Nelson Peltz Joins Warren Buffett With Ingersoll-Rand (IR, BRK-A, BRK-B)

Ingersoll-Rand Plc (NYSE: IR) is often overlooked as a key company despite a nearly $13 billion market value.  The news is out that Nelson Peltz has taken a 7.1% stake in the company via his Trian Fund and it is easy to see that Peltz is taking an activist investor stake here.  The stake is worth $900 million and the fund is joining with CalSTRS in an effort to control a 9.1% stake as far as voting is concerned.

The move joins Warren Buffett and Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) because the conglomerate owns a stake of 636,000 shares of its common stock.  That Berkshire stake is still way down from prior reports but was the same stake as of the end of 2011.

Peltz said in a SEC filing that shares are currently undervalued and the fund wants to communicate its view that things could be better if the company would look at various strategic alternatives including a restructuring of its key business segments.

Ingersoll-Rand is in the design, manufacturing, sales, and servicing of a diverse portfolio of industrial and commercial products in the United States and internationally.  Under the current Euro worries, it is worth noting that the company’s official headquarters is in Dublin, Ireland.

It is interesting that the reaction is so muted, but that may be because the DJIA is down another 100 points or so and with international markets on the skid again.  The reaction has Ingersoll-Rand shares up 1.4% at $42.83 against a 52-week range of $25.86 to $52.06.

JON C. OGG