Many "serious" investors are smart enough to know that unless they plan on spending painstaking hours analyzing and researching businesses and industries, they aren't "serious" enough (because you are reading this column, it suggests that you are wise enough to utilize such valuable tools as Real Money).
But the beauty of the investing profession is that you can delegate the work to a top-notch professional and still reap nearly the same benefits as that pro. Imagine being able to have Tiger Woods or Phil Mickelson as your side partners in a U.S. Open qualifier, then do the same during the national championship.
It gets even better in investing. You not only have the opportunity to see what other investors own when they file Form 13Fs with the Securities and Exchange Commission 45 days after the fact, you can invest alongside them in real time. When investors go active, they tend to use publicity to their advantage, so you find out right away what investments are being made. And because these investors have publicly put their reputations on the line, the motivation for success is amplified.
A newly publicized bet comes from Barington Capital's stake in Darden Restaurants (DRI), a 2,100 chain of well-known restaurant brands such as Olive Garden, Red Lobster and LongHorn Steakhouse. Currently, DRI shares trade for about $50, the midpoint of the 52-week range and yields an impressive 4.4%. Barington and a group of investors that collectively own more than 2% of DRI are pushing for a split of the company. They see DRI as three entities: a chain consisting of the value brands Olive Garden and Red Lobster, another chain of high-growth concepts LongHorn and Capital Grille, and a company that owns the real estate as a real estate investment trust.
As an example, Carrols Restaurant Group's (TAST) split from fast-growing Fiesta Restaurant Group (FRGI) has been an enormous creator of value. Before the split, Carrols was trading for $13 to $14 per share. Today, TAST shares trade for $5.60 but FRGI shares trade near $40. So a split of Darden is a very intriguing idea worth watching.
Understand, however, that even investment pros can make bogeys. One of the more successful activists, Bill Ackman, hit the hazard with retailer J.C. Penney (JCP). Carl Icahn was unable to prevent Dell (DELL) from being bought out by its founder and namesake (although Icahn managed to pocket a few hundred million dollars while getting shareholders a higher takeout price).
It goes without saying that investment pros who last a long time have a winning batting average year after year. Let their talent, sophisticated operations and deep pockets ferret out good investment ideas for you.