Morning Brief: Investors Are Unimpressed With Newell Proxy Fight

February 12, 2018   Stephen Taub

The company’s shares fell in spite of its being identified as an activist target of Jeffrey Smith’s Starboard Value.

Shares of Newell Brands fell more than 1 percent, to $27.61, on an otherwise strong day for the stock market, even though it was publicly identified as a target of a proxy fight. The conglomerate confirmed in a press release that Jeffrey Smith’s Starboard Value and Opportunity Master Fund told the company it plans to nominate ten individuals to the board of directors at the 2018 annual meeting. Newell, which owns Rubbermaid Commercial Products, Rawlings, U.S. Playing Cards, and other well-known consumer brands, stressed that eight of its current nine directors are independent.

"The Newell Board recognizes the importance of having the right mix of skills, expertise and experience and is committed to continuously reviewing its capabilities and ongoing refreshment on behalf of shareholders," it added.

It also detailed its financial accomplishments and its strategy "to outgrow and outperform the competition." According to the Wall Street Journal, Starboard is teaming up with three former executives of Jarden Corp., which Newell acquired less than two years ago for $15 billion. They include Martin Franklin, the former chairman of Jarden who resigned from Newell’s board a month ago after failing to take control of the board, according to the Journal.

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Shares of Chipotle Mexican Grill fell another 4 percent, to $255.46, just about its lowest stock price in more than five years. This is especially troubling given that the overall stock market finished up strongly on Friday. The stock is a major activist position of Bill Ackman’s Pershing Square Capital Management.

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What a difference a week or so makes. Macro funds gained 3.53 percent in January, their best aggregate month since before the 2008 global financial crisis, according to a new monthly report from eVestment. The ten largest macro funds returned closer to 2.22 percent, but this was still their best gain since October 2016. Altogether, eVestment says hedge funds gained, on average, 2.59 percent in January, the best monthly return since March 2016.

Hedge funds in aggregate have now posted gains for 15 straight months. Altogether, 81 percent of hedge funds that report to eVestment were in the black last month, the largest share since February 2014. The profitable funds were up, on average by 3.5 percent. Managed futures were up 4.72 percent last month, their best monthly gains since early 2008.


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