Equity Highlights June 2024

Welcome to Broyhill's Equity Highlights, where we share a few quick takes on recent news across the portfolio every month.  

We aim to make these highlights easy to read and easy to repeat. Feel free to share our work! 

Ozempic Lawsuit: What You Need To Know (2024 Update). Lawsuits are being filed against GLP-1 manufacturers over the dangerous side effects of weight loss drugs. When we put together a basket of anti-GLP stocks, our thesis was that the proliferation of weight loss drugs would represent a smaller risk to our basket than the market thought. We detailed our anti-GLP pitch in our recent deck, Intro to Broyhill & Other Obese Americans.

Paramount Co-CEOs Tell Staff That With Skydance Deal Dead, “Work Is Already Underway” on Their Strategic Plan. After several months of back and forth, Paramount announced that the Skydance deal was dead and that the management team was already implementing a strategic plan for the company. We liquidated our small position in PARA when the news broke. While we still believe Shari Redstone is a willing seller, we lost confidence that Shari is willing to negotiate with the best interests of minority shareholders in mind.

Activist Investors Have a Simple Message for London Firms: List Elsewhere. Trian Fund Management recently amassed a stake in Rentokil, a UK-based pest control company. One of the activist's main calls to action is for the company to list in the US for better liquidity and access to a larger investor base. The stock jumped 16% on the news of Trian's stake. We have encouraged the team at Reckitt Benckiser, a portfolio holding that also suffers from poor liquidity, to list in the US.

Dollar General, DocGo call time on rural healthcare pilot. In addition to ditching its healthcare pilot, Dollar General has been transitioning pOpshelf stores to Dollar General stores as its customer base continues to prioritize consumables spending. Dollar General has been plagued with retail theft and poor store conditions after adding new stores too quickly in the last few years. We are glad to see Dollar General advancing its "Back to Basics" initiative and expect greater focus to translate to improved fundamentals.

Disclosures