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These guys put the 'activist' in activist investing

  • Canada Goose the latest target for PETA's investment activism.
  • PETA buys shares to put pressure on animal-abusing companies.
  • Activist strategy can get results, but not all companies are receptive.
Wearing coyote masks and business suits and waving signs against Canada Goose and their use of fur, PETA members gather outside the New York Stock Exchange on March 16, 2017 to protest as Canada Goose makes its initial public offering in New York.
Timothy A. Clary | AFP | Getty Images
Wearing coyote masks and business suits and waving signs against Canada Goose and their use of fur, PETA members gather outside the New York Stock Exchange on March 16, 2017 to protest as Canada Goose makes its initial public offering in New York.

When Canada Goose went public earlier this year, there were scores of investors ready to nestle the winter coat maker into their portfolios. One surprising IPO buyer was PETA, the animal-rights activist organization often thought of publishing graphic pictures of animals in distress and throwing paint on fur-clad pedestrians.

The public may not think of People for the Ethical Treatment of Animals as the Wall Street types, but the group has a sizable portfolio that includes dozens of companies.

They're not in it for the money: By purchasing shares, PETA earns the ability to appear at annual shareholder meetings and introduce shareholder resolutions to further their cause. Each stock is bought with a particular issue the groups wants to focus on, from a pharmaceutical company that tests its products on animals to lonely whales in an aquarium.

"Shareholder resolutions are an important tool in PETA's arsenal," said Executive Vice President Tracy Reiman. "One that gives us a seat at the table and allows us to submit shareholder resolutions, speak at annual meetings and more." The group claims a number of victories through its stock-buying strategy, including vegan-leather interiors available for Tesla cars.

PETA bought around $4,000 of Canada Goose when the company — which uses coyote fur for trim on it's coats — went public in March. For many of the companies, the group owns between $3,000 and $5,000 in common shares, likely to hedge against the stocks taking a dive and the group being ruled out of the shareholder resolution process.

Investment-wise, it wasn't a great move: If bought at the open price on Canada Goose's IPO, the shares have lost about $200 in value. Overall, a composite made up of select PETA-owned stocks tracks pretty closely with the market. Reiman said dividends are directed back to the campaign.

Shareholder rights

In order to submit shareholder resolutions, investors need to own at least $2,000 worth (or a 1 percent stake) of a company for more than a year before the shareholders' meeting, according to the Securities and Exchange Commission. The group introduced resolutions at two laboratory company annual meetings this year, according to research from Equilar, a board and executive data provider.

The group introduced a proposal to shareholders at LabCorp to track and report the Zika virus in primates housed at a number of company facilities. The company's board recommended that shareholders vote against the resolution, saying that none of the countries it imports primates from has active Zika transmission and the company complies with CDC procedures..

The group also introduced a resolution at the annual meeting of Charles River Laboratories International, whose stock they've owned since 2010. They want the company to prohibit business with entities that have violated the Animal Welfare Act. Charles River too disputed elements of the resolution and recommended that shareholders not support it. A representative for the company said about 2.5 percent of shareholders supported the resolution in a vote.

LabCorp did not respond with comments.

An index of select PETA-owned stocks has tracked the S&P 500 index closely over the years.

An investor doesn't need to hold a whole $2,000 stake to lobby a company and its other shareholders. A number of PETA's positions are single-stock holdings like Tesla, LVMH and Hermes, the group said.

"We bought limited stock in Hermes International to ask the company to join the responsible retailers that have already banned exotic skins," Reiman said. She cited Ann Inc., H&M and Nike as companies that had already taken that step.

PETA's not the only one: Other pro-animal groups have taken to buying up shares to support their activism. The Humane Society of the U.S., for example, owns enough stock in El Pollo Loco to introduce resolutions. At this year's annual meeting, they introduced a resolution to "disclose risks the company may face from animal welfare issues in its supply chain." The board recommended that shareholders vote "no."

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