement in the second half of this year. The firm also said a potential sale of its U.S. Pipe unit could have positive implications for immediate earnings and cash flows.
Smart investors may be wise to take a look at both Dean Foods and Meller Water for continued upside.
Track all the latest hedge fund developments at StreetInsider.com's Hedge Fund Insider.
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