Ed Garden Long PPG Industries: Capitalize For Kids Conference 2018

We're posting up notes from the Capitalize For Kids 2018 investment conference.  Next up is Ed Garden of Trian Fund Management who pitched a long of PPG Industries (PPG).


Ed Garden's Capitalize For Kids Presentation: Long PPG Industries

PPG Industries

•    Paints and coatings business
•    Great business, 40% upside on SOTP
•    No tech disruption risk, AMZN risk, private label risk. Strong moat
•    We are facing an inflationary time, great time to buy as they pass on inflation, increasing gross margin
•    Terrible management, lost key customer (Lowe’s), Materially underperforming peers, market on all metrics, Profit warnings, shrinking earnings while peers are growing earnings
•    Accounting issues, May 2018 – says 10-K can’t be relied upon due to expense accrual issues
•    Did a stupid Hostile acquisition, massively flawed strategy

Trian's Solution

•    Bring back legendary CEO Chuck Bunch
•    Best CEO in coatings, never sold his stock, wants to return
•    Had 40 year career at PPG.  Large growth in North American Architectural. Needs Capital and Attention
•    Wants it to be spun off
•    Add leverage to business
•    Improve Governance
•    Chuck had outperformed peers by 4,700bps over tenure    


Be sure to check out the rest of the presentations from Capitalize For Kids 2018. 

Trian Partners Discloses PPG Industries Stake

Nelson Peltz's Trian Partners has filed an amended 13F with the SEC.  In it, they reveal a new position in PPG Industries (PPG).  As of the end of the second quarter, they owned 2.59 million shares. 

They had previously disclosed this information privately to the SEC and requested confidential treatment. 

It's unclear what their position size is currently, and we won't see it until they update their 13F as of the end of the third quarter.  That filing will come in mid-to-late November. 

The paints and coatings company recently reported earnings and guidance, and shares sold off sharply on the news.