Consumer Goods | United States
WSD Target Price
Annualized Return Since Publication
Target Equity Value (Δ)
Source: Bloomberg end of day market data; not adjusted for dividends (November 27, 2017).
Returns assume a long investment position on the date that WSD Capital Management published its thesis, and an exit on the date that the WSD Target Price is realized.
Returns do not reflect any fees, expenses or taxes.
The returns are hypothetical and do not reflect the actual results of WSD Capital Management’s investment activities, nor is it necessarily indicative of future results of WSD Capital Management’s investment activities.
Tyson Foods (“Tyson”) is one of the world’s largest food companies and a market leader in chicken, beef, and pork. The company supplies retail and foodservice customers throughout the United States and approximately 115 countries.
WSD Capital Management announced its investment in Tyson on February 6, 2017. We believe that the price collusion lawsuit will continue to act as a valuation overhang on Tyson's equity, which creates a special situation. We see opportunities to improve performance through a leaner cost structure as Tyson’s management realizes synergies in its prepared foods segment to allow for core investments in operational improvements that could result in production and labor efficiencies, yield improvements and sales channel flexibility.
We believe that the strategy currently being pursued by Tyson’s management and board is broadly in line with strategic priorities that can generate growth and attractive shareholder returns while it adapts to evolving product demand and sharpens its focus on the company's core businesses.
In July 2017, a federal judge dismissed the shareholders' lawsuit. Separately, on August 25, 2017, Tyson announced that the Securities and Exchange Commission has concluded its investigation into price-fixing allegations and does not intend to recommend an enforcement action.
We exited our investment in Tyson after the company’s common stock realized its target price in November 2017.