Nelson Peltz Bet On UST Pays Off...What's Next?

Nelson Peltz made some smart bets in his last 13F filing (June 30th), where he disclosed he owned UST (NYSE: UST), Lorillard (NYSE: LOR) and Philip Morris (NYSE: PM). Today, UST is jumping on wide speculation that Altria (NYSE: MO) may be purchasing it. Altria is perhaps looking at UST because it is trying to gain a foot hood in the smokeless tobacco sector.

Today, UST has risen more than $13 or 24% to above $67. With Nelson Peltz owning just a 1 million shares, his gain is just under $13 million for today. Not a bad day.

Beyond owning UST, activist investor, Nelson Peltz, has built stakes in two other tobacco companies, including Philip Morris (NYSE: PM) and Lorillard (NYSE: LO). Philip Morris is trading up slightly while Lorillard is up over 4% today. Peltz took a concentrated bet on the tobacco industry in his last filing, similar to what he has done with some of his restaurant investments.

In Peltz's June 30th filing, he established a new stake in restaurateur, PF Changs Chinese Bistro (Nasdaq: PFCB). It is not a significant stake (1,060,875 shares), but one where his team sees value in PF Changs. Additionally, he has stakes in Wendy's (NYSE: WEN) and Cheesecake Factory (Nasdaq: CAKE).

Peltz has been successful with finding undervalued companies and then selling out at a premium. Thus far, his tobacco play has proved to be wildly successful, and I would consider following him into some of the above mentioned restaurant plays. As the market has fallen and valuations dropped, I wouldn't be surprised if strategic buyers come in and buy Cheesecake Factory or PF Changs on weakness.

Sign up at EasyStockAlerts.com To Be Alerted To Your Stock News Today!

You May Also Be Interested In

• Price choppiness and volatility is here to stay - BMO
• IMAC Holdings (BACK) halted on volatility, up 38%
• AGBA Group Holding (AGBA) selling off into close, down over 17%