Billionaire Nelson Peltz’s Favorite Stocks
In this article, we featured billionaire Nelson Peltz's top 10 stock picks. Click here to go ahead and see billionaire Nelson Peltz's top 5 stick picks.
One of the happiest activist investors, Nelson Peltz has a net worth of $ 1.7 billion. He co-founded the activist hedge fund Trian Fund Management L.P., a multi-billion dollar investment management firm that has investors from insurance companies to pension funds to university foundations and currently has approximately $ 9 billion in assets under management. Peltz is also the non-executive chairman of Wendy's Company (NASDAQ: WEN), a director of Legg Mason, Procter & Gamble (NYSE: PG), Madison Square Garden Company (NYSE: MSGS), and Sysco (NYSE: SYY).
Nelson Peltz from Trian Partners
Billionaire Peltz, 78, was born in Brooklyn, New York in 1942. He was once a truck driver for his family's grocery wholesaler. He graduated from the University of Pennsylvania and the Wharton School, but dropped out in 1963. He received a stake in the family business and was able to expand his modest stake into a massive sum of fortune.
Nelson Peltz co-founded Trian Fund Management in 2005. The activist hedge fund posted an annual return a little less than 12% between 2014 and 2018, gaining around 30% in 2019, but gave up some of those gains back 13% in the first half of 2020.
Billionaire Nelson Peltz on the Capitol Riot: We are not a banana republic
"It was a stain on America." This is what the billionaire Nelson Peltz said in a CNBC interview about the recent incident of the uprising in the US Capitol. He added that the lesson learned here is that the American people can no longer elect officials to fight each other because, in his opinion, the enemy is "out of the room, not across the aisle."
The billionaire investor is a longtime supporter and friend of President Trump, but he released a statement condemning the uprising that he said was initiated by Trump. "We condemn President Trump's efforts to reverse the election results that culminated in yesterday's shocking events in our Capitol," he said, saying Trump must pledge to a peaceful transfer of power. "We also ask President-elect Biden and the leaders of Congress to stop the fighting and work together for the good of our country. Every single American citizen deserves better governance."
Katherine Welles / Shutterstock.com
"We are not a banana republic. This is the United States." Peltz described the incident as sad, scary and a stain on America. "What happened (the uprising) is a shame and as an American I am ashamed. I didn't vote for Trump in 2016, I voted for him in the previous November election, and I'm sorry I did . " Nelson Peltz said he supports many of Trump's policies, trade efforts and economic policies that he believes are good for the country.
"America has been to hell and back. It has gotten so tribal and I just hope that President-elect Biden will act to bring us together ... We have to heal from Trump. It really has been a devastating blow and we just can't go on,". Peltz pointed out that the outgoing administration's economic policy is something America has needed for decades. He hopes President-elect Biden won't just throw the baby out in a bath of water.
Evan El-Amin / Shutterstock.com
Nelson Peltz stressed that priorities must be America First and the personal political agendas of the various parties must be set aside for later. In conclusion, he said, "Trump could have accepted the results. He could have offered his friendship, support and help in transitioning to Biden. Had he done that, his legacy would be 180 degrees different than it is today." .
In this article, we take a look at billionaire Nelson Peltz's 13F portfolio to uncover some potential investment ideas. We analyzed the performance of Nelson Peltz's historic stocks a few years ago in one of the issues of our monthly activist newsletter. Peltz's entire stock selection portfolio achieved an average monthly return of 0.94% between 2006 and 2017, outperforming the S&P 500 Index's monthly return of 0.8% over the same period. This isn't a huge outperformance, but it does imply that some of the Peltz stock picks are clearly beating the market.
In our monthly activist newsletter, we share stock selections from activist investors, hedge fund investor letters, investment conferences and our internal research. Our portfolio of stock picks has outperformed the S&P 500 ETFs by more than 88 percentage points since March 2017 (see details here). Because of this, we believe we can outperform the market by analyzing hedge fund portfolios for promising stock ideas.
Now let's check out billionaire Nelson Peltz's top 10 stock picks.
10. The Bank of New York Mellon Corporation (BK)
BK is a multinational investment company that offers financial services to institutions, companies or individual venture capitalists.
According to his website, "we innovate and work with some of the most influential partners in the world - including our own competitors - to help our customers reach new heights. Our open architecture corporate platform helps us generate compelling and optimal insights." Gaining customers experience to unlock new potential for everyone. "
Trian Partners has already sold all of the Bank of New York Mellon Corp's shares. First Eagle Investment Management explained why investors are bearish in its Q3 2020 investor letter:
“The Bank of New York Mellon, the world's largest custodian, was challenged by the persistently low interest rate environment. While custody is typically a widespread business, revenue generation is very sensitive to net interest margins. Low interest rates have also hurt the Bank of New York's other major line of business - investment management - as it has been forced to forego fees on its money market funds in order to maintain its net asset value. "
9. nVent Electric plc (NVT)
nVent Electric is a recognized $ 2.2 billion electrical company that makes reliable electrical products. NVT was floated on the stock exchange in 2018 after the spin-off from Pentair (PNT). The division of Pentair into two companies focused on the core business is the result of years of work, not only on behalf of management, but also by the renowned activist fund Trian Partners.
After the spin-off, nVent Electric became a company focused on electrical trace heating solutions, thermal management systems, electrical and fastening solutions, and electronic protection. The portfolio includes brands such as Raychem, Tracer, Schoff, Hoffman, Caddy and Erico. The majority of nVent's revenue comes from the industrial sector, which accounts for 45% of sales, followed by the commercial and residential (27%), energy (16%) and infrastructure (12%) sectors.
nVent Electric has a strong product portfolio, solid sales and healthy free cash flow ahead of the coronavirus pandemic. With a Forward P / E of 14, nVent Electric is cheaper than most of its industry peers. Nelson Peltz had $ 103,088,000 in NVT shares in his 13F portfolio at the end of September.
8. General Electric Company (GE)
General Electric is a 128-year-old leading digital industrial company providing a variety of products and services ranging from power generation, aircraft engines, oil and gas production materials, finance, and more.
Founded by Thomas Edison, with 200,000 employees in 130 countries, General Electric is a superior multinational conglomerate company dedicated to building a better world through its dedicated service, leading technology and global wealth.
Nelson Peltz's portfolio currently has $ 200,502,000 in GE shares, equaling 32,183,233 shares and 3.31% of his entire 13F portfolio. Longleaf Partners said the following about the stock in its Q3 2020 investor letter:
“General Electric (GE) (-9%, -0.41%), the industrial conglomerate, was still 40% lower for the quarter due to the slow recovery in the commercial aerospace industry, where monthly departures are improving are also a critic last year. GE Aviation's commercial engine and maintenance revenues are down in half, and the segment will not match its 2019 profit for a few more years. We have lowered our estimate to reflect this new reality. CEO Larry Culp has responded with the necessary cost cuts and announced that the consolidated GE will be profitable in cash in the second half of this year and 2021. In the healthcare sector, where GE's quarterly sales were down 4%, sales of scanning and pharmaceutical diagnostics are rebounding. GE Power received significant new orders for natural gas and renewable energy equipment despite -9% revenue for the quarter, while service sales recovered to normal levels. We anticipate that each segment of GE will continue to improve sales and profitability over the next several years to help the company meet its goal of high single-digit FCF margins. Today the stock trades at less than half our conservative estimate for this premier corporate collection. "
7. Janus Henderson Group plc (JHG)
As a company that makes specific investments in each asset class, the Janus Henderson Group oversees comprehensive investment products for institutional and retail clients. The company operates fully in its geographic regions such as the United States, Asia, Australia and Europe.
It should be noted that the merger of Janus Capital Group and Henderson Global Investors in 2017 resulted in the creation of the multinational asset management company Janus Henderson Group plc, which currently manages $ 370 billion in assets.
Nelson Peltz recently acquired 17,666,612 shares of JHG, which equates to $ 383,719,000 or 6.34% of Trian's total stock value. Peltz has also acquired a similarly large position in IVZ, so that the possibility of a merger of these companies is now in sight.
6. Invesco Ltd. (IVZ)
Invesco Ltd. is an exempt investment management company with offices in over 20 different countries worldwide. It manages $ 1.2 trillion in assets and is made up of specialist investment teams. With over 8,000 employees worldwide, Invesco is committed to paying attention to the needs of its customers.
The Peltz Trian Fund currently has a $ 419,196,000 interest in Invesco. The Activist Fund owns 36,739,343 shares in the company, representing 6.92% of its 13F portfolio, and has returned 80% since the end of September.
In an interview with CNBC, Invesco's head of US government affairs, Andy Blocker spoke about the resilience of US markets and why we haven't seen any major market movement in light of the recent unrest in the US Capitol. Here is a quote from Blocker:
"The market has seen our democratic system last, and that's why you haven't seen these big fluctuations. If the Democrats win the Senate, the Biden administration will have the opportunity to actually implement part of their agenda. It is fully focused and all on Covid that is, we expect the Covid-19 aid package to be bigger than it would otherwise have been in a divided government, and we expect it to provide state and local government aid, as well as more aid to individuals. Although we have 40+ Infrastructure weeks during the Trump administration, I think we can actually get infrastructure relief. And then there are tax increases because you have to pay for infrastructure relief, you need some tax increases and we first think about the line, corporate taxes. We'll see that a little later in the year. All growth stocks which I think are the reflation trade and the Covid-19-H Getting the infrastructure going again, they're all going in that direction, and I think the tax hike ase part really comes in the back end of it. "
Click here to read on and see billionaire Nelson Peltz's top 5 stick picks.
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Disclosure: None. Billionaire Nelson Peltz's Top 10 Stock Picks were originally published on Insider Monkey.
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