Deals
Activist Fund Makes the Case for US Foods Boosting Its Earnings
- Hedge fund says company could generate $3 cash EPS in 2020
- Sachem Head took 2 percent US Foods stake, sees Sysco as model
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Activist fund Sachem Head Capital Management contends US Foods Holding Corp. is undervalued relative to its food-distribution peers and could better its performance through steps such as improving prices and courting high-margin customers.
The New York-based hedge fund run by Scott Ferguson said in a letter to its investors that US Foods could benefit from many of the steps taken by its rival Sysco Corp., which was targeted in 2015 by investor Trian Fund Management. Ferguson said in addition to structural industry growth, US Foods could significantly improve margins.