Yum! Brands looks like the new hot hedge fund activist favorite. CNBC’s Scott Wapner reports that Keith Meister of Corvex Management plans to discuss the stock Monday at the (Ira) Sohn Investment Conference in New York. Meanwhile, on Friday Daniel Loeb’s Third Point disclosed in its first quarter letter that Yum! is one among several new holdings taken in the first quarter. The fast-food company is best known for its Kentucky Fried Chicken, Pizza Hut and Taco Bell. Third Point said it initiated the position “based on our view the company was in the early stages of turning the page on recent troubles in its Chinese business,” the hedge fund said in its report, referring to two supplier-related food safety incidents. The hedge fund is anticipating a “dramatic profit recovery over the next 12-24 months.” Third Point deems Yum! Brands a play on the middle-class growth story in China and its “strong and growing franchise-led cash flows outside China.”
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In the first quarter, Third Point also initiated a position in Devon Energy, an oil exploration and production company. “Devon stands out by combining limited downside with an underappreciated, valuable asset base that can be unlocked through continued portfolio management and improved operations,” the Third Point report said. Third Point Offshore Fund was up 3.3 percent in the first quarter. The investment accounts of Third Point Re, which are managed by Third Point, were up 0.5 percent in April and 3.6 percent for the year-to-date.
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Tiger Global Management’s venture capital arm is one among a number of investors to participate in the $100 million, Series D financing of online eyeglass company Warby Parker. This is at least the third investment made in the company by the New York investment firm, according to crunchbase.com. The Wall Street Journal reported that Warby Parker is now worth more than $1 billion. Separately, Tiger Global reported in a regulatory filing that it trimmed its stake in Zhaopin, a Chinese online jobs recruitment company, to 2.3 million shares represented by 1.15 American Depositary Shares. This is down from 2.55 million shares, or 1.275 million ADS’s at year-end.
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Talk about locking the barnyard gate after the horses got out. UBS on Friday cut its price target on LinkedIn from $295 to $230 after shares of the online professional network company plunged by 25 percent in after-hours trading when the company slashed its profit forecast and cut its revenue guidance. The stock Friday wound up closing down nearly 19 percent, to $205.21. Still, UBS seems to like the stock. The firm kept its Buy rating even though its new target is more than $22 below Thursday’s closing price. Interestingly, on Thursday the stock closed down nearly 2 percent ahead of the earnings warning. At the end of the fourth quarter, Philippe Laffont’s Coatue Management was the eighth-largest shareholder.
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Through April 24 — with four trading days to go — Alan Howard’s BH Macro fund was down 0.57 percent for the month, cutting the gain for the year to 2.31 percent.
