Would breaking up Darden help investors?

Shares surged Wednesday on talk of a breakup, and shareholders could find themselves with two separate, solid stocks after such a split.

By Motley Fool Investor Beat Oct 10, 2013 4:07PM
Customers walk into a Red Lobster restaurant in Hialeah, Fla. on Sept. 6, 2012 (c) Alan Diaz/AP PhotoShares of Darden Restaurants (DRI) -- owner of the Olive Garden and Red Lobster restaurant chains, among others -- were up Wednesday on the news that hedge fund Barrington Capital Group took a 2.8 percent stake in the company and would push it towards breaking up.

Motley Fool analyst Taylor "Ice Pick" Muckerman isn't surprised by a hedge fund taking an interest in Darden considering it's such a diversified company. But it may be that very  diversification that brings about a break-up; the company is composed of several quickly-growing restaurant franchises, as well as some more established businesses, and Taylor wouldn't be surprised to see the company separate those two parts.

According to Taylor, investors may want to buy shares now to avoid having to pay for two separate, solid companies after the breakup.
The Motley Fool's 12 top stocks for 2013 are now available! So if you're tired of picking stocks out of a hat and hoping that one skyrockets, check out Stocks 2013: The Investor's Guide to the Year Ahead. It's The Motley Fool's current top report, and includes Chief Investment Officer Andy Cross's top stock for 2013! This under-the-radar company is the secret winner in the war for the last precious drops of oil on the planet. Find out what it is and how you can take advantage of this unseen company's huge profits in this special, free report, just click here now.

More from Top Stocks:
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

113
113 rated 1
268
268 rated 2
422
422 rated 3
632
632 rated 4
512
512 rated 5
518
518 rated 6
682
682 rated 7
523
523 rated 8
343
343 rated 9
124
124 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
KOGKODIAK OIL & GAS Corp10
COPCONOCOPHILLIPS9
TAT&T Inc9
DVNDEVON ENERGY CORPORATION9
EOGEOG RESOURCES Inc9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.