This article is part of a series that provides an ongoing analysis of the changes made to Nelson Peltz’s 13F portfolio on a quarterly basis. It is based on Peltz’s regulatory 13F Form filed on 2/11/2022. Please visit our Tracking Nelson Peltz’s Trian Fund Management Portfolio article for an idea on his investment philosophy and our last update for the fund’s moves during Q3 2021.
This quarter, Peltz’s 13F portfolio value decreased ~ 7% from $ 8.04B to $ 7.46B. The number of holdings remained steady at 9. The top three holdings are at ~ 59% of the 13F stock portfolio: Ferguson plc, Janus Henderson Group plc, and Invesco Ltd. To know more about activist investing, check out Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations.
Note: It was reported last month that Trian Fund has built an activist stake in Unilever plc (UL).
Janus Henderson Group plc (JHG): JHG is currently the second-largest position at ~ 16% of the portfolio. It was established in Q2 2020 at prices between ~ $ 14 and ~ $ 26. Next quarter saw the stake doubled at ~ $ 20 average cost-basis. There was a ~ 73% stake increase over the last three quarters at prices between ~ $ 32 and ~ $ 48.50. The stock currently trades at $ 34.05.
Note: Trian Fund controls ~ 17% of the business. Nelson Peltz and Ed Garden were appointed to Janus Henderson Group’s board on February 1st.
Invesco Ltd. (IVZ): The ~ 16% IVZ stake was purchased in Q2 2020 at prices between $ 6.70 and $ 11.55. Next quarter saw the beneficial stake increased by roughly two-thirds at ~ $ 11. This quarter also saw ~ 25% stake increase at prices between ~ $ 21.75 and ~ $ 26.50. The stock is now at $ 22.47.
Note: Trian Fund has a ~ 10% ownership stake in Invesco. Nelson Peltz and Ed Garden stepped down from Invesco’s board earlier this month (February).
General Electric (GE): The GE position is at ~ 5% of the 13F portfolio. The stake was established in Q2 2015 and increased by ~ 83% the following quarter at an overall cost-base of ~ $ 160. Q4 2015 saw a ~ 14% trimming at prices between ~ $ 200 and ~ $ 250. The stock currently trades well below their purchase price ranges at $ 92.69. There was a ~ 45% selling in Q3 2020 at ~ $ 50. Peltz realized losses. Last few quarters have seen a marginal increase.
Note 1: GE stock had a 1-for-8 reverse stock split in August. The prices quoted above are adjusted.
Note 2: In October 2017, Trian won a board seat at General Electric. Soon after, long-time (16 years) CEO Jeff Immelt stepped down. John Flannery, the head of GE’s healthcare unit was named as the new CEO. In October 2018, Larry Culp (formerly CEO at Danaher) was named the CEO.
Ferguson plc (FERG): FERG is currently the largest position in the portfolio at ~ 27%. It came about as a result of Ferguson’s dual-listing in NYSE in early March.Trian’s position goes back to June 2019 when they acquired a ~ 6% ownership interest in Ferguson plc. The position was not in the 13F reports as they purchased the shares listed in London which is not in the realm of 13F reports. Their primary thesis was that Ferguson stock is mispriced due to it being listed in UK despite conducting all of its business in North America. The stock has doubled since their purchase, and it currently trades at ~ $ 152. There was a ~ 15% selling over the last two quarters at prices between ~ $ 140 and ~ $ 181.
Sysco Corporation (SYY): SYY is currently at ~ 14% of the portfolio. It was purchased in Q2 2015 at prices between $ 36 and $ 39 and increased by ~ 300% the following quarter at prices between $ 35.50 and $ 41.50. Recent activity follows. The position was reduced by ~ 25% in Q4 2018 at ~ $ 66.30 and by another ~ 18% in Q2 2019 at around the same price. Last four quarters had seen another ~ 45% selling at prices between ~ $ 55 and ~ $ 86. The stock currently trades at $ 83.55. This quarter also saw a minor ~ 4% trimming. They are realizing gains.
Procter & Gamble (PG): The PG stake was established in Q4 2016 at prices between $ 82 and $ 90. Q1 2017 saw a huge ~ 5x stake increase at prices between $ 83.50 and $ 92. There was a two-thirds selling in Q2 2020 at ~ $ 115 per share. Last five quarters had seen another ~ 50% reduction at prices between ~ $ 121 and ~ $ 145. This quarter saw the stake almost sold out at prices between ~ $ 139 and ~ $ 164. The stock currently trades at ~ $ 160.
Note: In July 2017, Trian launched a proxy fight for a board seat at P&G and termed P & G’s business culture a “suffocating bureaucracy”. A whitepaper soon followed proposing a re-organization under a “lean holding company” structure: a) beauty, grooming and healthcare; b) fabric and home care; and c) baby, feminine and family care. Trian narrowly lost the proxy battle, but P&G still appointed Peltz to the company’s board. In June 2019, Peltz indicated his reorganization plan is “under very serious consideration” by the company’s board. A reorganization plan followed in November.
Mondelez International (MDLZ): The original MDLZ stake was from Q4 2012 when over 19M shares were purchased in the mid-20s price-range. The following quarter saw a stake-doubling in the low-30s price-range. There was a ~ 55% selling in Q1 2018 at prices between $ 40.50 and $ 46. Q1 2020 saw a ~ 15% trimming at ~ $ 58 and that was followed with a ~ 23% selling in Q3 2020 at around the same price. Q1 2021 saw another ~ 25% selling at ~ $ 56 per share. Last two quarters also saw a ~ 15% reduction at ~ $ 62 per share. This quarter saw the stake sold down to a minutely small 0.40% of the portfolio position at prices between ~ $ 58 and ~ $ 66. The stock currently trades at ~ $ 66.
Note: Following their stake establishment in 2012, Trian pushed Mondelez for a merger with PepsiCo but that did not pan out. In early 2014, Peltz acquired a board-seat in a compromise agreement with Mondelez. In March 2018, Nelson Peltz left the board and was replaced by Trian’s president Peter May.
Comcast Corporation (CMCSA): CMCSA is a large 13.49% of the portfolio position established in Q2 2020 at prices between $ 32.50 and $ 43. Next quarter saw the stake more than doubled at prices between ~ $ 39 and ~ $ 47. That was followed with a ~ 27% stake increase in Q4 2020 at prices between ~ $ 41 and ~ $ 52. The stock currently trades at $ 46.64. Last few quarters have seen only minor adjustments.
Wendy’s Company (WEN): The Wendy’s stake goes back to 2005 when Trian Fund Management was founded. The position has fluctuated over the years. Recent activity follows. There was a ~ 14% reduction in Q2 2017 at $ 15.97 and that was followed with a similar reduction in Q1 2018 at ~ $ 16.50. There has been minor trimming since. The stock currently trades at $ 22.71. The position is now at 8.10% of the 13F portfolio.
Note 1: Family trusts connected to Trian also own shares of Wendy’s. Including those, the total ownership is at ~ 42M shares (~ 18% of the business).
Note 2: In December 2015, Matthew Peltz was added to Wendy’s board. Nelson Peltz is the Chairman of the Board (non-executive chairman since June 2007).
The spreadsheet below highlights changes to Peltz’s 13F stock holdings in Q4 2021:
Editor’s Note: This article discusses one or more securities that do not trade on a major US exchange. Please be aware of the risks associated with these stocks.