There was a bit of interesting drama at DuPont’s (DD) recent annual meeting.
In recent weeks, there has been a contentious contest for 4 board positions initiated by activist shareholder Nelson Peltz.
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It is his position that there is considerable value to be realized in cost cuts and the restructuring or splitting of operations.
The company has pointed to its own restructuring initiatives and strong relative financial and stock market performance over the past 5 years.
Shareholders sided with management with the most surprising development being that the Peltz group did not pick up a single board seat.
This recent weakness in the stock price is indicative of selling by those hoping for the Peltz related scenario versus a more long-term proposition offered by management.
Despite today’s developments and stock price weakness, Timberline is currently retaining the DuPont position.
Going forward, I believe management is going be under the microscope and very accountable for the case it has made for themselves.
If management comes up short, Mr. Peltz is likely going to be around with a plan that many have already found to be attractive.
The investments discussed are held in client accounts as of May 14, 2015. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
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