Yum! Brands, Inc. (NYSE:YUM), Fidelity National Financial Inc (NYSE:FNF), Platform Specialty Products Corp (NYSE:PAH), and B/E Aerospace Inc (NASDAQ:BEAV) are among the top picks of the well-known activist investor Keith Meister‘s Corvex Capital. Since following activists into some of their top picks can be a good strategy to beat the market, let’s take a closer look at Corvex’s investments in these companies and assess the general hedge fund sentiment towards them.
Before we get to the companies, in question, let’s take a closer look at the fund. Corvex Capital was founded in 2011 by Keith Meister, the former right hand of billionaire activist Carl Icahn. At the end of June, the fund had an equity portfolio worth $7.44 billion. Some 65% of the portfolio was equally invested in Consumer Discretionary and Financial sectors. According to our analysis of Corvex’s equity portfolio, out of 24 long positions, 22 were represented by companies worth at least $1.0 billion and these holdings posted a weighted average return of 11.12% during the third quarter, based on the size of these positions at the end of June.
Yum! Brands, Inc. (NYSE:YUM), which was Corvex’s top pick at the end of June, was also one of the fund’s most profitable investments, as the stock gained 10.1% during the third quarter. The fund entered the period with an $1.74 billion stake containing 21.04 million shares. Overall, 46 funds tracked by us held shares of Yum! Brands, Inc. (NYSE:YUM) at the end of June, down by five funds over the quarter. Corvex was the top shareholder, followed by Lone Pine Capital with a $826.9 million position. Other investors bullish on the company included Soroban Capital Partners, Third Point, and AQR Capital Management.
Then there’s is Fidelity National Financial Inc (NYSE:FNF), in which Corvex held 18.82 million shares worth $705.64 million at the end of June. In the following three months, the stock inched down by 1%. During the second quarter, the number of funds from our database long Fidelity National Financial Inc (NYSE:FNF) declined by 11% to 39. Here too, Corvex held the largest stake and trailing it was Orbis Investment Management, which amassed a stake valued at $150.2 million. OZ Management, Roystone Capital Partners, and Bloom Tree Partners also held valuable positions in the company.