It is hard to be the CEO of a company these days given the increasing political uncertainty and slow growth being faced by major developed economies. Shareholder activism has also made the job of CEO more difficult, forcing them to look for short-term solutions to appease shareholders in place of a long-term outlook that could build the foundation for a successful company over many years and decades. However, there are some CEOs who have been in the saddle for a long time and have delivered exceptional returns for their stockholders. As per Harvard Business Review (HBR), the world’s 100 best CEOs have been on the job for 17 years on average and have generated a 20.2% annual return.
In this article, we’ll take a look at the companies have been guided by five of these top CEOs and see what hedge funds think of their work, as well as what may lie in store for these firms.
At Insider Monkey, we track over 750 hedge funds, whose quarterly 13F filings we analyze to determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (read more details).
Anheuser-Busch InBev SA NV (ADR) (NYSE:BUD), one of the largest beer producers in the world with a global portfolio of over 200 brands, kicks off our list. CEO Carlos Alves De Brito, who was the CEO of InBev from 2005 through 2008, and has been the CEO of Anheuser-Busch InBev SA NV (ADR) (NYSE:BUD) since InBev and Anheuser-Busch merged in 2008, ranked 12th on the Harvard Business Review list. Brito has said that his company resembles beer, since the contents of both are always under pressure. He has delivered high margins for the company and is looking towards a potential mega-merger with another giant alcoholic beverage maker, SABMiller. With a market cap of $190 billion, the company has delivered returns of more than 100% to its shareholders over the last five years. The total number of hedge funds from within our database with a position in Anheuser-Busch InBev SA NV (ADR) (NYSE:BUD) increased to 35 by the end of June from 32 a quarter earlier. Hedge funds held shares of the company valued at $6.05 billion at that time.
Nike Inc (NYSE:NKE) is one of the most famous brands in the world, and some of that feat can be attributed to CEO Mike Parker, who ranked 11th on the list of the top 100 CEOs. Parker became the CEO in 2006 and under him, Nike Inc (NYSE:NKE) has more than doubled its sales. Parker has been with Nike for over 30 years and has used ‘design thinking’ to make Nike a champion footwear maker. Under him, the company is also pushing online sales and he recently said that “One of our greatest competitive advantages is our ability to connect physical and digital shopping experiences for our consumers”. It has set a target of achieving $7 billion in online sales by 2020. The $86 billion company has provided a return of more than 350% to its shareholders over the last decade. About 4.6% of Nike Inc (NYSE:NKE)’s float was held by 57 hedge funds in our system on June 30.
On the next page we’ll check out what hedge funds think of companies run by three more of the top-ranked CEOs in the world.