In this article, we discuss 9 best stocks to buy according to Nelson Peltz’s Trian Partners.
Nelson Peltz is an American billionaire investor and hedge fund manager who co-founded Trian Partners in 2005, a New York-based alternative investment firm. Trian Partners follows an activist investing strategy, and over the years, the hedge fund has carried out activist campaigns at Ingersoll Rand Inc. (NYSE:IR), Mondelez International, Inc. (NASDAQ:MDLZ), DuPont de Nemours, Inc. (NYSE:DD), and The Procter & Gamble Company (NYSE:PG), among others.
The hedge fund seeks out undervalued and underperforming yet high quality stocks in the industrials, finance, consumer staples, consumer discretionary, and communications sectors. Nelson Peltz’s Trian Partners also focuses on ESG investing. While Trian maintains a concentrated portfolio and takes an active approach to investments, it also invests in multiple passive strategies.
On January 25, 2022, after Nelson Peltz’s Trian Partners built a stake in Unilever PLC (NYSE:UL), the company announced that it plans to slash 15% of its senior management positions in order to fasten the decision-making process. However, Trian Partners’ exact stake in Unilever PLC (NYSE:UL) has not yet been disclosed and Nelson Peltz’s intentions regarding his position in the consumer goods giant remain unknown.
Some of the most notable stocks in Nelson Peltz’s Trian Partners’ fourth quarter portfolio include Sysco Corporation (NYSE:SYY), General Electric Company (NYSE:GE), and The Wendy’s Company (NASDAQ:WEN), in addition to others discussed in detail below.
Nelson Peltz of Trian Partners
Our Methodology
We used Nelson Peltz’s Trian Partners’ portfolio for the fourth quarter of 2021 for this analysis. We enlisted the hedge fund’s top 9 stock picks, mentioning analyst ratings, latest earnings, and the hedge fund sentiment around the companies.
Best Stocks to Buy According to Nelson Peltz’s Trian Partners
9. Mondelez International, Inc. (NASDAQ:MDLZ)
Trian Partners’ Stake Value: $29,852,000
Percentage of Trian Partners’ 13F Portfolio: 0.40%
Number of Hedge Fund Holders: 40
Mondelez International, Inc. (NASDAQ:MDLZ) is a Chicago-based multinational snack food and beverage corporation that sells its products under the Cadbury, Milka, Toblerone, Oreo, belVita, LU, Halls, Trident, and Tang brands. The company distributes its products in Latin America, North America, Asia, the Middle East, Africa, and Europe.
Securities filings for Q4 2021 reveal that Nelson Peltz’s Trian Partners owned 450,184 shares of Mondelez International, Inc. (NASDAQ:MDLZ), worth $29.8 million, representing 0.40% of the total 13F securities.
Mondelez International, Inc. (NASDAQ:MDLZ) reported earnings for the first fiscal quarter of 2022 on April 26, posting an EPS of $0.84, beating analysts’ consensus estimates by $0.09. Revenue for the period grew 7.27% year-over-year to $7.76 billion, outperforming market predictions by approximately $294 million.
On April 28, Mizuho analyst John Baumgartner maintained a Buy rating on Mondelez International, Inc. (NASDAQ:MDLZ) but lowered the firm’s price target on the shares to $75 from $77. According to the analyst, Mondelez International, Inc. (NASDAQ:MDLZ) reported a significant Q1 beat, with favorable pricing, volumes, and margins.
According to Insider Monkey’s Q4 data, Mondelez International, Inc. (NASDAQ:MDLZ) was part of the public stock portfolios of 40 hedge funds, compared to 46 funds in the earlier quarter. Ric Dillon’s Diamond Hill Capital held the largest stake in the company, with 9.2 million shares worth $611 million.
In addition to Sysco Corporation (NYSE:SYY), General Electric Company (NYSE:GE), and The Wendy’s Company (NASDAQ:WEN), Mondelez International, Inc. (NASDAQ:MDLZ) is a notable holding in the Q4 portfolio of Nelson Peltz’s Trian Partners.
8. The Procter & Gamble Company (NYSE:PG)
Trian Partners’ Stake Value: $38,831,000
Percentage of Trian Partners’ 13F Portfolio: 0.52%
Number of Hedge Fund Holders: 67
Nelson Peltz’s Trian Partners held 237,384 shares of The Procter & Gamble Company (NYSE:PG) in the fourth quarter of 2021, worth $38.8 million, accounting for 0.52% of the total investments. The Procter & Gamble Company (NYSE:PG) is an American multinational company that provides branded consumer packaged goods, operating via Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care segments.
The Procter & Gamble Company (NYSE:PG) reported its fiscal Q1 2022 results on April 20, announcing earnings per share of $1.33, exceeding analysts’ expectations by $0.04. The revenue increased 7.02% from the prior-year quarter, reaching $19.38 billion, topping market consensus by $687.76 million.
The Procter & Gamble Company (NYSE:PG) on April 12 declared a $0.9133 per share quarterly dividend, a 5% increase from its prior dividend of $0.8698. The dividend is distributable on May 16, to shareholders of the company as of April 22. 2022 marks the 66th consecutive year of dividend growth by The Procter & Gamble Company (NYSE:PG), making it a reliable dividend king to invest in. On April 28, the stock delivered a dividend yield of 2.24%.
Barclays analyst Lauren Lieberman raised the price target on The Procter & Gamble Company (NYSE:PG) to $176 from $167 and kept an Overweight rating on the shares on April 22. The analyst believes that The Procter & Gamble Company (NYSE:PG)’s Q1 results will “set an extremely high bar” for the sector and will ultimately reinforce the company’s “widened fundamental performance gap”.
According to the fourth quarter database of Insider Monkey, 67 hedge funds were bullish on The Procter & Gamble Company (NYSE:PG), collectively holding stakes worth $6.6 billion, compared to 69 funds in the preceding quarter, with stakes in the company worth $6.4 billion. Rajiv Jain’s GQG Partners is the leading shareholder of The Procter & Gamble Company (NYSE:PG), with 7.5 million shares worth $1.2 billion.
Like Sysco Corporation (NYSE:SYY), General Electric Company (NYSE:GE), and The Wendy’s Company (NASDAQ:WEN), institutional investors are pouring into The Procter & Gamble Company (NYSE:PG).
7. General Electric Company (NYSE:GE)
Trian Partners’ Stake Value: $380,347,000
Percentage of Trian Partners’ 13F Portfolio: 5.09%
Number of Hedge Fund Holders: 57
General Electric Company (NYSE:GE) was incorporated in 1892 and is headquartered in Boston, Massachusetts. It is an American multinational conglomerate that operates via Power, Renewable Energy, Aviation, and Healthcare segments. General Electric Company (NYSE:GE) caters to industrial customers in Europe, China, Asia, the Americas, the Middle East, and Africa.
13F filings for the fourth quarter of 2021 disclose that Nelson Peltz’s Trian Partners held more than 4 million shares of General Electric Company (NYSE:GE), worth $380.3 million, representing 5.09% of the total 13F holdings. The hedge fund increased its stake by 1% in Q4 2021.
In its Q1 2022 earnings report, published on April 26, General Electric Company (NYSE:GE) posted an EPS of $0.24, beating market consensus estimates by $0.04. The $17.04 billion revenue also outperformed analysts’ predictions by roughly $123 million.
BofA analyst Andrew Obin on April 27 lowered the price target on General Electric Company (NYSE:GE) to $120 from $132 and maintained a Buy rating on the shares. The analyst observed that the stock declined 10% on April 26 as the company is now closer to the low-end of 2022 guidance despite solid Q1 results. He told investors that Healthcare margins coming in below expectations are “significant” due to Healthcare’s near-term spinoff and relative importance in General Electric Company (NYSE:GE)’s sum-of-the-parts valuation. However, he thinks General Electric Company (NYSE:GE) will not be the only multi-industry conglomerate slashing 2022 guidance and he continues to see upside to his higher 2022 Aviation estimates. The analyst stated that he has “baked in significantly more conservative assumptions” for the Healthcare and Renewable divisions.
According to Insider Monkey’s Q4 data, 57 hedge funds placed long calls on General Electric Company (NYSE:GE), compared to 53 funds in the preceding quarter. The total stakes owned by elite investors in the fourth quarter amounted to $6.2 billion. Andreas Halvorsen’s Viking Global is the biggest shareholder of the company, with a position worth $1.70 billion.
Here is what Vulcan Value Partners has to say about General Electric Company (NYSE:GE) in its Q3 2021 investor letter:
“During the quarter, we sold our positions in General Electric Co. General Electric is a company we followed for a long time. In the past, we removed GE from the MVP list due to management’s poor capital allocation decisions which resulted in value instability. Larry Culp, the former CEO of Danaher, became CEO of General Electric in 2018. The company implemented a vast restructuring program to simplify the industrial side of its business, sold off non-core assets, paid down debt with the proceeds, and drastically shrunk GE Capital. These restructuring activities allowed its world-class jet engine and healthcare businesses to shine through, and improved value stability. As a result, we added the company back to the MVP list. While the pandemic negatively impacted General Electric’s aviation business in the short run, it also gave us the opportunity to buy General Electric in the second quarter of 2020 with a substantial margin of safety. GE is a good example of a competitively entrenched, yet slower growing MVP business. As its stock price rose rapidly over the last year, its value growth did not keep up, and the price to value gap closed quickly. As our margin of safety diminished, we sold our position in GE and allocated it to more discounted companies.”
6. The Wendy’s Company (NASDAQ:WEN)
Trian Partners’ Stake Value: $604,200,000
Percentage of Trian Partners’ 13F Portfolio: 8.10%
Number of Hedge Fund Holders: 26
The Wendy’s Company (NASDAQ:WEN) was founded in 1969 and is headquartered in Dublin, Ohio. It operates as a quick-service restaurant company, in addition to owning and leasing real estate properties. Wendy’s International is a major subsidiary of the company, which franchises the Wendy’s restaurants.
The fourth quarter regulatory filings reveal that Nelson Peltz, via Trian Partners, held 25.3 million shares of The Wendy’s Company (NASDAQ:WEN), worth $604.2 million, representing 8.10% of the total 13F portfolio. The hedge fund has consistently owned shares of the company since Q3 2011.
On April 4, The Wendy’s Company (NASDAQ:WEN) announced an increase of $150 million in its prior share repurchase authorization. The total limit available for repurchase is $250 million, with the program expiring in February 2023.
The Wendy’s Company (NASDAQ:WEN) declared on February 23 a $0.125 per share quarterly dividend, a 4.2% increase from its prior dividend of $0.12. The dividend was distributed to shareholders on March 15. The Wendy’s Company (NASDAQ:WEN) has consistently paid dividends since 2009.
BMO Capital analyst Andrew Strelzik downgraded The Wendy’s Company (NASDAQ:WEN) on April 18 to Market Perform from Outperform, slashing the price target to $22 from $28. The analyst observed that The Wendy’s Company (NASDAQ:WEN) is not positioned advantageously amid the current macro backdrop of increasing pressures on discretionary spending. As a result, the analyst sees higher risk to comps and margin expectations. The stock’s valuation is “undemanding”, but it will be difficult to argue for multiple expansion if estimates are declining, added Strelzik.
Among the hedge funds tracked by Insider Monkey, 26 funds were bullish on The Wendy’s Company (NASDAQ:WEN) at the end of December 2021, down from 33 funds in the earlier quarter. Harris Associates is a prominent stakeholder of the company, with 5.2 million shares worth $124.6 million.
5. Comcast Corporation (NASDAQ:CMCSA)
Trian Partners’ Stake Value: $1,006,168,000
Percentage of Trian Partners’ 13F Portfolio: 13.48%
Number of Hedge Fund Holders: 80
Comcast Corporation (NASDAQ:CMCSA) is a Pennsylvania-based media and technology company that functions via Cable Communications, Media, Studios, Theme Parks, and Sky segments. Nelson Peltz’s hedge fund owns approximately 20 million Comcast Corporation (NASDAQ:CMCSA) shares, worth over $1 billion, representing 13.48% of the total Q4 securities.
Comcast Corporation (NASDAQ:CMCSA) reported financial results for Q1 2022 on April 28. The EPS and revenue for the quarter came in at $0.86 and $31.01 billion respectively, above Street estimates by $0.05 and $602.53 million. Revenue for Q1 grew about 14% year-over-year.
On January 27, Comcast Corporation (NASDAQ:CMCSA) declared a $0.27 per share quarterly dividend, an 8% increase from its last dividend of $0.25. The dividend was distributed to shareholders on April 27. The company also expanded its share repurchase program authorization to $10 billion, effective as of January 1, 2022.
Pivotal Research analyst Jeffrey Wlodarczak on April 28 lowered the price target on Comcast Corporation (NASDAQ:CMCSA) to $57 from $62 and maintained a Buy rating on the shares. The analyst said that the company posted “overall solid in-line” Q1 results. However, regardless of the strong results and an “inexpensive valuation”, Comcast Corporation (NASDAQ:CMCSA) shares sold off after the results due to ongoing concerns about cable’s “long-term flywheel for growth slowing,” the analyst told investors in a research note.
Comcast Corporation (NASDAQ:CMCSA) was found in the public stock portfolios of 80 hedge funds at the end of the fourth quarter of 2021, compared to 75 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the biggest shareholder of Comcast Corporation (NASDAQ:CMCSA), with 29.3 million shares worth $1.4 billion.
Here is what ClearBridge All Cap Growth Strategy has to say about Comcast Corporation (NASDAQ:CMCSA) in its Q4 2021 investor letter:
“Weakness among our holdings in the communication services sector was the other detractor to performance. Comcast was hurt by tepid subscriber growth in its broadband business but demonstrated strong growth in free cash flow, positioning the company for accelerated capital return going forward.”
4. Sysco Corporation (NYSE:SYY)
Trian Partners’ Stake Value: $1,009,679,000
Percentage of Trian Partners’ 13F Portfolio: 13.53%
Number of Hedge Fund Holders: 25
Nelson Peltz’s Trian Partners trimmed its Sysco Corporation (NYSE:SYY) stake by 4% in Q4 2021, holding a position worth over $1 billion. The stock accounts for 13.53% of the total investments for the fourth quarter. Sysco Corporation (NYSE:SYY) is a Texas-based multinational corporation that distributes food products and kitchen equipment to restaurants, hospitals, educational institutes, hotels, and industrial caterers.
On April 28, Sysco Corporation (NYSE:SYY) declared a $0.49 per share quarterly dividend, a 4.3% increase from its prior dividend of $0.47. The dividend is payable on July 22, to shareholders of record on July 1. The stock delivers a dividend yield of 2.13% as of April 28. The company has paid a quarterly dividend regularly since it went public in 1970, and it is a reliable dividend aristocrat.
Barclays analyst Jeffrey Bernstein raised the price target on Sysco Corporation (NYSE:SYY) to $100 from $90 and maintained an Overweight rating on the shares on April 25. The analyst believes restaurants are well positioned in a slowing economy. He expects consistent outperformance from more defensive franchise names.
Donald Yacktman’s Yacktman Asset Management held a notable stake in Sysco Corporation (NYSE:SYY), with 4.7 million shares worth $376.3 million. Overall, 25 hedge funds were bullish on the stock at the end of the fourth quarter of 2021.
3. Invesco Ltd. (NYSE:IVZ)
Trian Partners’ Stake Value: $1,182,320,000
Percentage of Trian Partners’ 13F Portfolio: 15.85%
Number of Hedge Fund Holders: 34
Invesco Ltd. (NYSE:IVZ) is a publicly traded investment firm that caters to retail, institutional, and high-net worth clients, as well as public entities, enterprises, unions, non-profit organizations, endowments, pension funds, and financial institutions. As of Q4 2021, Trian Partners boosted its Invesco Ltd. (NYSE:IVZ) stake by 24%, holding a total of 45.4 million shares, worth $1.18 billion, representing 15.85% of the 13F securities.
Invesco Ltd. (NYSE:IVZ) reported its fiscal Q1 2022 results on April 26, announcing earnings per share of $0.56, missing estimates by $0.06. The $1.25 billion revenue also fell short of analysts’ predictions by approximately $23 million.
On April 26, Invesco Ltd. (NYSE:IVZ) declared a $0.1875 per share quarterly dividend, a 10.3% increase from its prior dividend of $0.17. The dividend is payable on June 2, to shareholders of record on May 10. Invesco Ltd. (NYSE:IVZ) delivers a dividend yield of 3.89% as of April 28.
Deutsche Bank analyst Brian Bedell on April 28 maintained a Buy recommendation on Invesco Ltd. (NYSE:IVZ) but lowered the firm’s price target on the shares to $24 from $26 after it announced “good” Q1 results.
According to Insider Monkey’s Q4 data, 34 hedge funds were bullish on Invesco Ltd. (NYSE:IVZ), compared to 38 funds in the preceding quarter. John Overdeck and David Siegel’s Two Sigma Advisors is a significant shareholder of the company, with 3.4 million shares worth approximately $80 million.
2. Janus Henderson Group plc (NYSE:JHG)
Trian Partners’ Stake Value: $$1,185,755,000
Percentage of Trian Partners’ 13F Portfolio: 15.89%
Number of Hedge Fund Holders: 26
Janus Henderson Group plc (NYSE:JHG) is a London-based asset management company that offers financial products to individual and institutional investors. Nelson Peltz’s Trian Partners purchased 28.2 million shares of Janus Henderson Group plc (NYSE:JHG) in the fourth quarter of 2021, worth $1.18 billion, representing 15.89% of the total 13F holdings.
On February 18, Deutsche Bank analyst Brian Bedell lowered the price target on Janus Henderson Group plc (NYSE:JHG) to $33 from $36 and kept a Hold rating on the shares. The analyst issued a mid-Q1 outlook for brokers and asset managers and continues to favor the “rate-sensitive stocks” for at least the next two quarters.
According to Insider Monkey’s Q4 data, Janus Henderson Group plc (NYSE:JHG) was found in the public stock portfolios of 26 hedge funds, compared to 24 funds in the prior quarter. John W. Rogers’ Ariel Investments held a significant stake in the company, with 3.35 million shares worth almost $141 million.
1. Ferguson plc (NYSE:FERG)
Trian Partners’ Stake Value: $2,022,084,000
Percentage of Trian Partners’ 13F Portfolio: 27.10%
Number of Hedge Fund Holders: 12
Ferguson plc (NYSE:FERG) is headquartered in Wokingham, the United Kingdom, offering plumbing and heating solutions to residential, commercial, infrastructure, and industrial markets. Ferguson plc (NYSE:FERG) is the largest holding in Trian Partners’ Q4 portfolio. The hedge fund owns 11.3 million shares of the company, worth more than $2 billion, representing 27.10% of the total portfolio.
On March 23, Ferguson plc (NYSE:FERG) declared a semi-annual dividend per share of $0.84. The dividend is payable on May 6, to shareholders of record on March 25. The company delivers a dividend yield of 1.87% as of April 28.
Truist analyst Keith Hughes on April 25 maintained a Buy rating on Ferguson plc (NYSE:FERG) but lowered the price target on the shares to $165 from $180, in order to reflect the impact of higher interest rates on valuations. The analyst believes that Ferguson plc (NYSE:FERG)’s business in all end markets is solid as demand remains strong. He added that he expects Ferguson plc (NYSE:FERG) to be one of the top performers in the coverage “regardless of what comes in the cycle”.
According to Insider Monkey’s fourth quarter database, 12 hedge funds were long Ferguson plc (NYSE:FERG), compared to 10 funds in the previous quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital is the biggest shareholder of the company, with a position worth $5.5 billion.
You can also take a look at 10 Biotech Stocks to Buy Today According to Ken Fisher’s Fisher Asset Management and 10 Tech Stocks to Buy Now According to Robert Pitts’ Steadfast Capital.
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Disclosure: None. 9 Best Stocks to Buy According to Nelson Peltz’s Trian Partners is originally published on Insider Monkey.
