Brendan Wood International Investor Conviction Intel – Industrials – December 2023

3M Co: 3M Investor Commitment to Own increased by 43% from 3Q 2023 to 4Q 2023 at December 11th. This was one of the largest increases in this reporting period for the multi-industry sector because investors see Short Term opportunity with a potential break up and settling their legal disputes. The Shareholder Confidence Index score increased by 17% from 3Q to 4Q as at December 11th. Investor Confidence in 3M’s Short Term Growth, Momentum, Price Appreciation Potential and Transparency were the metrics that increased the most. Despite the increase in Commitment to Own, some investors would like a board and management refresh. Investors who are on the sidelines as 3M splits up their businesses, acknowledge that over time 3M will be a cleaner business but they are not ready to pull the buy trigger on the stock just yet. Investors who are negative on 3M view the company as one name which will go down in the history books for destroying the environment and look at it as uninvestable. (Click here for the Excerpts on 3M Co).

Norfolk Southern Corporation: The rails are starting to appear more attractive to longer-term focused investors. Investors say Norfolk Southern is viewed as one of the only rails with turnaround potential because they are seen as an activist target. The jury is out on CEO Alan Shaw for the lack of oversight and maintenance causing the Ohio derailment. On the flip side, some say that there are positive changes taking place at Norfolk such as new train crews and policies indicating that Norfolk Southern is shifting from a bad to a better operator. On the BWI Shareholder Confidence Index, Norfolk sat the lower end with a score of 399 out of 1000 as of 3Q, and has increased 2% during 4Q 2023 as at December 11th.

Kion Group AG: According to investors, there have been a series of management changes at Kion Group along with execution issues, and the acquisition of Dematic concerned investors. Although the Dematic acquisition was in 2016, investors have continued to expressed dissatisfaction with the timing and pricing of the deal. These investors say that management has not executed nor proven the Dematic acquisition to be an accretive deal. However, more construction investors feel that the quality of Kion’s balance sheet strength is misunderstood and undervalued. These investors also feel that in comparison to peers, Kion has the most growth potential. Kion Group is one of the most talked about turnaround names in the BWI Shareholder Confidence Index. Investor Commitment to Own Kion Group AG increased 10% from 3Q to 4Q 2023 as at December 11th.

Below, we outline the companies with the biggest Quarter Over Quarter changes in the Commitment to Own.

Largest Commitment to Own Changes (Quarter over Quarter) (4Q2023 at December 11th vs. 3Q2023):

Wajax Corporation +57%
3M Co +43%
Aecon Group Inc +27%
General Dynamics Corp +23%
Air Canada -32%
Boeing Co -26%
Alaska Air Group Inc -24%
Autoliv Inc. -23%

The views for 4Q represent the positive and negative trends up to December 8th. While results might fluctuate by quarter end, this reflects current investor views.

If you have any inquires in regards the shareholder conviction index and/or the above results, please reach out to the undersigned.

Brendan Wood International (BWI) serves a dual clientele of world leading investors and their corporate investment targets as well as broker dealers who provide research, sales and trading services to the investment community. Big cap companies looking for comprehensive investor confidence data on their organizations are likely to discover that Brendan Wood partners consult with their investors non stop year round. Investors depend on BWI to quantify the demand side of the investment industry across 1400 names worldwide, including the name by name research sales and trading professionals who influence investor demand.

About Brendan Wood International:
Brendan Wood International (BWI), formed in 1970, is a private advisory group which originates performance investigation programs in the capital markets. Brendan Wood Partners debrief large institutional investors worldwide on a daily basis. There are 2000+ live consultations with professionals overseeing +/- $55 trillion invested in the +/- 1400 big cap companies on the BWI Index. Relying on its real time performance intelligence, BWI advises public companies, institutional and activist investors, investment banks and broker dealers on strategy, performance and recruitment of TopGun talent. The firm’s partners have formally presented at 1000+ C level strategy meetings and corporate off-sites in fifty cities. Brendan Wood founded the exclusive TopGun Club, a performance based institution.

Disclaimer:
We wish to emphasize that all reports, evaluations and assessments contained herein, represent Brendan Wood International’s subjective judgment and opinions, based on our years of experience and on information obtained by us in the course of our research. Much of the factual information contained in the reports has been obtained by us from third parties on whose responses we have relied in good faith, independent verification by Brendan Wood International being, under the circumstances, impossible. While we believe that you will find our reports to be an invaluable tool in formulating your own strategies and judgments, the foregoing should be borne in mind. This report is not meant as investment advice and should not be interpreted as advising on the value of a company’s securities, the advisability of investing in, purchasing or selling any company’s securities or any other conclusion relating to investment/divestiture of a company’s securities. Finally, this report is not intended as an offer or solicitation for the purchase or sale of any company’s securities.

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Jordan Novak
Partner
Brendan Wood International
+1 416 924 8110
jnovak@brendanwood.com

Ajay Walia
Managing Director
Brendan Wood International
+1 416 924 8110
awalia@brendanwood.com