Some investors decry the purpose of activist investors as muddying the waters of the financial system or creating a misleading narrative that suits their own self interests. That said, in many cases, activist investors can provide retail investors like you and me with the push needed to recognize the undervalued nature of a company.
In this article, I'm going to highlight this relationship using Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) as the example.
Restaurant Brands is a company touted in the past for its highly defensive business model as well as its ability to both weather this economic crisis but also come out of this pandemic with earnings growth the likes of which the broader market will not see.
While some may have seen this value early and bought the dip the market provided in recent months, it really took the public announcement of Restaurant Brands as a core holding of activist investor Bill Ackman to push shares meaningfully higher.
Ackman reiterated the sentiment of various value investors everywhere and simply utilized his platform to spread the word. This has sparked momentum for Restaurant Brands’ shares, something that has been missing in recent years.
Whether because of a realization that Restaurant Brands’ shares were truly undervalued or the hope that Bill Ackman could bring about some strategic change within the company, investors have largely applauded the move.
I expect to see more strategic shifts announced in the coming weeks, as Restaurant Brands moves toward searching for new areas of growth in a market which is contracting.
Invest wisely, my friends.
