This article is part of a series that provides ongoing analysis of changes to Nelson Peltz’s 13F portfolio on a quarterly basis. It is based on the Peltz regulation Form 13F filed on 02/11/2022. Please visit our Monitoring of Nelson Peltz’s Trian fund management portfolio article to get an idea of his investment philosophy and our Last update for fund movements during the third quarter of 2021.
This quarter, the value of Peltz’s 13F portfolio decreased by about 7%, from $8.04 billion to $7.46 billion. The number of holdings remained stable at 9. The top three holdings represent around 59% of the 13F equity portfolio: Ferguson plc, Janus Henderson Group plc and Invesco Ltd. To learn more about activist investing, see Deep Value: Why Activist Investors and Other Opponents Fight for Control of Losing Companies.
Note: It was reported last month that Trian Fund had created an active stake in Unilever plc (UL).
Janus Henderson Group plc (JHG): JHG is currently the second largest position with around 16% of the portfolio. It was established in Q2 2020 at prices between ~$14 and ~$26. The following quarter, participation doubled to about $20 average cost. There has been a roughly 73% increase in stake over the past three quarters at prices between ~$32 and ~$48.50. The stock is currently trading at $34.05.
Note: Trian Fund controls approximately 17% of the business. Nelson Peltz and Ed Garden were appointed to the board of directors of Janus Henderson Group on February 1st.
Invesco Ltd. (IVZ): The approximately 16% stake in IVZ was purchased in Q2 2020 at prices between $6.70 and $11.55. The next quarter, profit sharing increased by about two-thirds to about $11. This quarter also saw a roughly 25% increase in stake at prices between ~$21.75 and ~$26.50. The stock is now at $22.47.
Note: Trian Fund owns approximately 10% of Invesco. Nelson Peltz and Ed Garden left the Invesco board earlier this month (February).
General Electric (GE): GE’s position is ~5% of the 13F portfolio. The stake was established in the second quarter of 2015 and grew by approximately 83% the following quarter at an aggregate cost of approximately $160. Q4 2015 saw a decline of around 14% at prices between ~$200 and ~$250. The shares are currently trading well below their buy price ranges at $92.69. There was a ~45% sell off in Q3 2020 at around $50. Peltz realized losses. Recent quarters have seen a marginal increase.
Note 1: GE stock went through a 1 for 8 reverse split in August. The prices indicated above are adjusted.
Note 2: In October 2017, Trian won a seat on the board of General Electric. Shortly thereafter, longtime (16-year-old) CEO Jeff Immelt stepped down. John Flannery, the head of GE’s healthcare unit has been named the new CEO. In October 2018, Larry Culp (former CEO of Danaher) was named CEO.
The bet decreases:
Ferguson plc (FERG): FERG is currently the largest position in the portfolio at ~27%. This results from Ferguson’s double listing on the NYSE in early March. Trian’s position dates back to June 2019 when they acquired a roughly 6% stake in Ferguson plc. The position was not in 13F reporting as they bought the London listed shares which is not in 13F reporting. Their main thesis was that the Ferguson stock is mispriced because it is listed in the UK despite conducting all of its business in North America. The stock has doubled since their purchase and is currently trading at around $152. There has been around 15% selling over the past two quarters at prices between ~$140 and ~$181.
Sysco Corporation (SYY): SYY currently represents ~14% of the portfolio. It was bought in the second quarter of 2015 at prices between $36 and $39 and rose around 300% the following quarter at prices between $35.50 and $41.50. Recent activity follows. The position was reduced by around 25% in Q4 2018 at around $66.30 and another around 18% in Q2 2019 at around the same price. Over the past four quarters, an additional ~45% has sold at prices between ~$55 and ~$86. The stock is currently trading at $83.55. This quarter also saw a slight reduction of around 4%. They make gains.
Procter & Gamble (PG): The PG stake was established in Q4 2016 at prices between $82 and $90. The first quarter of 2017 saw a huge ~5x stake increase at prices between $83.50 and $92. There was a two-thirds sale in the second quarter of 2020 at around $115 per share. The last five quarters had seen another reduction of around 50% at prices between ~$121 and ~$145. This quarter saw the stake nearly sold out at prices between ~$139 and ~$164. The stock is currently trading at around $160.
Note: In July 2017, Trian launched a proxy fight for a seat on the P&G board of directors and called P&G’s corporate culture “stuffy bureaucracy.” A white paper soon followed proposing a reorganization under a “lean holding company” structure: a) beauty, beauty care and healthcare; (b) fabrics and home care; and (c) baby, woman and family care. Trian narrowly lost the proxy battle, but P&G still named Peltz to the company’s board. In June 2019, Peltz indicated that his reorganization plan was being “very seriously considered” by the company’s board of directors. A reorganization plan followed in November.
Mondelez International (MDLZ): MDLZ’s initial stake dates back to the fourth quarter of 2012, when over 19 million shares were purchased in the mid-20s price range. The following quarter saw a stake double in the under-30s price range. years. There was a sale of around 55% in the first quarter of 2018 at prices between $40.50 and $46. The first quarter of 2020 saw a reduction of around 15% to around $58 and this was followed by a sale of around 23% in the third quarter of 2020 at around the same price. Q1 2021 saw another ~25% sell at ~$56 per share. The last two quarters have also seen a reduction of around 15% to around $62 per share. This quarter, the stake was sold a tiny 0.40% of the portfolio position at prices between ~$58 and ~$66. The stock is currently trading at ~$66.
Note: Following the establishment of their stake in 2012, Trian pushed Mondelez to merge with PepsiCo, but this did not go through. In early 2014, Peltz acquired a seat on the board in a compromise deal with Mondelez. In March 2018, Nelson Peltz left the board and was replaced by Trian Chairman Peter May.
Comcast Corporation (CMCSA): CMCSA represents 13.49% of the portfolio position established in the second quarter of 2020 at prices between $32.50 and $43. The following quarter, the stake more than doubled at prices between ~$39 and ~$47. This was followed by a roughly 27% stake increase in Q4 2020 at prices between ~$41 and ~$52. The stock is currently trading at $46.64. Recent quarters have seen only minor adjustments.
Wendy’s Company (WEN): Wendy’s involvement dates back to 2005 when Trian Fund Management was established. The position has fluctuated over the years. Recent activity follows. There was a ~14% reduction in Q2 2017 to ~$15.97 and this was followed by a similar reduction in Q1 2018 to ~$16.50. There have been slight adjustments since. The stock is currently trading at $22.71. The position is now at 8.10% of the 13F portfolio.
Note 1: Family trusts related to Trian also own shares of Wendy’s. Including these, total ownership is approximately 42 million shares (~18% of the company).
Note 2: In December 2015, Matthew Peltz was added to Wendy’s Board of Directors. Nelson Peltz is the chairman of the board of directors (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 actions.