Billionaire Nelson Peltz Thinks Hillary Wins, Talks Pepsi, GE

Billionaire Nelson Peltz is an American business and the co-founder of Trian Partners in 2005, along with Peter May and Edward Garden. The fund generally invests in undervalued and under-performing companies and works with companies to increase shareholder value through strategic redirection, execution, efficient capital allocation, and focus. Trian Partners has over $10 billion worth of assets and is one of the fastest-growing hedge funds in the country. According to Forbes, Nelson Peltz has a net worth of $1.36 billion.

The billionaire investor recently conducted an interview with CNBC on the program ‘Fast Money: Halftime Report’, during which he talked about the economic outlook, the impact of the presidential elections, and companies including General Electric Company (NYSE:GE) and PepsiCo, Inc. (NYSE:PEP). Here’s a recap of some of the important things Mr. Peltz said.

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Economy is Not as Bad as People Think

Nelson Peltz said that Wall Street is talking itself into negative sentiment unnecessarily, and that things are not as bad as people think. He said that earnings have been “pretty good”, but that companies have struggled to achieve revenue targets for years, which may simply be due to being overly ambitious, which does not suggest any broader market turmoil. Peltz is also bullish on Europe, believing that growth in the region is poised to increase this year.

Hillary Will Win the Election

Peltz, who donated $50,000 to Donald Trump’s campaign before reportedly also donating $50,000 to the Democratic National Committee, thinks Hillary Clinton is going to win the Presidential election. He added that if Hillary gets the Senate and the House flips to the Democrats, the markets will stay relatively calm, but feels that if she fails to take over control of both, the markets will go up.

Nelson Peltz
Nelson Peltz
Trian Partners

General Electric Has the Best Industrial Assets

When asked about General Electric Company (NYSE:GE), Peltz said that the company has been a “good performer” since its announcement last year that it was exiting its banking business. Peltz thinks that the Connecticut-based company has the best “industrial assets on the planet.” General Electric announced a major business transformation last year to focus on energy, aviation, oil and software, but despite Peltz’s praise, shares of GE are 6.8% in the red so far this year. Trian Fund Management acquired a $2.5 billion stake in General Electric Company (NYSE:GE) last October. At the end of the second quarter, 57 hedge funds tracked by Insider Monkey were bullish on General Electric Company (NYSE:GE), down from 64 a quarter earlier. Ken Fisher’s Fisher Asset Management owns over 31.45 million shares of the company as of the end of the third quarter.

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On the next page, we’ll see what Mr. Peltz had to say about Pepsi and his thoughts on interest rates.

No Need to Raise Interest Rates

Peltz also questioned the rationale of increasing interest rates at this point, and thinks the country doesn’t need a strong dollar, as it makes exporting more difficult.

“I don’t know why the hell they’re thinking about having an interest rate hike. I don’t think we need a stronger dollar,” stated Peltz.

PepsiCo is Doing the Right Thing

The billionaire seems impressed with the performance of PepsiCo, Inc. (NYSE:PEP), a company whose stock he left earlier this year, selling his stake valued at close to $2 billion. Peltz lauded Pepsi CEO Indra Nooyi cutting costs by $1 billion a year for three years in a row.

“The company is doing the right thing, and I give all the credit to Indra,” Peltz said.

Mr. Peltz asked Pepsi to merge with beverage and food company Mondelez International, Inc. (NASDAQ:MDLZ) back in 2013, while separating its beverage and snacks businesses. Though Pepsi didn’t comply with the activist’s demands, the investment was nonetheless a successful one for Trian, as Peltz said that Pepsi’s stock increased to $100 from $60 during the time he was an “engaged” shareholder of the company. A total of 58 funds in our database held shares of PepsiCo, Inc. (NYSE:PEP) at the end of the second quarter.

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Disclosure: None