Bill Ackman

Bill Ackman

Last Update: 12-13-2016

Number of Stocks: 10
Number of New Stocks: 1

Total Value: $5,413 Mil
Q/Q Turnover: 4%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Bill Ackman Watch

  • Chipotle Could Be a 4-Bagger in 10 Years

    Chipotle Mexican Grill (NYSE:CMG) has been among the most successful fast food chains in recent years by providing differentiated high quality food served quickly in a good environment.


    The company claims that it uses naturally grown ingredients and serves more naturally raised meat than any other restaurant chain. Customers liked it. The number of stores grew from over 500 locations in 2006 to about 2,200 locations. But the company suffered significantly starting in November 2015 when E. coli outbreaks were linked directly to its restaurants. Comparable sales were in the negative 20%-plus range in 2016. Earnings dropped to close to zero.

      


  • US Retailers May Look Valuable, but Watch the Trap

    After some poor holiday trading updates, investors have fled the U.S. retail sector in droves in the past few weeks extending the exodus from retail stocks that has been ongoing for around six months.


    For contrarian investors, this exodus has thrown up an interesting opportunity. Shares in retailers such as JCPenney Co. Inc. (NYSE:JCP), Kohl's Corp. (NYSE:KSS), Dillard’s Inc. (NYSE:DDS), Macy’s Inc. (NYSE:M), Sears Holdings Corp. (NASDAQ:SHLD) and Nordstrom Inc. (NYSE:JWN) have fallen to 52-week lows and are now trading at relatively appealing valuations.

      


  • 3 Rules for Successfully Investing Alongside Activists

    Investing alongside activist investors can be a tantalizing proposition. There are few outright bargains in the market now and a company that is trading cheaply with a definite catalyst in an activist investor gaining control can be very appealing. We have invested alongside activists several times over the years. We have had our successes and failures, so we want to share three rules we have developed over time that we believe increase the odds of an investment alongside an activist being a success.


    1. Try to buy at a similar price as the activist

      


  • 23 Questions With Value Investor Ari M. Eden

    1. How and why did you get started investing? What is your background?


    I was exposed to it a bit as a kid with some family members who were pretty big market followers, but I really didn't get into it for myself until finishing college and realizing I better learn to supplement income. After graduation I interned at a discount brokerage and then began learning all I could about the markets.

      


  • Technology Companies Among Strong Guru Ownership Stocks

    While all investment gurus seek long-term capital appreciation, not all gurus think identically. Some gurus invest in companies with a fundamental, value-oriented approach while other gurus, like Bill Ackman (Trades, Portfolio) and Carl Icahn (Trades, Portfolio), actively invest in distressed companies and generate value through company reforms. However, regardless of their investing approach, gurus usually invest in companies that offer high value potential to their fund and shareholders.


    In Part 1, we analyzed the Aggregated Portfolio of Gurus, which lists the 50 companies with the highest combined weighting among the gurus selected through the “Personalized List” feature.

      


  • Bill Ackman Reduces Valeant Stake to Benefit Clients

    As another tumultuous year has wiped out nearly 85% of Valeant Pharmaceuticals’ market value, Bill Ackman (Trades, Portfolio), one of its biggest investors, sold some shares to give his clients a year-end tax break.


    Ackman’s Pershing Square hedge fund initiated its Valeant (NYSE:VRX) position in early 2015 during the drugmaker’s heyday north of $177 per share, before its price went into freefall beginning in July that year. In the first quarter 2016, Ackman responded by purchasing 5 million additional shares, but Valeant’s further drop has resulted in a total estimated loss of 81% on the stake, a blow to returns at his fund.

      


  • Bill Ackman Comments on Herbalife

    On November 1, 2016, Herbalife (NYSE:HLF) reported its third quarter financial results. Modest financial performance in the quarter, disappointing 2017 guidance and the unexpected announcement of a CEO transition caused the stock to decline. HLF stock has traded down more than 33% since the announcement of the company’s settlement with the FTC on July 15th, 2016, a 15% year-to-date decline, as investors have come to increasingly ignore the company’s fraudulent characterization of the FTC settlement. At its December 2, 2016, price of $47.99 per share, HLF currently trades at approximately the price at which we shorted the shares in 2012.


    On a consolidated basis the company reported net sales of $1.1 billion for the quarter, up 1.7% year-over-year. Headline adjusted net income of $105 million for the quarter (down 3% YoY) translated into adjusted EPS of $1.21 (down 4% YoY). On a constant currency basis the company reported net sales growth of 5%, driven by EMEA (+15%), Mexico (+14%) and North America (+10%).

      


  • Bill Ackman Comments on Nomad

    Nomad (NYSE:NOMD) reported Q3 results in late November.


    Third quarter like-for-like sales declined 3.3%, which marked the fourth straight quarter of sequential improvement in like-for-like sales trends. This sequential improvement in trends is consistent with management’s guidance and driven by the company’s shift in its strategy to refocus its resources on its core product offerings.

      


  • Bill Ackman Comments on Platform Specialty Products Corp

    In September, Platform (NYSE:PAH) hosted an investor day where it provided a detailed explanation of the secular growth drivers and unique competitive positioning of each of its Performance and Agricultural Solutions businesses, along with long-term guidance of 4% annual organic revenue growth and high-single digit annual EBITDA growth.


    The company also announced that it had reached a revised agreement with Permira to settle its $600 million preferred stock liability related to the Arysta acquisition. Under the revised agreement, Platform has the option to pay Permira $450 million in cash and 5.5 million shares, which equates to $500 million at the current market prices and represents a savings of $100 million relative to the original agreement. To finance the cash portion of the agreement, the company raised $400 million of equity and, as a result, was able to refinance $2 billion of its debt, reducing the rate on this debt by 50 basis points and extending the maturities by three years to 2023.

      


  • Bill Ackman Comments on Valeant Pharmaceuticals International

    Since our last update in August, Valeant (NYSE:VRX) has bolstered its management ranks, improved dermatology average selling prices (ASPs), stabilized its salesforces, and experienced acceleration in Salix script trends. Despite these positive developments, financial results continue to be challenged as certain unexpected events impacted Valeant in Q3 and weakness in Valeant’s U.S. Diversified Products segment continues to weigh on near- to medium-term earnings.


    Valeant reported quarterly revenue of $2.48 billion, Adjusted EBITDA of $1.16 billion and Adjusted EPS of $1.55. This represented sequential improvement of 2%, 7% and 11%, respectively, as the business continues to stabilize following the disruption of recent quarters.

      


  • Bill Ackman Comments on Fannie Mae and Freddie Mac

    Fannie (FNMA) and Freddie (FMCC)’s underlying earnings continue to progress modestly in the core mortgage guarantee business, while the non-core investment portfolio continues to shrink to a smaller and appropriate level, resulting in a more profitable and lower-risk business model. The strength in underlying earnings growth reflects two factors: (1) an increase in guarantee fees as the fees on new mortgages exceed the average fees on the existing portfolio, and (2) lower credit losses as the portfolio’s credit quality has meaningfully improved since the financial crisis.


    There were a number of legal developments this quarter. In the Federal Court of Claims case, Judge Sweeney granted the plaintiffs access to 56 documents the government had claimed were privileged, many of which were contemporaneous with the period just prior to the Net Worth Sweep and involved high level government officials. The plaintiffs have not yet had access to the privileged documents as the government has appealed Judge Sweeney’s ruling. We find it interesting that the government is fighting so hard against this ruling, as it has previously complied with the judge’s prior motions to turn over documents.

      


  • Bill Ackman Comments on The Howard Hughes Corp

    Net Operating Income (NOI) from HHC (NYSE:HHC)’s operating assets (consolidated and owned) decreased sequentially from $35.2 million to $31.3 million (and year-over-year from $31.9 million), largely due to headwinds in Houston that continue to negatively impact HHC’s owned hotels in Houston ($3.5 million sequential decline in hospitality NOI). HHC held steady its projected stabilized annual NOI estimate (which excludes the South Street Seaport) of $215 million and kept constant its estimated stabilized hospitality NOI levels. Land sales in its Master Planned Community (MPC) segment decreased from $59 million to $32 million year-over-year in Q3 and sequentially from $34 million due primarily to a $27 million reduction in commercial sales from Q3 2015.


    In Hawaii, at its Ward Village property, construction of the Waiea, HHC’s first residential tower, is nearing completion. HHC has started collecting the proceeds from the sale of these units. HHC’s second tower (Anaha) recently topped out and is on schedule to be completed by mid-summer 2017. The company now has five condominium projects for sale, four of which are under construction (see status of each one below). HHC executed 35 new sales contracts since the end of Q2, representing 11% of the remaining inventory under construction (reducing the number of unsold units to 280 from a total inventory of 1400 units).

      


  • Bill Ackman Comments on Restaurant Brands International

    QSR (NYSE:QSR) reported strong results by executing on its three key growth drivers: same store sales, net unit growth, and operational efficiency. In the third quarter, the company generated 2% same store sales growth in its Burger King and Tim Hortons concepts. While same store sales growth has decelerated over the last few quarters, it is still at a healthy overall level. Strong international growth was partially offset by weaker U.S. performance at Burger King where same store sales declined 0.5%. The decline in the U.S. is partially due to a tough comparison with last year’s quarter’s 5% growth, but also reflects a more difficult industry environment as the recent decline in food costs has widened the price gap between restaurant and grocery to historically high levels, resulting in lower restaurant traffic.


    QSR achieved net unit growth of 3% which management expects will accelerate in the fourth quarter. In addition, Tim Hortons recently announced two master franchise agreements in the U.K. and the Philippines, which should accelerate future growth.

      


  • Bill Ackman Comments on Air Products

    Air Products’ (NYSE:APD) fiscal year fourth quarter earnings per share of $2.01 increased 10% over the prior year. This strong performance was driven by a 260 basis point increase in operating margins. This quarter marked the ninth straight quarter of double-digit EPS growth since Seifi Ghasemi joined Air Products as its CEO.


    Sales increased 1% as 3% underlying growth was offset by a 2% drag from foreign exchange rates and the pass-through of lower energy prices. The 3% underlying growth was driven by increased volumes as pricing remained flat. Growth capex contributed to volume growth in Asia, while global economic weakness led to weak volumes elsewhere around the globe.

      


  • Bill Ackman Comments on Mondelez

    On October 26, Mondelez (NASDAQ:MDLZ) reported third quarter 2016 results. Underlying organic growth was generally in-line with the company’s categories at nearly 2%, including volume growth of 1.3%. This was the third straight quarter of positive underlying volume growth and a sequential acceleration from the second quarter. We note that Mondelez is one of the few large cap packaged food companies that is demonstrating any underlying volume growth, however modest. While the global growth rate of Mondelez’s snacking categories has moderated over the course of the year primarily due to macroeconomic headwinds, we continue to believe that the long-term outlook for these categories remains robust, especially in the emerging markets where Mondelez has large market shares and robust routes to market.


    Operating profit margins expanded by 220 basis points to 15.8% in the quarter, driven primarily by a reduction in overhead costs as a percentage of sales reflecting the implementation of zero-based budgeting and the rollout of global shared services, as well as an increase in gross margin reflecting the company’s supply chain transformation. Year-to-date, the company continues to show progress with its significant cost savings opportunity and productivity initiatives, and remains on track to reach its 2018 margin target of 17% to 18% with further upside beyond 2018.

      


  • Bill Ackman Comments on Chipotle Mexican Grill

    On September 6th, we announced a 9.9% stake in Chipotle Mexican Grill (NYSE:CMG) which we purchased at an average price of $405 per share. Chipotle has built a superb brand pioneering the “fast casual” restaurant industry with the success of its outstanding product offering, unique culture and powerful economic model. We have followed the business for years, noting how it has disrupted the fast food industry with its high quality, delicious and customizable hot meals that are prepared quickly and sold at affordable prices. The company has been significantly negatively impacted by food safety issues beginning in the fourth quarter of 2015 which caused a peak decline in average unit sales of 36%. In response, the company has implemented best-in-class food safety protocols over the past year, and worked to win back lost customers. While traffic and sales have begun to recover, average unit volumes are still 19% below peak levels.


    We have always believed that a good time to buy a great business is when it is in temporary trouble. While Chipotle’s reputation has been bruised, we think that with the passage of time and improved marketing, technology and governance initiatives, the business will not only recover but become much stronger. Chipotle’s sales recovery will be neither smooth nor predictable over the next few quarters; yet, we believe that all of the key drivers of Chipotle’s powerful economic moat and long-term success remain intact. These drivers include:

      


  • Bill Ackman Comments on Zoetis

    On November 9th we sold our last shares of Zoetis (NYSE:ZTS), about two years after we publicly announced an 8.5% ownership stake. Despite the high quality nature of the business and its strong management team, we sold to redeploy the capital in certain new investments.


    We purchased our stake in Zoetis at an average cost of approximately $37 per share. Shortly thereafter, we met with the Zoetis management to learn more about the company and to discuss our views on potential initiatives to create shareholder value. On February 4, 2015, Zoetis agreed to add then-Pershing Square investment team member (and healthcare industry veteran) Bill Doyle and Actavis Executive Chairman Paul Bisaro to the board on April 13, 2015.

      


  • Bill Ackman Comments on Canadian Pacific Railway

    In our August 26, 2016 Investor letter we reported the sale of our remaining 9.8 million shares of CP (NYSE:CP) on August 4, 2016, approximately five years from the inception of the investment. During the course of our investment, CP’s share price increased nearly four times, its operating performance went from worst to nearly tied for first with Canadian National, and its credit rating improved from a weak Baa-/BBB- to a strong Baa+/BBB+. While critics often accuse activists of being short-term investors focused primarily on stock buybacks and dividends, CP is a paradigmatic example of the long-term sustainable business performance enhancements and shareholder value creation we have achieved in our core activist holdings.

    From Bill Ackman (Trades, Portfolio)'s Pershing Square third-quarter shareholder letter.   


  • Bill Ackman Releases Pershing Square 3rd-Quarter Letter

    Dear Shareholder:


    The performance of Pershing Square Holdings, Ltd. is set forth below1.

      


  • 22 Questions With Michael Nowacki

    1. How and why did you get started investing? What is your background?


    When I was 19 years old I was trying to figure out what profession I wanted to pursue. A job with a sense of contribution was important to me, but I also wanted there to be an unlimited ceiling. For example, becoming a police officer, teacher or nurse is very rewarding, but the opportunity to move up the leadership ladder in those professions is very limited. I came across a biography on John D. Rockefeller, who was also from Cleveland, and was blown away by his philanthropic achievements. I knew immediately I wanted to become a philanthropist, but you need a fortune to do that. I read everything about the people on the Forbes 400 and how history’s great fortunes were created. I realized that nearly all the self-made ultrawealthy were either business owners or investors. I studied both and fell in love with investing. In investing I get my sense of contribution by helping people achieve their financial and investment goals.

      


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