Jeffrey Ubben’s San Francisco-based ValueAct Capital Partners has seemingly moved on to its newest activist target. ValueAct said it owns 5.44 percent of Rolls-Royce, a London-based company that makes engines for airplanes, autos and other vehicles, according to the Financial Times.
“ValueAct has been an investor before and we constructively engaged with them before,” a Rolls-Royce spokesman said, according to the report. “We welcome any investor who recognizes the long-term value of our business. We look forward to engaging with ValueAct, just as we do with all investors.”
The paper points out that Rolls-Royce recently issued its fourth earnings warning in 18 months while a new chief executive is taking over. ValueAct has about 15 different investments, including Valeant Pharmaceuticals and Microsoft. Interestingly, MarketFolly recently reported that Stephen Mandel Jr.’s Greenwich, Connecticut-based Lone Pine Capital is short Rolls-Royce.
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Deutsche Bank trimmed its price target on hedge fund favorite Priceline.com to $1307 from $1325, explaining that it sees “upside as somewhat limited near term given heightened expectations at Priceline” on its second-quarter bookings and on margin guidance. The bank also maintained its Hold recommendation on the stock. At the end of the second quarter, the stock was the largest position for Lone Pine. At the end of the first quarter, at least ten funds with some sort of connection to Julian Robertson Jr.’s New York-based Tiger Management had a position in the stock. It was also the third-largest position for David Tepper’s Short Hills, New Jersey-based Appaloosa Management.
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At least two investment banks raised their target price on Monzelez International, a favorite of activist firm Trian Fund Management, after the food and beverage giant reported strong second quarter earnings and revenues. It also announced a new $6 billion stock buyback. Deutsche Bank lifted its target from $46 to $49, while Credit Suisse raised its target on the stock from $48 to $52.
“The good news included an increase in guidance” to offset dilution over the short term from a coffee joint venture, the bank states in a note to clients. Credit Suisse was also happy to see the company increase its revenue guidance to “at least 3 percent organically,” noting that “investors’ biggest hang-up with Mondelez is the lack of revenue growth.” Adds Deutsche Bank in its note to clients: “We believe Mondelez is finally starting to live up to its potential.”
Nelson Peltz’s New York-based Trian has been one of the company’s largest shareholders and has been pushing Monzelez to merge with PepsiCo’s snack business, assuming the soft drink giant agrees with the idea.
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Deutsche Bank cut its price target on Starwood Hotels & Resorts from $98 to $90 after hotel giant IHG announced it was not in merger discussions with Starwood. The bank, however, did maintain its Buy rating, noting it still sees some revenue avenues. On July 28 we reported that Daniel Och’s OZ Management, operated by Och-Ziff Capital Management, disclosed that it owns more than 8.6 million shares of Starwood, or 5.05 percent of the total outstanding. This is more than triple what the firm owned at the end of the first quarter.
