In a recent analysis, we published a detailed list of Jeff Smiths Top 10 Activist Targets and their performance in comparison to the S&P 500 index. This article delves deeper into where Pfizer Inc. (NYSE:PFE) stands relative to other companies featured on Smiths prestigious list.

Jeff Smith has earned the moniker of the most feared man in corporate America due to his relentless and highly effective activist campaigns on Wall Street. His experience is underscored by his involvement with over 17 companies' boards and leadership as chair for four of those, which solidifies his reputation as a powerhouse in unlocking shareholder value. Smith co-founded Starboard Value LP in 2011 with two partners, a hedge fund that has gained notoriety for targeting companies that are perceived to be undervalued. This extensive portfolio includes hundreds of companies and showcases the fund's strategy of conducting thorough analyses to identify stocks trading below their fair market value.

Starboard Value LPs approach to activism is aggressive yet calculated. The hedge fund routinely launches campaigns that advocate for strategic changes within the companies it invests in, often seeking board seats or demanding management changes to enhance shareholder value. Their tactics can include advocating for the sale of business units or, in some cases, the entire company, all in the pursuit of maximizing returns for investors. Over the last decade, Smith has strategically focused on IT giants and consumer cyclical stocks, resulting in a remarkable increase in the hedge funds assets under management, which now exceed $5.5 billion. The companies that have attracted Starboard Value LP boast an average market valuation of over $45 billion, a significant rise from about $7 billion in 2020.

Starboard Value LP has built a reputation for challenging executives and board members who resist its proposals for change, sometimes leading to drastic measures such as dismissals. However, the operational style of Jeff Smith stands in stark contrast to the more confrontational tactics employed by other prominent activist investors, such as Carl Icahn and Bill Ackman. For instance, during his tenure as chair of Darden, he and fellow board members took the unique approach of working shifts within the company to gain firsthand insights into operations. In a similar vein, he immersed himself in the pizza-making process at Papa Johns before launching an activist campaign aimed at unlocking value within that company.

Despite Starboard Value LPs established track record, the fund returned less than 5% for its investors in 2024, lagging behind its competitors. This underperformance came at a time of significant upheaval within corporate America, as activist investors made unprecedented moves to instigate change within boardrooms. Overall, activist funds achieved an average return of 11.5% during this period. Notably, ValueAct Capital Management, a rival of Starboard Value LP, reported a remarkable 21% increase, while Sachem Head Capital Management fared even better, delivering returns of approximately 22% as they capitalized on the booming artificial intelligence-driven market.