Iridian Asset Management was founded in 1996 by David Cohen and Harold Levy, with the goal of profiting from market inefficiencies in the wake of corporate change. The fund’s investment philosophy is grounded in the fact that the market occasionally fails to factor in the long-term implications of dramatic structural changes in a company. Once drawn to these stocks, the fund then employs its bottom-up, value-based, fundamental research approach to identify the targets that are most likely to benefit from these transitions long-term. The fund had $15.7 billion in assets under management on March 31, at which time its public equity portfolio contained $11.76 billion in holdings. The fund’s unique strategy warrants a look at its top holdings, which we’ll do in this article.
Today there are dozens of tools investors can use to grade their holdings. A duo of the most under-the-radar tools are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can trounce their index-focused peers by a very impressive margin (see the details here).
#5 Tyson Foods, Inc. (NYSE:TSN)
– Shares Owned by Iridian (as of March 31): 7.63 Million
– Value of Holding (as of March 31): $508.75 Million
Iridian’s Tyson Foods, Inc. (NYSE:TSN) position constituted about 2.6% of the food production company’s outstanding float after being slashed by 20% in the first quarter. Tyson Foods, Inc. (NYSE:TSN) not only managed to beat both the top and bottom-line estimates with its financial results for the second quarter of fiscal year 2016, ending March 31, it also emerged victorious from its legal battle with Parks LLC over the use of the phrase ‘Park’s Finest’ to describe a line of hot dogs made by Tyson’s Hillshire Brands unit. Shares of Tyson Foods have rallied by a hefty 28% this year on the bevy of positive news. First Eagle Investment Management, led by Mehdi Mahmud, also reduced its stake in Tyson Foods during the first quarter, by 7% to 2.8 million shares.
#4 Wyndham Worldwide Corporation (NYSE:WYN)
– Shares Owned by Iridian (as of March 31): 6.68 Million
– Value of Holding (as of March 31): $510.67 Million
Iridian’s Wyndham holding was trimmed by 2% during the first quarter and represented about 4.3% of the fund’s equity portfolio on March 31. Wyndham’s stock surged from early-February through mid-March, kickstarted by the company’s fourth quarter results released on February 9. However, it wasn’t as lucky with its recently released first quarter results, which sent shares down by almost 10% on April 26. Wyndham Worldwide Corporation (NYSE:WYN) reported earnings of $1.12 per share on revenue of $1.3 billion for the quarter, beating EPS estimates by $0.01, but missing revenue expectations by $10 million. While the hotel brand is about to lose its grip on being the largest in the world once the Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT)/Marriott International Inc (NASDAQ:MAR) merger is completed later this year, analysts still believe the company has room for growth. David Harding‘s Winton Capital Management held about 221,000 shares of Wyndham Worldwide Corporation (NYSE:WYN) after reducing its stake by 52% during the March quarter.
Iridian’s top-3 stock picks are analyzed on the second page.