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Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake

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·3 min read
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- By Graham Griffin

Nelson Peltz (Trades, Portfolio)'s Trian Fund Management has revealed the largest reduction this year in its Procter & Gamble Co. (NYSE:PG) holding according to GuruFocus' Real-Time Picks, a Premium feature.


Trian Fund Management was established in 2005 by co-founding partners Nelson Peltz (Trades, Portfolio), Peter William May and Edward Patrick Garden and is currently based out of New York City. The company utilizes a fundamental analysis to make its investment decisions in various public equity and alternative investment markets on a global scale, focusing on locating undervalued stocks.

On May 6, the firm cut its Procter & Gamble (NYSE:PG) holding by 34.81% with the sale of 3.09 million shares. The sale was the largest to occur since the second quarter of 2020 and marks the sixth quarter in a row that shares were sold. On the day of the transaction, the shares traded at an average price of $134.55. The sale had a -6.16% impact on the equity portfolio and GuruFocus estimates the total gain of the holding at 38.54%.

Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake
Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake

Since its founding in 1837, Procter & Gamble has become one of the world's largest consumer product manufacturers, generating more than $70 billion in annual sales. It operates with a lineup of leading brands, including 21 that generate more than $1 billion each in annual global sales, such as Tide laundry detergent, Charmin toilet paper, Pantene shampoo and Pampers diapers. P&G sold its last remaining food brand, Pringles, to Kellogg in 2012. Sales outside its home turf represent around 55% of the company's consolidated total, with around one-third coming from emerging markets.

As of May 13, the stock was trading at $135.37 per share with a market cap of $335.87 billion. According to the GF Value Line, the stock is trading at a fair value rating.

Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake
Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake

GuruFocus gives the company a financial strength rating of 6 out of 10, a profitability rank of 7 out of 10 and a valuation rank of 2 out of 10. There are currently no severe warning signs issued for the company. The company's strong profitability rank is boosted by operating and net margins that outdo over 90% of competitors and the return on invested capital has consistently supported the weighted average cost of capital over the last decade.

Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake
Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake

Other top gurus invested in Procter & Gamble include Ken Fisher (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio) and Yacktman Asset Management (Trades, Portfolio).

Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake
Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake

Portfolio overview

At the end of the fourth quarter, the firm's portfolio contained eight stocks with no new holdings. It was valued at $6.76 billion and has seen a turnover rate of 3%. Top holdings at the end of the quarter were Sysco Corp. (NYSE:SYY), Procter & Gamble, Comcast Corp. (NASDAQ:CMCSA), Mondelez International Inc. (NASDAQ:MDLZ) and Invesco Ltd. (NYSE:IVZ).

Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake
Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake

By weight, the top three sectors represented are consumer defensive (53.46%), financial services (17.35%) and communication services (15.40%).

Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake
Nelson Peltz's Firm Takes a Chunk Out of Procter & Gamble Stake

Disclosure: Author owns no stocks mentioned.

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This article first appeared on GuruFocus.