Locust Wood Betting On Food Stocks

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Although Locust Wood reduced its stake in Yum! Brands, Inc. (NYSE:YUM) by 1% during the second quarter after reducing its stake by 18% in the first quarter, it could be seen as a profit booking move, as shares of the company continued their ascent, rising by 15% during the quarter. As of June 30, the 276,470 shares that Locust Wood owned of Yum! Brands, Inc. (NYSE:YUM) were worth $24.9 million. The company reported its second quarter financial results on July 15 and similar to McDonald’s Corporation (NYSE:MCD), cited a sales decline in China as the reason for its poor showing. The second food safety scare in China last year (after the first one in 2013) weighed heavily on comp sales, which were down by 10% year-over-year, but better than last quarter’s 12% decline.  As China continues to play spoilsport for Yum! Brands, Inc. (NYSE:YUM), Keith Meister’s Corvex Capital and Dan Loeb‘s Third Point reported having initiated a stake in the company during the first quarter, with the intention of pushing the company to spin off its China unit.

Moving on, Locust Wood initiated a stake in the now-defunct Kraft Foods Group Inc (NASDAQ:KRFT) by acquiring 222,210 shares of the company during the second quarter, which were worth almost $19 million as of June 30, 2015. Shares of the packaged food and beverage company spiked on March 25 when it was announced that the company would be combined with Heinz to create a separate entity, Kraft Heinz Co (NASDAQ:KHC), in a $46 billion merger deal orchestrated by Heinz’s largest shareholders: Jorge Paulo Lemann‘s 3G Capital and Warren Buffett’s Berkshire Hathaway. The deal was completed on July 2. Within our database, James Dinan’s York Capital Management, with almost 6.0 million shares, was the largest shareholder of Kraft Foods Group Inc (NASDAQ:KRFT) at the end of march.

Disclosure: None

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