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