You have to admire the market timing skills of Nelson Peltz and his cohorts at hedge fund Trian Fund Management.
On Monday and Tuesday of this week, they sold 1 million shares of Tiffany valued at $45.7 million. Two thirds of the shares were sold for $45.65 per share, and the rest for just pennies less than $46.
Sure enough, on Thursday morning shares of the jewelry seller dropped by about 3 percent, to some $44 a share. The reason: Goldman, Sachs & Co. had downgraded Tiffany’s stock from neutral to sell. According to published reports, the investment bank set a new price target of $41, citing tough sales comparisons and rising marketing costs.
Keep in mind that billionaire investor Peltz was Tiffany’s largest shareholder as of the end of the second quarter. Tiffany was also Trian’s largest holding among just 13 holdings whose total value was roughly $1.6 billion. Trian still owns more than 6.8 million shares of Tiffany.
Trian is also the largest shareholder of longtime holding Wendy’s/Arby’s Group, which was the investor’s second-largest position at the end of the second quarter. It could be its No. 1 holding after the Tiffany sales.
Peltz first gained fame with partner Peter May in the 1980s, when their Triangle Industries acquired National Can Co. and eventually sold it for $4.2 billion. He is also renowned for the big gains he made on Snapple after selling it to Cadbury Schweppes for $1.5 billion.
Peltz is generally known as a patient investor who tries to unlock value. However, earlier this year he unloaded his entire stake in Kraft Foods only months after acquiring the position.
