PepsiCo, Inc. (PEP), Mondelez International Inc (MDLZ): Activist Billionaire Nelson Peltz Loves This ‘Fab Five’

Page 1 of 2

Editor’s Note: Related tickers: PepsiCo, Inc. (NYSE:PEP), Mondelez International Inc (NASDAQ:MDLZ), Tiffany & Co. (NYSE:TIF), State Street Corporation (NYSE:STT), Kraft Foods Group Inc (NASDAQ:KRFT),

Trian Partners, known for its activist ways, is a hedge fund founded and managed by Nelson Peltz, Peter May and Edward Gardner. The fund generally meshes a value-based approach with their activist positions, with over $2 billion in 13F capital at their disposal.

Recently, Peltz and his team have opened large positions in consumer-centric companies, namely PepsiCo, Inc. (NYSE:PEP) and Mondelez International Inc (NASDAQ:MDLZ). But first, let’s go over a bit of background on a couple of their other, more bearish moves. At Insider Monkey, we track the best of the best hedge funds, due to their market-beating potential if you know where to look; discover the secrets of piggybacking here.


Selling Tiffany and State Street

In Q1, Peltz and Trian sold a boatload of luxury jeweller Tiffany & Co. (NYSE:TIF). At the end of 2012, the fund reported ownership of a little over 1 million shares; on March 31,Trian held approximately 10,000 shares—a 99% decrease. Sitting here in mid-May, Tiffany & Co. (NYSE:TIF)’s stock price has surged 33% since the start of 2013, with shares currently trading at a little over $77 a pop. Tiffany & Co. (NYSE:TIF) is about as expensive as industry norms, with its trailing P/E(23.85) nearly equalling its peer group-average of 23.50, so it’s possible that Peltz doesn’t see a value opportunity here any longer.

Trian also sold shares of State Street Corporation (NYSE:STT), an investment management services provider that has its fair share of hedge fund bulls. Peltz’s move didn’t really come as much of a surprisethough, as Trian sold more than half their State Streetstakelast year, before cutting it by another 25% (qoq)in the first three months of 2013. Trian still owns 2.3 million shares, worth about $140 million, but we wouldn’t overlook his consistent selling behaviour. On the bright side, shares of State Street Corporation (NYSE:STT) now rest near $65 a share, significantly higher than their July 2012 high of $45.

Post-split Mondelez

On the flip side, Peltz went even longer on Mondelez International Inc (NASDAQ:MDLZ), the snacks and soft drinks producer, adding almost 21 million shares to their existing position. As of March 31, the total value of the 40 million Mondelez shares held by Trian was more than $1.2 billion. Mondelez International Inc (NASDAQ:MDLZ) was formally part of Kraft Foods Group Inc (NASDAQ:KRFT) and was spun off on October 1, 2012, when Trian began building its holding. Eight months later, the stock price has managed a modest 6% advance, with shares currently trading just above the $30 mark halfway through May.

Page 1 of 2