Long Term Returns of Scott Ferguson’s 5 Activist Targets

In this article, we discuss long-term returns of Scott Ferguson’s 5 activist targets. If you want to see more stocks in this selection, check out Long Term Returns of Scott Ferguson’s Activist Targets.

5. Elanco Animal Health Incorporated (NYSE:ELAN) 

Activist Investment: 2020
Long Term Returns Since Ferguson’s Investment: -36%
S&P 500 Gain Since Ferguson’s Investment: 79%

Elanco Animal Health Incorporated (NYSE: ELAN) is a company focused on the development, manufacturing, and marketing of products for both pets and farm animals within the animal health industry. It also offers pet health disease prevention products such as pesticides and vaccines. Through his hedge fund, Sachem Head Capital, Ferguson took a $1.2 billion stake in the company in 2020.

With the investment, the activist investor started pushing for changes, insisting that the company was undervalued and an attractive investment. The hedge fund opened discussions with management to see ways of boosting sales and improving margins. Ferguson was consequently appointed to the company’s board when the company was under scrutiny for missteps, including its poorly timed acquisition of Bayer’s AGs animal health for $6.9 billion.

Ferguson stepped down from the board as he sought to focus on other commitments under Sachem Head. He stepped down while insisting Elanco Animal Health Incorporated (NYSE:ELAN) had succeeded in establishing the right plan to create shareholder value through sustained cost discipline and developing an innovation pipeline.

4. US Foods Holding Corp. (NYSE:USFD)

Activist Investment: 2021
Long Term Returns Since Ferguson’s Investment: 17.6%
S&P 500 Gain Since Ferguson’s Investment: 19.85%

US Foods Holding Corp. (NYSE: USFD) is involved in the marketing, sales, and distribution of fresh and frozen food products, as well as non-food items, to food service customers across the United States. Sachem confirmed it owned 5.1% stakes in the food company in 2021 and announced plans to push for changes after holding stakes since 2018.

The activist investor insisted that a shakeup of the 10-member board was necessary to boost the stock price by 100%. A fierce battle would ensue between the activist investor and the company, leading to the resignation of CEO Pietro Satriano in 2022. The CEO stepping down resulted in the activist investor reaching an agreement to end the high-profile corporate fight and giving three new independent directors slots.

The hedge fund had been pushing for changes at the company, disgruntled by its performance. US Foods Holding Corp. (NYSE:USFD) had struggled to keep up with competitors, including Sysco, due to inflation and supply chain constraints at the height of the pandemic.

3. International Flavors & Fragrances Inc. (NYSE:IFF)

Activist Investment: 2021
Long Term Returns Since Ferguson’s Investment: -44%
S&P 500 Gain Since Ferguson’s Investment: 20.85%

Together with its subsidiaries, International International Flavors & Fragrances Inc. (NYSE:IFF) manufactures and sells cosmetic active and natural health ingredients. The company operates through four segments: Nourish, Scent, Health & Biosciences, and Pharma Solutions. In early 2021, activist investor Sachem Head Capital Management confirmed a $1 billion stake in the ingredients and chemical company.

The investment came on the heels of the company completing a $26.2 billion merger with DuPont’s nutrition unit. Ferguson pushed the company to improve its financial performance and integrate the new unit smoothly.

To starve broader activist push, International Flavors & Fragrances Inc. (NYSE:IFF) offered Sachem Head Capital a seat on the board.

Following the agreement, the activist investor agreed to temporarily not take an activist role in influencing shareholders. The hedge fund also agreed not to acquire more than 4.99% of the company’s outstanding shares.

2. Anaplan, Inc. (NYSE:PLAN)

Activist Investment: 2022
Long Term Returns Since Ferguson’s Investment: 31%
S&P 500 Gain Since Ferguson’s Investment: -19%

Anaplan, Inc. (NYSE:PLAN) operates a purpose-built platform for connecting people, data, and plans. Therefore, the company can deliver a unified real-time cloud-based environment that helps optimize planning and democratize decision-making across all lines.

Activist investors Sachem Head Capital and Corvex Management disclosed stakes in the financial planning software company in 2022 and detailed plans to install four people on the board. Sachem Head Capital bought about a 9% stake in Anaplan, Inc. (NYSE:PLAN) and planned to push for changes, including business sales, to help unlock shareholder value.

The two activist investors got the right to appoint four people, including Ferguson, to Anaplan, Inc. (NYSE:PLAN)’s board after insisting the company’s shares were undervalued and presented an attractive investment opportunity.

With control of the board, the activist investor would engineer a deal that resulted in private equity giant Thoma Bravo taking the enterprise software firm private in a $10.7 billion deal in 2022.

1. Arconic Corporation (NYSE:ARNC) 

Activist Investment: 2023
Long Term Returns Since Ferguson’s Investment: 38%
S&P 500 Gain Since Ferguson’s Investment: 12.9%

Arconic Corporation (NYSE:ARNC) is a company that manufactures and sells fabricated aluminum sheet plates and architectural products and systems. The company functions through three divisions: Rolled Products, Building and Construction Systems, and Extrusion.

It is the latest company to attract interest from activist investor Sachem Head Capital, which has accrued a significant stake,

The activist investor has been pushing the aluminum maker to consider selling itself as one of the acts of unlocking value. There are reports that Apollo Global considered making an offer for the company in the region of about $27 and $28 a share in April of 2023.

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