Brian Baldwin (Trian) Long Ferguson: Sohn London Conference

We're posting up notes from the Sohn London investment conference.  Next up is Brian Baldwin of Trian Fund Management who presented a long of Ferguson (LON: FERG).


Brian Baldwin's Sohn London Conference Presentation

Trian disclosed a 5.2% stake in Ferguson in June 2019. It’s an activist investment and Trian has been in discussions with the board and management. Trian is the largest shareholder.

Ferguson’s main business is selling parts for plumbing and heating (80% of profits). They also sell waterworks and fire protection products (20% of profits). They have 1700 branches and 11 distribution centres in the US.

Plumbing products distribution is an attractive business in the US. Trian likes businesses that provide products at a fair price to their customers. Ferguson’s products cost much less than the labour costs to install them. Eighty percent of sales are done through their branches. Ferguson has the scale to get good prices from suppliers. Its scale also allows it to provide a wide range of products (100,000SKUs) to meet plumbers’ need.

Ferguson has used this scale to take 3-4 percentage points of market share per year over the last nine years. Revenue has been growing at over 9% CAGR for the last five years. EBIT at 11% CAGR over the same period. It is the market leader with 20% market share. There is still room for growth.

Ferguson announced that the remaining part of the UK business, Wolseley, would be divested just weeks after Trian disclosed their stake. At the same time, the CEO was replaced by the head of the US business, Kevin Murphy.

While the US business is a leader in a fragmented market the UK business operates in a less attractive consolidated market with several large players. Once Wolseley has been sold off, Ferguson will be a completely US business.

Ferguson’s main listing is on the London Stock Exchange. The company is not well known by US investors and is under-owned by US institutions. Trian are pressing for a listing on the NASDAQ.  European analysts misunderstand Ferguson because they focus too much on the UK operations.

Ferguson should be compared to other specialty distributors in the US. If Ferguson was listed in the US and traded in line with other specialty distributors its shares that sell for £68 today could be worth £105.


Be sure to check out the rest of the presentations from Sohn London conference 2019.

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.

Trian Partners Buys More Bank of New York Mellon (BK)

Nelson Peltz's activist investment firm Trian Partners has filed a Form 4 with the SEC regarding its position in Bank of New York Mellon (BK). 

Per the filing, Trian was buying 360,000 BK shares on March 9th at weighted average prices of $56.5188.  After this buy, Trian now owns over 16.12 million shares.

Per Google Finance, Bank of New York Mellon is "an investments company. The Company operates businesses through two segments: Investment Management and Investment Services. The Company also has an Other segment, which includes the leasing portfolio, corporate treasury activities (including its investment securities portfolio), derivatives and other trading, corporate and bank-owned life insurance and renewable energy investments, and business exits. As of December 31, 2016, the Company had $29.9 trillion in assets under custody and/or administration and $1.6 trillion in assets under management. The Company's Investment Management boutiques offer a range of actively managed equity, fixed income, alternative and liability-driven investments, along with passive products and cash management. The Company offers asset servicing, clearing services, issuer services and treasury services to its clients. "

Trian Partners Sells Some Mondelez

Nelson Peltz's activist firm Trian Fund Management has filed a Form 4 with the SEC regarding its stake in Mondelez (MDLZ).  Per the filing, Trian sold over 6.52 million shares of MDLZ at $43.67 on February 27th. 

The filing notes that this sale was "made for portfolio management purposes, including in connection with the liquidation of a fund" that acquired shares prior to the end of 2012.  After this sale, the firm still owns 35.96 million shares.

Per Google Finance, Mondelez is "a snack company. The Company manufactures and markets snack food and beverage products for consumers. It operates through four segments: Latin America, Asia, Middle East, and Africa (AMEA), Europe and North America. As of December 31, 2016, its brands spanned five product categories: Biscuits (including cookies, crackers and salted snacks); Chocolate; Gum and candy; Beverages (including coffee and powdered beverages), and Cheese and grocery. Itsportfolio includes various snack brands, including Nabisco, Oreo, LU and belVita biscuits; Cadbury, Milka, Cadbury Dairy Milk and Toblerone chocolate; Trident gum; Halls candy, and Tang powdered beverages. The Company sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and retail food outlets. As of December 31, 2016, it sold its products to consumers in approximately 165 countries. "

Trian Fund Reduces Bank of New York Mellon Stake

Nelson Peltz's Trian Fund Management has filed a Form 4 with the SEC regarding its stake in Bank of New York Mellon (BK).  Per the filing, Trian sold over 5.7 million shares across October 20th, 23rd, and 24th.

They exited shares at weighted average prices of around $53.13, but the bulk of their sale came at $52.22.  After these sales, Trian is left owning 16.56 million shares.

The filing notes that they sold for portfolio management purposes as one of the lock-up periods ended on one of their investment funds which solely held BK shares.

We also recently posted about another stock Trian was selling.

Per Google Finance, Bank of New York Mellon is "an investments company. The Company operates businesses through two segments: Investment Management and Investment Services. The Company also has an Other segment, which includes the leasing portfolio, corporate treasury activities (including its investment securities portfolio), derivatives and other trading, corporate and bank-owned life insurance and renewable energy investments, and business exits. As of December 31, 2016, the Company had $29.9 trillion in assets under custody and/or administration and $1.6 trillion in assets under management. The Company's Investment Management boutiques offer a range of actively managed equity, fixed income, alternative and liability-driven investments, along with passive products and cash management. The Company offers asset servicing, clearing services, issuer services and treasury services to its clients."

Trian Fund Sells Some Sysco

Nelson Peltz's activist firm Trian Fund Management has filed a Form 4 with the SEC regarding its stake in Sysco (SYY).  Per the filing, Trian sold 372,314 shares on September 12th and 13th at weighted average price of $53.0893.

After these transactions, Trian still owns over 43.59 million shares.  The filing notes this sale was made in conjunction with the liquidation of an investment fund managed by Trian.

For more from this firm, we recently posted up Trian's presentation on Procter & Gamble (PG).

Per Google Finance, Sysco is "a distributor of food and related products primarily to the foodservice or food-away-from-home industry. The Company's segments include Broadline, SYGMA and Other. The Broadline segment includes its Broadline operations located in the Bahamas, Canada, Costa Rica, Ireland, Mexico and the United States. Broadline operating companies distribute a full line of food products and a range of non-food products to both traditional and chain restaurant customers, hospitals, schools, hotels, industrial caterers and other venues where foodservice products are served. SYGMA operating companies distribute a full line of food products and a range of non-food products to certain chain restaurant customer locations. The Other segment includes the Company's specialty produce; custom-cut meat operations; lodging industry segments; a company that distributes specialty imported products; a company that distributes to international customers, and Sysco Ventures platform."

Trian Partners' Procter & Gamble Presentation: Revitalize P&G Together

Nelson Peltz's activist firm Trian Partners recently put together a slide deck on their Procter & Gamble (PG) position entitled "Revitalize P&G Together."

They note that organic sales growth has underperformed peers such as Unilever, Reckitt Benckiser, Henkel, Arm & Hammer, and others.  Also, volume growth has trailed peers like Clorox, Church & Dwight, etc.

Trian's initiatives for the company include regaining lost market share, ensure management's productivity plan delivers results, develop small mid-size local brands, make M&A a growth strategy, win in digital, and improve corporate governance.

They outline their plan for the company and highlight all the issues the company is facing in their slidedeck.

Embedded below is Trian Partners' presentation on P&G:



You can download a .pdf copy here.

Trian Fund Management Sells Some Mondelez

Nelson Peltz's activist firm Trian Fund Management has filed a Form 4 with the SEC regarding its stake in Mondelez (MDLZ). 

Per the filing, Trian sold 3.8 million MDLZ shares on November 1st, 2nd, and 3rd at prices ranging from $43.29 to $45.22.  After these transactions, Trian still owns 44.21 million shares of Mondelez.

If you missed it, we also posted a recent interview with Nelson Peltz who isn't as cautious as others about the market.

Per Google Finance, Mondelez is "a snack company. The Company manufactures and markets snack food and beverage products for consumers in approximately 165 countries around the world. The Company operates through five segments: Latin America; Asia Pacific; Eastern Europe, Middle East, and Africa (EEMEA); Europe, and North America. Its portfolio includes over seven brands, including Nabisco, Oreo and LU biscuits; Cadbury, Cadbury Dairy Milk and Milka chocolates, and Trident gum, as well as over 50 brands. The Company's brands span five product categories: biscuits (including cookies, crackers and salted snacks); chocolate; gum and candy; beverages (including coffee and powdered beverages), and cheese and grocery. The Company's other brands include Oreo, Chips Ahoy!, Ritz, TUC/Club Social and belVita biscuits; Cadbury Dairy Milk, Milka and Lacta chocolate; Trident gum; Hall's candy, and Tang powdered beverages."

Ed Garden Long Bank of New York Mellon: Invest For Kids Chicago 2016

We're posting up notes from the Invest For Kids 2016 investment conference.  Next up is Ed Garden of Trian Partners who pitched a long of Bank of New York Mellon (BK).


Ed Garden's Presentation at Invest For Kids Chicago 2016

•    Long Bank of New York Mellon (BK)

o    $1.3 billion invested; Garden on board since Dec. 2014

•    We invest in great companies when undermanaged, underperforming, underappreciated; we try to work with management to become best in class at everything; we usually take a board seat

o    Eliminate management’s information advantage over board

o    Find problems, identify opportunities to attack

•    No hedging, long only, dislike the activist label

o    Income statement focus, not balance sheet

•    BK fits our risk profile: provides critical infrastructure, has good capital, is fee-driven (not NIM driven), has huge scale, and has opportunity to improve operations with cyclical upside as a bonus

•    Progress so far: 9% reduction in real estate owned; leaner cost structure; five new board members; returning $2.75 per share to shareholders in 12 months ended 6/30/17; margins and EPS up

•    25% discount to the market valuation; hurts to have “bank” in our name; most earnings streams at cyclical trough


Be sure to check out the rest of the presentations from Invest For Kids 2016.

Nelson Peltz Not As Cautious As Others, Talks General Electric

Nelson Peltz of Trian Partners appeared on CNBC today and gave his view on the market and his holding General Electric (GE).

Peltz said that "I think Wall Street is talking themselves into a negative environment, and I think they're almost doing it unnecessarily."  He says earnings have been pretty good but revenue's been hard to get, but companies are realizing how much cost they can take out.


"I'm not a macro guy, but I think my portfolio's cheap.  I think you're gonna see a little growth in Europe this year for the first time."  He says Latin America is a problem, Europe is getting better, but 'who knows' on China.

On General Electric (GE), his largest holding, Peltz noted that GE has been a good performer since last year and he thinks "it's the best set of industrial assets on the planet.  85-90% of their revenue today is service revenue and if you look at the business peak to trough through the great recession and if you look at the businesses in there today, earnings were down 5%."

He doesn't know what the quarter's earnings are gonna be but he doesn't seem to care as he's "in this thing for a longtime."

Peltz also touched on Pepsi (PEP), which he's now out of.  They took $1 billion a year in costs out for 3 years in a row. 

On shareholder activism, Peltz floated an idea of 'private equity in public markets' where long-term owners hold stocks for longer periods of time while enacting positive change and helping a business grow.

He thinks Hillary Clinton wins the election and the market could stay where it is, unless she takes both Houses and then it'd go down.

We'll post up the video of the interview once it's released.  Be sure to also check out CNBC's interview with David Tepper from yesterday, as well as their conversation with Carl Icahn.

Trian Fund Updates Stakes in Sysco & Bank of New York Mellon

Nelson Peltz's activist firm Trian Fund Management has made some SEC filings recently.

Peltz Acquires Acquires Sysco Shares

First, in an amended 13D with the SEC regarding their position in Sysco (SYY), Trian disclosed it now owns 7.8% of Sysco with 43.95 million shares. 

Per a Form 4 filed with the SEC, Trian acquired 520,000 shares on June 3rd at a weighted average price of $48.7874 and 173,000 more shares on June 6th at $48.8295 (weighted average).

Per Google Finance, Sysco "along with its subsidiaries and divisions, is a North American distributor of food and related products primarily to the foodservice or food-away-from-home industry. The Company provides products and related services to approximately 425,000 customers, including restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers. Sysco provides food and related products to the foodservice or food-away-from-home industry. The Company has aggregated its operating companies into a number of segments, of which only Broadline and SYGMA are the main segments. Broadline operating companies distribute a line of food products and a variety of non-food products to their customers. SYGMA operating companies distribute a line of food products and a variety of non-food products to chain restaurant customer locations. The Company’s other segments include its specialty produce, custom-cut meat and lodging industry products segments."


Trian Buys More Bank of New York Mellon

Second, Peltz's firm also filed a separate Form 4 with the SEC regarding its stake in Bank of New York Mellon (BK).  They acquired 370,000 shares on June 6th at a weighted average price of $42.3905. 

After this buy, they now own over 32.21 million shares.

Per Google Finance, Bank of New York Mellon is "an investments company. The Company operates businesses through two segments: Investment Management and Investment Services. The Company also has an Other segment, which includes credit-related services; the leasing portfolio; corporate treasury activities, including its investment securities portfolio; its equity interest in ConvergEx Group; business exits, and corporate overhead. The Company has over $1.6 trillion in assets under management. BNY Mellon's subsidiaries include The Bank of New York Mellon and BNY Mellon, National Association (BNY Mellon, N.A.). The Bank of New York Mellon is a New York state-chartered bank, which houses its Investment Services businesses, including Asset Servicing, Issuer Services, Treasury Services, Broker-Dealer and Advisor Services, as well as the bank-advised business of Asset Management."

Trian Fund Buys More Bank of New York Mellon

Nelson Peltz's activist firm Trian Fund Management has filed a Form 4 with the SEC regarding its stake in Bank of New York Mellon (BK).  Per the filing, Trian acquired 20,700 shares of BK on May 16th at a weighted average price of $39.6531. 

After this transaction, they now own over 31.84 million shares of BK.  As we've previously highlighted, Trian was buying BK around these levels last year as well.

Per Google Finance, Bank of New York Mellon is "a provider of financial products and services in domestic and international markets. Through its two principal businesses, Investment Management and Investment Services, it serves institutions, corporations and high net worth individuals. For institutions and corporations, it provides investment management, trust and custody, foreign exchange, fund administration, global collateral services, securities lending, depositary receipts, corporate trust, global payment/cash management, banking services and clearing services. For individuals, it provides mutual funds, separate accounts, wealth management and private banking services. BNY Mellon’s investment management businesses provide investment products in different asset classes and investment styles."  Read more: http://www.marketfolly.com/search?q=bk&max-results=20&by-date=true#ixzz49amsK8Mj

Trian Partners Boosts Pentair & Bank of New York Mellon Stakes

Nelson Peltz's activist investment firm Trian Fund Management has submitted two filings to the SEC recently.

First, per a Form 4 filed with the SEC, Trian Fund Management has increased its stake in Pentair (PNR).  Per the filing, Trian acquired 265,000 shares on October 22nd at weighted average prices of between $54.7093 and $56.2684.

After these buys, Trian now owns over 13.27 million shares of PNR.

Second, per another Form 4, Peltz's firm has purchased 285,000 shares of Bank of New York Mellon (BK) on October 21st at a weighted average price of $41.3396.  After these purchases, Trian now owns over 30.51 million shares of BK.

For more on this fund, we also posted up Trian's presentation on its new stake in General Electric.

Per Google Finance, Bank of New York Mellon is "a provider of financial products and services in domestic and international markets. Through its two principal businesses, Investment Management and Investment Services, it serves institutions, corporations and high net worth individuals. For institutions and corporations, it provides investment management, trust and custody, foreign exchange, fund administration, global collateral services, securities lending, depositary receipts, corporate trust, global payment/cash management, banking services and clearing services. For individuals, it provides mutual funds, separate accounts, wealth management and private banking services. BNY Mellon’s investment management businesses provide investment products in different asset classes and investment styles."

Per the company's website, Pentair is "a global water, fluid, thermal management, and equipment protection partner."

Nelson Peltz's Trian Fund Presentation on Their New Stake in General Electric

Nelson Peltz's investment firm Trian Partners has disclosed a new stake in General Electric (GE).  Trian now apparently owns 98.5 million shares of GE worth around $2.5 billion.

Trian's amended 13F filed with the SEC for the second quarter now shows that they owned 49.6 million shares of GE at the end of June.   

Of the stake, Peltz said that "We invested in GE because it is undervalued and underappreciated by the market despite what we believe is a transformation that will allow its world-class industrial businesses to drive attractive shareowner returns.  Our recent discussions with Jeff and his team have solidified our belief that they are highly motivated to fully deliver on GE's transformation and share much common ground with Trian on ways to improve long-term shareowner value."

Trian's Ed Garden also added, "Trian believes GE has significant long-term potential and that its implied target value per share, including dividends, could be $40 to $45 by the end of 2017 based on our view that GE can deliver EPS of at least $2.20 in 2018. We believe that the strategy of GE management and the board is broadly in line with our recommendations and we look forward to continuing to interact with management as GE works to expand operating margins, drive organic growth, increase capital efficiency and execute a disciplined capital allocation strategy.”


Trian's Presentation on General Electric

Embedded below is their presentation on GE:



You can download a .pdf copy here.

For more on this firm, head to Trian's recent portfolio activity.

Trian Fund Takes Activist Pentair Stake

Nelson Peltz's activist firm Trian Fund Management has filed a 13D with the SEC regarding shares of Pentair (PNR).  Per the filing, Trian now owns 7.24% of the company with over 13 million shares.

This is a brand new stake for Trian as they didn't own any shares as of the end of the first quarter.  The filing notes that they've engaged management already. 

They were out buying shares in May and June at prices between $61.9163 and $64.3024.  The firm also entered into call and put transactions (May 2016 and June 2018 calls).

Trian wants Pentair to expand via acquisitions and the Wall Street Journal has more color on their thinking here.

We've also recently highlighted other portfolio activity from Trian here.

Per Yahoo Finance, Pentair is "operates as a diversified industrial manufacturing company in the United States, Europe, and internationally. The company operates through Valves & Controls, Technical Solutions, Flow & Filtration Solutions, and Water Quality Systems segments. It designs, manufactures, markets, and services valves, fittings, automation and controls, and actuators, as well as provides engineering, design, inspection, maintenance, and repair services."

Trian Fund Trims Wendy's Position

Nelson Peltz's activist firm Trian Fund Management has filed an amended 13D with the SEC regarding their stake in Wendy's (WEN).  Per the filing, Trian now owns 15.85% of the company with over 57.6 million shares

This is a reduction in their position size by over 7 million shares.  Trian sold shares on June 18th at a price of $11.37 in a private transaction with the company.  Peltz and his family also own additional WEN shares and were out trimming their positions as well.  This is not necessarily new news, as we previously highlighted how Trian was planning to reduce its WEN stake.

The filing notes that, "The number of shares Trian Group plans to sell is designed to result in at least a 20% reduction of the Trian Group's ownership of Common Stock in order to avoid adverse federal income tax consequences."

Per Google Finance, Wendy's is "the parent company of its wholly owned subsidiary holding company Wendy’s Restaurants, LLC (Wendy’s Restaurants). Wendy’s Restaurants is the parent company of Wendy’s International, LLC (Wendy’s), which is the owner and franchisor of the Wendy’s restaurant system in the United States. Wendy’s is the quick-service restaurant company in the hamburger sandwich segment. Wendy’s is primarily engaged in the business of operating, developing and franchising a system of distinctive quick-service restaurants serving food. Wendy’s Restaurants is the parent company of Wendy’s International, LLC (Wendy’s), which is the owner and franchisor of the Wendy’s restaurant system in the United States."

Peltz's Trian Fund Reduces Wendy's Stake

Nelson Peltz's activist investment firm Trian Partners recently filed a 13D with the SEC regarding their stake in Wendy's (WEN).  Per the filing, they will be reducing their Wendy's (WEN) stake.  The company is buying back shares, including $211 million from Trian.

Trian's plan is to reduce their stake in Wendy's down from their current almost 25% to between 17% and 19.68% in the next couple of months.  In addition to selling shares in the buyback program, they'll also divest shares via the open market or other transactions.

Per Google Finance, Wendy's is "a quick-service restaurant company in the hamburger sandwich segment."

Nelson Peltz & Trian Partners' Presentation on DuPont

Nelson Peltz's activist investment firm Trian Partners has been involved with shares of duPont (DD) for a little while now and recently released a presentation entitled "A Referendum on Performance and Accountability"

Embedded below is Trian Partners' presentation "DuPont Can Be Great":



You can download a .pdf copy here.

Peltz's Trian Fund Trims Family Dollar Stake

Nelson Peltz's activist investment firm Trian Fund Management has filed an amended 13D with the SEC regarding their position in Family Dollar (FDO).  Per the filing, Trian now owns 2.07% of the company with over 2.36 million shares.

This means they've reduced their position size by over 6 million shares since the end of the third quarter.  The filing was made due to activity on January 26th. 

FDO recently agreed to a deal with Dollar Tree (DLTR) and Trian has already reduced its investment.