Could Activists Propel Famous Dave's Stock?
Famous Dave's stock languished last year and hasn't done much since the mid-2000s, but this could be the Minneapolis-based chain's year, though not necessarily for anything it's doing yet. The reason? The company has some activist investors.
The newest activist to the stock is Patrick Walsh, who has targeted Red Robin and Denny's in the past, among other companies. Walsh's Chicago-based Atlas Fund controls 9.6 percent of Famous Dave's stock, and late last month the fund officially nominated Walsh to the Famous Dave's board.
Say what you will, but activists boost a company's stock, often by lighting a fire under management whose changes yield positive results and boost the price of shares. Stock prices typically rise 16 percent in the 15 months an activist investor holds onto a company's stock. Indeed, one restaurant industry analyst told us privately this week that he thinks Famous Dave's could be among the top stocks this year simply because of Walsh's involvement.
Dave's stock could probably use the boost, too. The company's stock fell by about $1 a share, or 10.8 percent, in 2012. Indeed, Dave's stock is up 8 percent since the Atlas Group submitted an SEC filing revealing its nomination of Walsh to the board. The chain recently revealed its plan to award stock to executive officers only if they reach certain earnings targets a move that, coincidentally or not, is the type of thing activists love.