StoneMor Partners (STON) is one of the country's largest death care companies, operating 307 cemeteries and 105 funeral homes. The company sells death care products (e.g., cemetery plots, coffins and headstones) and services to people when someone dies (at-need) and also ahead of time (pre-need).
The company does not have access to all the proceeds from pre-need sales immediately. Most sales are on an installment basis, and different state regulations require the company to set aside a portion of the proceeds in a trust until the customer has died. In addition, StoneMor is the only publicly-traded death care company structured as a master limited partnership.
Investor Greg Taxin of Luma Asset Management has been on the front lines of more than 40 activist investments , including WetSeal, NutriSystem (NTRI), and Chico's (CHS). Taxin has taken a short position in StoneMor Partners because he believes the company is being overvalued by investors due to complex financial engineering. Luma's full presentation on StoneMor can be read here.
StoneMor Partners says it has addressed these issues before and directed Yahoo Finance to its press releases, financial statements, and track record of paying out quarterly distributions for more than 40 quarters in a row.
In terms of StoneMor stock, there is not much institutional ownership, but retail investors chasing yield have been drawn to its return of more the 8.5%.
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