Summary:
- Icahn and Starboard built positions in Newell Brands. Starboard will no longer try to replace the entire board. Both activists have seats with Icahn supporting the current plan.
- The Jarden acquisition was ridiculously expensive and promised growth and profits have yet to be realized.
- The company is riskier than investors may realize. EPS is guided as flat while Wall Street expects sales to drop.
- At 9.5x EV/EBITDA the company is not a bargain but worth watching.
After striking a deal with Carl Icahn, Newell Brands (NWL) reached a deal with a second activist investor, Starboard Capital. Starboard and Icahn own 3.8% and 6.9% respectively. The deal leaves the CEO, Michael Polk, in place. Their bet on the man and the company is not at the right price in my opinion. The company carries some well known U.S. brands and that is what has attracted investors. But, the company has not been well-run, appears to be in constant restructuring and is facing significant headwinds not priced into the stock. Essentially it is exposed to retail yet trades a premium to retail-related stocks in general. Having said that, the stock could become very interesting at lower prices.
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