Sarah Roden

About the Author Sarah Roden

Sarah writes about stock market news for TipRanks. She graduated as member of Phi Beta Kappa from the University of Richmond in Richmond, Virginia.

Billionaire Hedge Fund Manager Nelson Peltz Bets on General Electric Company (GE) and Mondelez International Inc (MDLZ)

In the most recent quarter, Nelson Peltz, the founder and manager of Trian Fund Mangement, made several changes to his portfolio. Although his holdings had an average loss of 8.4% in the most recent quarter, it outperformed the S&P 500 and has a current value of $11.72 billion. The most notable changes in Peltz’s holdings include General Electric Company (NYSE:GE), Mondelez International Inc (NASDAQ:MDLZ), and Wendys Co (NASDAQ:WEN).

Nelson Peltz Overview

General Electric Company

Peltz bought over 90 million shares of the automaker in the most recent quarter. GE now comprises nearly 20% of the Trian Fund, making it the fund’s largest holding valued at $2.28 billion. Peltz is now one of GE’s ten largest shareholders.

The company has achieved quite the turnaround, recently hitting a 7-year high as it recovered from the financial crisis of 2008. Peltz notes, “Management must be given credit for the transformation that is now underway.” Peltz was an advocate for GE’s decision to spin off its financial segment, GE Capital; a decision that will allow GE to focus on its core industrial market. GE Capital is made up of several segments and GE plans to complete selling off the pieces by the end of 2016. This week, the company sealed its biggest sale so far in an effort to liquate its finance arm as it spun off $79 billion Synchrony Financial, which in turn removed over 600 million shares of GE.

Like Peltz, analysts are bullish on GE. Based on the 9 analysts polled by TipRanks in the last 3 months, 7 are bullish on GE while 2 remains neutral. The average 12-month price target on the stock is $31.38, marking a 3.33% potential upside from current levels.

Mondelez International Inc

In addition, Peltz slightly upped his stake in the international snack company, which now comprises over 17% of his holdings. His 48 million shares are valued at over $2 billion. The company owns dozens of brands including Cadbury, Chips Ahoy, Wheat Things, and Oreo, just to name a few.

In the company’s most recent earnings release, analysts were reassured by the company’s strong operating income, margin expansion, and revenue growth. Analysts are bullish on the company due to its ability to outperform in a challenging macro environment. Both analysts polled by TipRanks in the last 3 months are bullish on the company with an average 12-month price target of $54.50, marking a 22% potential upside from current levels.

Wendys Co

Finally, Peltz decreased his holdings in Wendy’s by nearly 25% in the most recent quarter. Now, the fast food chain makes up only 3% of his holdings. Peltz has approximately 40.8 million shares valued at $353 million.

Wendy’s has implemented aggressive efforts to increase revenue with a recent “four for $4” promotion, in which customers can buy a cheeseburger, chicken nuggets, a drink, and french fries for $4. Although the fast food sector has suffered recently, many analysts are optimistic that it can improve as demonstrated by McDonalds’ recent turnaround.

Based on the 5 analysts polled by TipRanks in the last 3 months, 4 are bullish on Wendy’s while 1 remains on the sidelines. The average 12-month price target for the stock is $11.10, marking a 7.77% potential upside from current levels.


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