In its latest 13F filing with the U.S. Securities and Exchange Commission, Nelson Peltz’s Trian Partners disclosed its top 3 picks for the fourth quarter of 2014. According to the information provided by the activist hedge fund, its largest holding during this period was E I Du Pont De Nemours And Co (NYSE:DD). The position represents 19% of the firm’s equity portfolio and amounts to 24.3 million shares of the company’s stock. The other two equities Trian Partners is betting on are PepsiCo, Inc. (NYSE:PEP) and Mondelez International Inc (NASDAQ:MDLZ).
Trian Partners is an alternative investment management firm, which was founded by Nelson Peltz, Peter May, and Ed Garden in 2005. The hedge fund tends to invest in undervalued and underperforming companies, engaging with management and making proposals, in order to unlock additional shareholder value. According to investment firm, this can be achieved through a combination of improved operational execution, strategic re-direction, and a more efficient allocation of capital. This activist investment approach has allowed Trian Partners to build an equity portfolio valued at around $9.4 billion. Furthermore, the fund tends to invest in companies operating in the financial, consumer goods, and service industry.
Trian Partners was particularly bullish regarding E I Du Pont De Nemours And Co (NYSE:DD) last quarter. In addition to raising its stake in the company by more than 17.3 million shares, the activist hedge fund nominated four candidates to the Board of Directors. Mr. Peltz’s firm initiated a position in the equity in the second quarter of 2013 and has been increasing its exposure ever since. Its investment seems to have paid off, as the stock gained around 30% during this period. E I Du Pont De Nemours And Co (NYSE:DD) is a provider of numerous agricultural products, including soybean, canola, and corn hybrid, as well as herbicides, fungicides, and insecticides. Furthermore, the science and technology company manufactures various electronic materials and performance chemicals. Apart from Trian Partners, this stock is held by numerous institutional investors, including John A. Levin’s Levin Capital Strategies, which disclosed a position of 1 million shares during the third quarter.
PepsiCo, Inc. (NYSE:PEP) is the second-largest position in Trian Partners’ equity portfolio with 17.8 million shares. The hedge fund did not alter its stake in the company last quarter, yet displayed optimism regarding the stock by maintaining its significant exposure. Much to the delight of Mr. Peltz’s firm, the beverage behemoth’s shares gained around 18% in 2014.
In addition to Trian Partners, several other hedge funds disclosed holding shares of PepsiCo, Inc. (NYSE:PEP) in their equity portfolio. Donald Yacktman’s Asset Management for example owns more than 29 million shares, it the largest institutional shareholder amongst the hedge funds we follow. Boykin Curry’s Eagle Capital Management is also bullish regarding the stock, with a position amounting to 8.8 million shares.
Trian Partners’ top 3 picks would not be complete without Mondelez International Inc (NASDAQ:MDLZ). After increasing its exposure to the company by around 4.5 million shares last quarter, the hedge fund disclosed a position of 46 million shares, accounting for 17.8% of its equity portfolio. Compared to the firm’s other two top picks, this was the worst-performing stock, only gaining around 5% in 2014.
Mondelez International Inc (NASDAQ:MDLZ) has not been delivering great results as of late, partially due to a slowdown in emerging markets, along with a slide in coffee prices. As the company struggled to increase revenue, management was forced to reduce the top-line outlook for 2014 twice, thus suggesting category growth will not improve in the near future. Nevertheless, Trian Partners remained bullish throughout the fourth quarter, increasing its stake in the snack food and beverage products manufacturer by 10%. The activist hedge fund was not the only institutional shareholder of Mondelez stock; Mason Hawkins’ Southeastern Asset Management disclosed a holding amounting to 30.6 million shares, representing 5.7% of its equity portfolio. Eagle Capital Management is also betting on this stock, with a position of 21.9 million shares that account for almost 3% of its total equity portfolio.
Disclosure: Pablo Erbar holds no position in any stocks or funds mentioned.
