This article discusses the top 4 stock picks of billionaire Nelson Peltz’s Trian Partners at the end of June 2022. To know more about Mr Peltz’s journey, his activist stakes, and recent changes Trian Partners made to its portfolio, please check out 8 Best Stocks to Buy According to Billionaire Nelson Peltz.
4. Sysco Corporation (NYSE:SYY)
Trian Partners’ Stake Value: $744,868,000
Percentage of Trian Partners’ 13F Portfolio: 16.37%
Number of Hedge Fund Holders: 32
Sysco Corporation (NYSE:SYY) has been one of the best-performing stock picks of Trian Partners in the last few years. Since the fund disclosed initiating a stake in the food services company in the second quarter of 2015, Sysco Corporation’s (NYSE:SYY) stock has more than doubled. The results are even more phenomenal if one includes the dividend returns from the company since then. Sysco Corporation (NYSE:SYY) currently pays an annual dividend of $1.96 per share, which translates into a forward annual dividend yield of close to 2.5% based on the stock’s last closing price.
Trian had initiated a stake in the company because of its “stable growth, scale relative to peers, well-established and trusted brand, and high cash flow generation.” In addition, Trian Partners’ Nelson Peltz and Josh Frank served on Sysco Corporation’s (NYSE:SYY) board for six years until August 2021. Three months before their resignations Sysco Corporation (NYSE:SYY) had announced its new multi-year strategic plan, with intentions to grow its sales 1.5 times faster than its peer group, funded by $750 million in gross cost savings the company hopes to realize by FY 2024.
For its fiscal year 2022 fourth quarter, the company reported non-GAAP EPS of $1.15 on revenue of $19 billion on August 9, beating analysts’ expectations by $0.04 and $710 million, respectively.
3. Janus Henderson Group plc (NYSE:JHG)
Trian Partners’ Stake Value: $749,212,000
Percentage of Trian Partners’ 13F Portfolio: 16.46%
Number of Hedge Fund Holders: 23
Founded in 1934, Janus Henderson Group plc (NYSE:JHG) is a London-based global asset manager that boasts combined assets under management (AUM) of close to £250 billion ( almost$300 billion) as of June 30, 2022. Among hedge funds covered by Insider Monkey, Trian Partners was Janus Henderson Group plc (NYSE:JHG) largest shareholder at the end of Q2, followed by John W. Rogers’s Ariel Investments, which held 3.53 million shares, and billionaire Ken Fisher’s Fisher Asset Management, which owned 1.65 million shares.
Trian initiated its stake during the second quarter of 2020, and in February this year, the company announced the appointment of Trian’s Nelson Peltz and Ed Garden on its board. At the time of joining Janus Henderson Group plc’s (NYSE:JHG) board, Mr. Peltz and Mr. Garden commented:
“As the Company’s largest shareholder, Trian believes strongly in the future of Janus Henderson. We see numerous operating and strategic opportunities ahead and look forward to working with the Janus Henderson Board and its leadership team to help Janus Henderson create significant long-term value for the benefit of all stakeholders.”
Following a rapid rise from April 2020 until November 2021, Janus Henderson Group plc’s (NYSE:JHG) stock seems to have fallen from a cliff as it has lost more than half its value from the $48.55 lifetime high it made last year. 4 of the 6 analysts on Wall Street who cover the stock currently have a ‘Sell’ rating on it.
2. Invesco Ltd. (NYSE:IVZ)
Trian Partners’ Stake Value: $899,387,000
Percentage of Trian Partners’ 13F Portfolio: 19.76%
Number of Hedge Fund Holders: 25
Apart from Janus Henderson Group plc (NYSE:JHG), Invesco Ltd. (NYSE:IVZ) was another asset manager in which Trian Partners initiated a stake during the second quarter of 2020. However, the trajectory that both these asset management companies and their stocks have followed since then has been quite different. Invesco Ltd. (NYSE:IVZ) manages close to $1.5 trillion in assets and gave board seats to Mr. Peltz and Mr. Garden immediately after Trian Partners initiated their stake.
After joining Invesco Ltd.’s (NYSE:IVZ) board, Mr. Peltz and Mr. Green managed a quick turnaround, with the company’s earnings and operating margins improving substantially. In February, both Mr. Peltz and Mr. Garden resigned from the board but remain confident about the company’s future prospects as Trian Partners’ upped their stake in Invesco Ltd. (NYSE:IVZ) by 4% to 55.75 million shares in Q2.
Although Invesco Ltd.’s (NYSE:IVZ) stock has fared better than Janus Henderson Group plc’s (NYSE:JHG) over the past few quarters, it is still trading at a substantial discount to close to the $30 mark it reached last year. Additionally, funds tracked by Insider Monkey that disclosed a stake in Invesco Ltd. (NYSE:IVZ) have also fallen significantly to 25 at the end of June this year compared to 40 at the same time last year.
1. Ferguson plc (NYSE:FERG)
Trian Partners’ Stake Value: $1,420,034,000
Percentage of Trian Partners’ 13F Portfolio: 31.2%
Number of Hedge Fund Holders: 32
Trian Partners further raised its holding in Ferguson plc (NYSE:FERG) during the second quarter by 13% to 12.83 million shares, which ensured that the British-American plumbing giant remained the fund’s top stock pick at the end of that period. Hedge funds tracked by Insider Monkey that disclosed initiating a stake in Ferguson plc (NYSE:FERG) during Q2 included Ricky Sandler’s Eminence Capital and David Greenspan’s Slate Path Capital.
In June, shares of Ferguson plc (NYSE:FERG) rose amid rumors that the company was in talks with a potential buyer for its takeover. However, those rumors were put to rest immediately.
On Setember 2, Trian Partners released a statement announcing that it would be closing its UK-based investment arm Trian Investors 1 and distributing the £440 million in assets it manages, which includes holdings in Ferguson plc (NYSE:FERG), to shareholders. According to Trian Partners:
“The Redemption will allow each shareholder to determine the most opportune time to realise their exposure to ULVR and/or FERG (and, in the case of FERG, taking into consideration its potential eligibility for inclusion in various U.S stock indices, including the S&P 500 Index);
and
The traded market in FERG and ULVR shares is significantly more liquid when compared to trading in the Company’s shares.”
You can also look at 10 Best Housing Stocks To Buy Now and 10 Best Energy Stocks To Buy Now.
