Latest news with #Trian
Forbes
3 days ago
- Business
- Forbes
Will US Exchanges Follow The Tokyo Stock Exchange (TSE)'s Lead In Nudging Chronic Underperformers?
Senso-Ji ancient buddhist temple illuminated at night in Asakusa. Senso-Ji is Tokyo's oldest and ... More most significant temple The TSE asks firms with price to book (P/B) of less than 1 to publish turnaround plans. Around 23% of US firms have a P/B less than 1. In March 2023, the Tokyo Stock Exchange (TSE) put out an interesting rule/nudge or guidance: companies on the TSE, whose P/B ratio was less than one, over multiple years, are encouraged to disclose, on an annual basis, information on specific initiatives to improve profitability and market valuation, as well as the schedule for their implementation. Companies risk delisting if these directives are not followed. This is an intriguing nudge to get under-performers to publicly discuss plans for turning themselves around or for cash hoarders to buy back stock and/or payout dividends. The rule is especially pertinent to a market like Japan where shareholder activism is still at a nascent stage which in turn makes it becomes difficult for shareholder activists such an Elliott or a Trian to target such under-performers. What is so special about P/B struggling at less than one for a while? No one ratio or metric is ever definitive. But, P/B < 1 is a quick and easy heuristic symptomatic of problems that deserve the CEO's and board's attention: (i) the company's future earnings stream does not even pay for the cost of equity held in the firm; (ii) the firm is sitting on assets over-valued in its books and the market is asking the firm to take a write down (a topic I had covered a while ago); (iii) the firm has negative debt (or cash in excess of debt) suggesting that is either under-levered or is better off returning cash to shareholders who can earn a higher rate of return than the firm can generate on cash, either held in marketable securities or invested in the business; or (iv) the firm is doing fine but the stock market has somehow not acknowledged its long term prospects. The US, to some extent, has the same problem. I found 1,547 firms, out of 6,829 firms listed on major US exchanges (including mutual funds and class A and B shares and ADRs), that report a P/B ratio of less than one as of 6/30/2025. Of these, 756 are listed on the NYSE and the remaining 791 are on NASDAQ. Of the 1,547 firms, 1,007 trade at a price above $5 a share, suggesting that many of these firms are not trivially small. Thus, 23% of US firms (1,547/6,829) or nearly a fourth of the sample have P/B ratio of less than one, despite the historical heights that US markets have scaled, of late. When I ran the same screen for the Tokyo Stock Exchange, I ended up with 1,668 firms out of a total of 4,333 firms (38%) with a P/B less than one. Yes, the proportion is higher for the TSE but a 23% number for US exchanges still sounds quite high to me. Surprisingly, many prominent US listed firms report a P/B of less than one: Citibank, Baidu, Rogers Corporation, KB Home, General Motors, Molson Coors, United Bancshares, Arcelor Mittal, Fresh Del Monte Produce, Ziff Davis, Echostar, Honda Motor Company, Deutsche Bank, Harley Davidson, Foot Locker, Murphy Oil, Sirius XM, Barclays, Paramount, Ford Motor Company, Liberty Energy, several Invesco, Nuveen and Blackrock funds, Biovie, Kohl's, Clarivate, and Lloyds Banking Corporation. Nearly a fourth of the market is simply too long a list for activists to go after, even in the US, setting aside any considerations of a financial return to activism. I have highlighted how many of these firms potentially have an agency problem in that the board or the CEO is stuck and somehow unable to break the rut and the usual checks and balance such as relatively passive institutional holders, proxy advisors or even index makers such as S&P have not pressured them to turn things around. When the usual checks and balances fail, can and should the exchange step in? Will US exchanges be willing to follow TSE's lead and announce a similar rule asking managers to share concrete plans for a turnaround? Has the TSE's plan worked in Japan? It might be too early to tell for sure but companies have started sharing concrete initiatives. For instance, A lot of this looks and sounds like Financial Management 101 but it is not a bad idea to force CEOs and boards to acknowledge their laggard status and ask for concrete steps they plan on taking to improve return on shareholder capital. What about enforcement? Aside from the threat of delisting, short-listing the P/B laggards could potentially spotlight these firms and on the margin, goad institutional investors, index providers, proxy advisors, sell side analysts and rating agencies to hold management's feet to the fire in making sure that the announced plans are followed through. Will the NYSE and NASDAQ consider TSE's out-of-the-box idea to pull up chronic under-performers?
Yahoo
16-05-2025
- Business
- Yahoo
Nelson Peltz's Strategic Moves: A Closer Look at Ferguson Enterprises Inc.
Nelson Peltz (Trades, Portfolio) recently submitted the 13F filing for the first quarter of 2025, providing insights into his investment moves during this period. Nelson Peltz (Trades, Portfolio) has been CEO and a Founding Partner of Trian since November 2005. Mr. Peltz serves as the non-executive Chairman of The Wendys Company. Peltz is also a director of The Procter & Gamble Company, Invesco Ltd., and Madison Square Garden Sports Corp. (f/k/a The Madison Square Garden Company). Trian invests in a concentrated portfolio of undervalued and underperforming public companies, typically within the Consumer, Industrial, and Financial Services sectors, where it aims to enhance long-term shareholder value through operational and strategic initiatives. Warning! GuruFocus has detected 3 Warning Signs with JHG. Trian aims to bring an ownership mentality to public market investing through the following pillars: Asymmetric Risk/Reward: Trian's focus on high-quality, mid-to-large cap companies with time-tested business models offers a favorable risk/reward dynamic and less competition among peers given barriers to entry. Long-Term, Operational Focus: Trian's private equity-like, operations-centric investment process is designed to generate income statement initiatives focused on driving earnings growth over the long term. Collaborative Engagement: Trian's approach as a highly engaged shareowner with significant reputational capital allows Trian to build trust with management teams, boards, and other stakeholders. ESG: Trian promotes and supports, particularly through board representation, the implementation of ESG initiatives that it believes will lead to improved company culture and drive long-term financial performance. Nelson Peltz (Trades, Portfolio) also increased stakes in a total of 1 stock, among them: The most notable increase was Allstate Corp (NYSE:ALL), with an additional 10,928 shares, bringing the total to 317,650 shares. This adjustment represents a significant 3.56% increase in share count, a 0.06% impact on the current portfolio, with a total value of $65,775,790. Nelson Peltz (Trades, Portfolio) also reduced positions in 2 stocks. The most significant changes include: Reduced Ferguson Enterprises Inc (NYSE:FERG) by 228,509 shares, resulting in an -18.47% decrease in shares and a -1.02% impact on the portfolio. The stock traded at an average price of $173.36 during the quarter and has returned -0.88% over the past 3 months and 5.22% year-to-date. Reduced The Wendy's Co (NASDAQ:WEN) by 101,346 shares, resulting in a -0.33% reduction in shares and a -0.04% impact on the portfolio. The stock traded at an average price of $15.04 during the quarter and has returned -14.99% over the past 3 months and -25.42% year-to-date. At the first quarter of 2025, Nelson Peltz (Trades, Portfolio)'s portfolio included 10 stocks, with top holdings including 30.84% in Janus Henderson Group PLC (NYSE:JHG), 21.59% in GE Aerospace (NYSE:GE), 17.23% in Solventum Corp (NYSE:SOLV), 11.91% in The Wendy's Co (NASDAQ:WEN), and 9.41% in Invesco Ltd (NYSE:IVZ). The holdings are mainly concentrated in 4 of all the 11 industries: Financial Services, Industrials, Healthcare, and Consumer Cyclical. This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Nelson Peltz's Strategic Moves: A Closer Look at Ferguson Enterprises Inc.
Nelson Peltz (Trades, Portfolio) recently submitted the 13F filing for the first quarter of 2025, providing insights into his investment moves during this period. Nelson Peltz (Trades, Portfolio) has been CEO and a Founding Partner of Trian since November 2005. Mr. Peltz serves as the non-executive Chairman of The Wendys Company. Peltz is also a director of The Procter & Gamble Company, Invesco Ltd., and Madison Square Garden Sports Corp. (f/k/a The Madison Square Garden Company). Trian invests in a concentrated portfolio of undervalued and underperforming public companies, typically within the Consumer, Industrial, and Financial Services sectors, where it aims to enhance long-term shareholder value through operational and strategic initiatives. Warning! GuruFocus has detected 3 Warning Signs with JHG. Trian aims to bring an ownership mentality to public market investing through the following pillars: Asymmetric Risk/Reward: Trian's focus on high-quality, mid-to-large cap companies with time-tested business models offers a favorable risk/reward dynamic and less competition among peers given barriers to entry. Long-Term, Operational Focus: Trian's private equity-like, operations-centric investment process is designed to generate income statement initiatives focused on driving earnings growth over the long term. Collaborative Engagement: Trian's approach as a highly engaged shareowner with significant reputational capital allows Trian to build trust with management teams, boards, and other stakeholders. ESG: Trian promotes and supports, particularly through board representation, the implementation of ESG initiatives that it believes will lead to improved company culture and drive long-term financial performance. Nelson Peltz (Trades, Portfolio) also increased stakes in a total of 1 stock, among them: The most notable increase was Allstate Corp (NYSE:ALL), with an additional 10,928 shares, bringing the total to 317,650 shares. This adjustment represents a significant 3.56% increase in share count, a 0.06% impact on the current portfolio, with a total value of $65,775,790. Nelson Peltz (Trades, Portfolio) also reduced positions in 2 stocks. The most significant changes include: Reduced Ferguson Enterprises Inc (NYSE:FERG) by 228,509 shares, resulting in an -18.47% decrease in shares and a -1.02% impact on the portfolio. The stock traded at an average price of $173.36 during the quarter and has returned -0.88% over the past 3 months and 5.22% year-to-date. Reduced The Wendy's Co (NASDAQ:WEN) by 101,346 shares, resulting in a -0.33% reduction in shares and a -0.04% impact on the portfolio. The stock traded at an average price of $15.04 during the quarter and has returned -14.99% over the past 3 months and -25.42% year-to-date. At the first quarter of 2025, Nelson Peltz (Trades, Portfolio)'s portfolio included 10 stocks, with top holdings including 30.84% in Janus Henderson Group PLC (NYSE:JHG), 21.59% in GE Aerospace (NYSE:GE), 17.23% in Solventum Corp (NYSE:SOLV), 11.91% in The Wendy's Co (NASDAQ:WEN), and 9.41% in Invesco Ltd (NYSE:IVZ). The holdings are mainly concentrated in 4 of all the 11 industries: Financial Services, Industrials, Healthcare, and Consumer Cyclical. This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-02-2025
- Business
- Yahoo
Trian Comments on Solventum's Sale of its Purification & Filtration Business
NEW YORK, Feb. 26, 2025 (GLOBE NEWSWIRE) -- Trian Fund Management, L.P. ('Trian'), which beneficially owns ~5% of Solventum Corporation (NYSE: SOLV) ('Solventum' or the 'Company') and is the Company's largest active shareholder, commented on Solventum's recently announced sale of its Purification & Filtration business to Thermo Fisher Scientific Inc (NYSE: TMO) ('Thermo Fisher'). Trian issued the following statement: 'Trian commends Solventum on the announced sale of its Purification & Filtration business and believes this is an important first step in the Company's value creation journey. We believe that part of what attracted strategic interest at such a high valuation multiple was the division's differentiated technology and material science – attributes inherited from 3M which are present at Solventum's remaining businesses, and which we believe remain underappreciated by the market today. Notably, in conjunction with the acquisition, Thermo Fisher issued public comments which Trian believes confirm that there is a meaningful cost reduction opportunity at Solventum: 'Excluding financing costs, the transaction is expected to be accretive by $0.28 in that period. This reflects the very strong day one cost synergies when Solventum's allocated segment costs are replaced by lower run rate costs within Thermo Fisher.' Thermo Fisher's release goes on to suggest that it believes it can more than double the profitability of Purification & Filtration under its corporate umbrella, relative to the business' current profit as part of Solventum, with much of that improvement driven by lower allocated costs. Trian, in its January letter to shareholders, highlighted that Solventum has a significant opportunity to right size costs and realize higher margins while reinvesting more in growth. Inside of 3M, Solventum averaged 3-4% organic growth and a 26-27% EBIT margin. Trian believes that Solventum should be able to deliver faster organic growth and higher margins as a focused, standalone company. Trian looks forward to the Company delivering a Long Range Plan that reflects the business' potential when it hosts its investor day in March.' About Trian Fund Management, L.P. Founded in 2005, Trian Fund Management, L.P. ('Trian') is a multi-billion dollar investment management firm. Trian is a highly engaged shareowner that combines concentrated public equity ownership with operational expertise. Leveraging the 50+ years' operating experience of our Founding Partners, Nelson Peltz and Peter May, Trian seeks to invest in high quality but undervalued and underperforming public companies and to work collaboratively with management teams and boards to help companies execute operational and strategic initiatives designed to drive long-term sustainable earnings growth for the benefit of all shareholders. Media Contacts: Anne A. Tarbell(212) 451-3030atarbell@ Paul Caminiti / Pamela Greene / Jacqueline ZuhseReevemark(212) 433-4600Trian@ Investor Contact: Matt Underhill(212) 451-3171munderhill@ Disclaimer Except as otherwise set forth in this press release, the views expressed in this press release reflect the opinions of Trian Fund Management, L.P. and its affiliates ('Trian'), and are based on publicly available information with respect to Solventum Corporation (the 'Company'). Trian recognizes that there may be confidential information in the possession of the Company that could lead it or others to disagree with Trian's conclusions. Trian reserves the right to change any of its opinions expressed herein at any time as it deems appropriate and disclaims any obligation to notify the market or any other party of any such change, except as required by law. Trian disclaims any obligation to update the information or opinions contained in this press release. For the avoidance of doubt, this press release is not affiliated with or endorsed by the Company. This press release is provided merely as information and is not intended to be, nor should it be construed as, an offer to sell or a solicitation of an offer to buy any security nor as a recommendation to purchase or sell any security. Funds managed by Trian currently beneficially own shares of the Company. These funds are in the business of trading – buying and selling– securities and intend to continue trading in the securities of the Company. You should assume such funds may from time to time sell all or a portion of their holdings of the Company in open market transactions or otherwise (including via short sales), buy additional shares (in open market or privately negotiated transactions or otherwise), or trade in options, puts, calls, swaps or other derivative instruments relating to such shares. Some of the materials in this press release contain forward-looking statements. All statements contained herein that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words 'anticipate,' 'believe,' 'expect,' 'potential,' 'could,' 'opportunity,' 'estimate,' 'plan,' and similar expressions are generally intended to identify forward-looking statements. The projected results and statements contained herein that are not historical facts are based on current expectations, speak only as of the date of these materials and involve risks, uncertainties and other factors that may cause actual results, performances or achievements to be materially different from any future results, performances or achievements expressed or implied by such projected results and statements. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Trian. Certain financial projections and statements made herein have been derived or obtained from filings made with the Securities and Exchange Commission ('SEC') or other regulatory authorities and from other third-party reports. Trian shall not be responsible or have any liability for any misinformation contained in any third-party, SEC or other regulatory filing or third-party report. There is no assurance or guarantee with respect to the prices at which any securities of the Company will trade, and such securities may not trade at prices that may be implied herein. The estimates, projections and potential impact of the opportunities identified by Trian herein are based on assumptions that Trian believes to be reasonable as of the date of this press release, but there can be no assurance or guarantee (i) that any of the proposed actions set forth in this press release will be completed, (ii) that the actual results or performance of the Company will not differ, and such differences may be material, or (iii) that any of the assumptions provided in this press release are accurate. This press release does not recommend the purchase or sale of any security.
Reuters
26-02-2025
- Business
- Reuters
Nelson Peltz's Trian to push Solventum to further simplify business, WSJ reports
Feb 26 (Reuters) - Activist investor Nelson Peltz's Trian Fund Management plans to push Solventum (SOLV.N), opens new tab for further business separations following the company's $4.1 billion filtration unit sale, the Wall Street Journal reported on Wednesday, citing people familiar with the matter. Contract drug manufacturer Thermo Fisher Scientific (TMO.N), opens new tab said on Tuesday it would buy Solventum's purification and filtration business for about $4.1 billion. Advertisement · Scroll to continue Trian said in a statement on Wednesday it considers the deal "an important first step in the company's value creation journey" and added that there is a meaningful cost reduction opportunity at Solventum. The hedge fund, which owns around 5% of Solventum's shares and is the largest active shareholder, further said that it believes Solventum "should be able to deliver faster organic growth and higher margins as a focused, standalone company". In January, Trian said in a letter to Solventum's shareholders that the company should simplify its segments to improve execution at its core medical surgery business. The divestitures could accelerate Solventum's ability to reduce debt and help the company allocate resources for dividends, share repurchases and mergers and acquisitions, Peltz's fund had said. A spokesperson for Solventum said, "We are excited about the rapid progress we are making to transform Solventum and look forward to continuing to drive value for shareholders." Keep up with the latest medical breakthroughs and healthcare trends with the Reuters Health Rounds newsletter. Sign up here.
