Can McDonald’s Corporation (MCD) Be Fixed And Would Shareholders Have The Stomach For It? Peltz, Ackman Weigh In

Following activist funds like Trian Partners and Pershing Square is important because it is a very specific and focused strategy in which the investor doesn’t have to wait for catalysts to realize gains in the holding. Funds like Trian Partners and Pershing Square can simply create their own catalysts by pushing for them through negotiations with the company’s management and directors. In recent years, the average returns of activists’ hedge funds has been much higher than the returns of an average hedge fund. Furthermore, we believe do-it-yourself investors have an advantage over activist hedge fund investors because they don’t have to pay 2% of their assets and 20% of their gains every year to compensate hedge fund managers. We have found through extensive research that the top small-cap picks of hedge funds are also capable of generating high returns and built a system around this premise. In the 34 months since our small-cap strategy was launched it has returned over 139% and beaten the S&P 500 ETF (SPY) by more than 80 percentage points (read more details).

It seems, however, that other hedge fund managers are betting on McDonald’s Corporation (NYSE:MCD). Among the funds Insider Monkey tracks, the total value of holdings of those who have stakes in the company increased by 32.62% quarter-over-quarter by March 31 to $6.83 billion. Another bullish sign is that 89 among the over 700 hedge funds we track had long positions in McDonald’s by the end of the first quarter, up from 75 from the end of the previous quarter. Mason Hawkins’ Southeastern Asset Management owned the largest position in McDonald’s Corporation (NYSE:MCD) among funds we track at the end of March, with 10.85 million shares worth about $1.06 billion. Highfields Capital Management, led by Jonathon Jacobson, followed with a $995.56 million stake comprised of 9.81 million shares. Highfields Capital Management also initiated a massive call position in McDonald’s Corporation (NYSE:MCD) worth $417.3 million in the first quarter. Larry Robbins‘ Glenview Capital also initiated a $282.7 million position during the quarter, buying 2.9 million shares.

Disclosure: None