Bill Ackman

Bill Ackman

Last Update: 09-13-2016

Number of Stocks: 9
Number of New Stocks: 0

Total Value: $7,513 Mil
Q/Q Turnover: 0%

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

Bill Ackman Watch

  • Warren Buffett Wants You to Read These 3 Letters

    Pivoting away from a scandal involving one of his biggest holdings, Wells Fargo (NYSE:WFC), Warren Buffett (Trades, Portfolio) took some time to discuss a philanthropic initiative he created with Bill and Melinda Gates called The Giving Pledge.


    The pledge calls for the world's billionaires to donate a large majority of their wealth to charities.

      


  • Risk/Reward With Herbalife

    Herbalife (NYSE:HLF) is a global nutrition company.


    It develops and sells meal replacement products across weight management, healthy meals and snacks, sports and fitness, energy and personal care products. It has over 5,000 SKUs globally sold through a network of director marketing representatives.

      


  • Two Key Checklist Items

    I am not a big fan of going through specific “checklist” items one by one when evaluating an investment idea. I know this idea has gained enormous popularity in recent years, partly due to the good book The Checklist Manifesto, and partly popularized in value investing circles by Mohnish Pabrai (Trades, Portfolio).

    I respect Mohnish a lot, and I think his idea of evaluating previous investment mistakes (both his own mistakes and especially the mistakes of other great investors) is an excellent exercise.  


  • The Other Top Investors Who Love & Hate Bill Ackman's Next Target, Chipotle

    Bill Ackman (Trades, Portfolio) purchased a 9.9% stake in Chipotle (NYSE:CMG) last week with intent to push for changes. While the investing world has largely bemoaned his involvement after a string of misadventures with stocks such as Valeant Pharmaceuticals (NYSE:VRX), some other managers of big funds hopped in and out of the Chipotle boat last quarter after its widespread food poisoning scare.


    A purveyor of “responsibly raised” and fresh ingredients, Mexican food chain Chipotle was home to food-borne illness causing pathogens norovirus, salmonella and E. coli in 13 states from August through December of 2015, according to its information website festooned with bacteria shapes. Over those five months, the stock fell by 33% and to date has declined 42%.

      


  • 2 Things Ackman Wants to Change at Chipotle

    Chipotle (NYSE:CMG) jumped on the news Bill Ackman (Trades, Portfolio)’s Pershing Square acquired a 9.9% stake. Given the star fund manager has had 1 ¾ of terrible years in the rearview mirror, that may have come as a bit of a surprise. Ackman’s struggles with Valeant (NYSE:VRX) and Herbalife (NYSE:HLF) notwithstanding, his track record in the restaurant business is to be envied. He racked up wins with Macy’s, McDonald’s, Burger King, Yum Brands and others. Pershing stated in its 13-D filing Chipotle has a strong brand, differentiated offering, enormous growth opportunity and visionary leadership. In addition, the 13-D called Chipotle an undervalued and attractive investment.


    But what’s Ackman’s plan with Chipotle? Why’s he engaging with this chain? His successes came through operational improvements, lots of cost cutting and financial engineering.

      


  • Bill Ackman Buys Chipotle Mexican Grill

    Bill Ackman (Trades, Portfolio) of Pershing Square Capital Management acquired a new holding in Chipotle Mexican Grill Inc. (NYSE:CMG) on Aug. 24.


    Ackman is an activist investor who has been plagued recently by both a scandal surrounding Valeant Pharmaceuticals (NYSE:VRX) and a failed attempt at shorting Herbalife (NYSE:HLF). This is his first major investment since the Valeant scandal unfolded. As an activist investor, Ackman takes a position in a company and pressures management for change. He has indicated that he may take an activist role in regard to Chipotle’s corporate governance, operations and capitalization.

      


  • Chou RRSP Fund Buys Valeant

    The Chou RRSP Fund (Trades, Portfolio) acquired a new holding in Valeant Pharmaceuticals International Inc. (TSX:VRX)(NYSE:VRX) in the second quarter.


    The fund purchased 260,000 shares in Valeant for an average price of 36.51 Canadian dollars ($27.83) per share. The transaction had an impact of 14.1% on the portfolio.

      


  • Bill Ackman Comments on Canadian Pacific

    On August 4, 2016 we sold our remaining 9 8 million shares of Canadian Pacific (NYSE:CP). This sale marked the end of our five-year investment in CP, which was a noteworthy success. I have agreed to continue on the board up until the next annual meeting or until qualified replacement directors have joined the board.


    We initiated our investment in Canadian Pacific in the fall of 2011. Prior to our investment, CP had meaningfully underperformed its closest competitor, Canadian National ("CN"), and the other North American railroads in nearly all key operating measures for more than a decade, a performance deficit best illustrated by CP's operating margin of 19%, or about half of CN's 37% margins at the time. As a result of this underperformance, CP' s shares had languished behind competitors and its potential for many years.

      


  • Bill Ackman Comments on Zoetis Inc.

    There is still a lot more work to do, but we are pleased with the company's progress over the last several months. Zoetis Inc. (NYSE:ZTS) Zoetis delivered another exceptional quarter of performance. Organic revenue growth was +4%, driven by +13% growth in Zoetis' companion animal segment. Excluding the revenue impact of the company's operational efficiency initiatives, organic revenue growth was 9%. Management's execution of its operational efficiency initiative continues to be excellent. SG&A as a percentage of sales fell by 180bps in the quarter, year-over-year and gross margins expanded 240bps. While we have sold a substantial portion of our investment to raise capital for new investments, we continue to believe that Zoetis' history of strong organic growth and margin expansion will continue.

    From Bill Ackman (Trades, Portfolio)'s mid-year 2016 letter.   


  • Bill Ackman Comments on Valeant

    At the time of our last financial report in March, Steve Fraidin and I had just joined the board of Valeant (NYSE:VRX) in an attempt to stabilize and enhance our investment in the company. Since we joined the board, the company has hired Joe Papa, an extremely capable and talented CEO, the substantial majority of the board has been replaced, the company has returned to filing its fmancial reports in a timely fashion, its bank debt has been successfully modified to substantially reduce the risk of covenant default, a highly credible and experienced CFO, Paul Herendeen, and General Counsel, Christina Ackermann, have joined the company, a new strategy and new fmancial reporting structure have been announced, and approximately $8 billion of assets are being evaluated for potential disposition.


    As a result of the above developments, we believe that Valeant has been successfully stabilized and is on the path to recovery. While we still expect the occasional negative press article about the company due to the ongoing government investigations and civil litigation, continued business progress should begin to focus investors and the public's attention on the company's high quality brands and products and its mission to improve patients' lives. With improved business performance, cash generation and leverage reduction, we expect Valeant's stock price to increase substantially from current levels.

      


  • Bill Ackman Comments on Restaurant Brands

    Restaurant Brands (NYSE:QSR) reported another strong quarter of underlying earnings in the second quarter of 2016. The company continued to deliver strong net unit growth at both concepts while substantially improving Tim Hortons' cost structure. Same-store-sales growth decelerated from prior quarters against a backdrop of slowing growth for the U.S. fast-food industry.


    Same-store-sales for the quarter grew nearly 1% at Burger King and 3% at Tim Hortons. Same-store-sales for Burger King's U.S. business declined 1% in the second quarter, due in part to the industry slowdown and a tough comparison against nearly 8% growth in last year's second quarter. Over time, we expect Burger King's U.S. same-store sales to increase at a healthy rate as the company narrows the sales gap with its key U.S. competitors. Net units grew 4% and the development pipeline remains strong. As a result of same-store-sales and net unit growth, Restaurant Brands' organic revenue grew 4%.

      


  • Bill Ackman Comments on Platform Specialty Products

    Platform (NYSE:PAH)'s earnings declined in the second quarter as positive results in Performance Solutions, increased cost synergies, and strong growth in the International Ag Solutions were offset by a significant decline in the North American Ag Solutions business and increased corporate costs.


    Platform's organic revenue increased 1% as Ag Solutions grew 5% and Performance Solutions revenue declined 2%. Ag Solutions achieved double-digit growth outside of North America (more than 80% of segment revenue), which was offset by a more than 40% decline in North America. The decline in North America resulted from the continued reduction in distributor channel inventories, decreased demand for pesticides due to lower pest pressures, and lower market share. The company stated that it has made changes to its sales force and product development initiatives and expects these efforts to improve business results over time. Performance Solutions' organic revenue declined primarily due to weakness in the electronics market in Asia, which the company noted should return to growth in the second half of the year.

      


  • Bill Ackman Comments on Nomad

    Nomad (NYSE:NOMD), the packaged frozen food company, announced second quarter results on August 25, 2016. Revenue for the quarter declined 3.8% on a like-for-like basis, excluding foreign currency changes. This marked the third straight quarter of sequential improvement in revenue trends. Margins and cash flow remained strong. The company reiterated its guidance for continued sequential revenue improvement throughout the year and €200 million of cash flow.


    Nomad stock trades at —9 times management's cash flow guidance per share, less than half the price of other packaged food businesses. We believe the company is taking the right actions to stabilize and enhance the business while integrating its recent Findus acquisition and working to deliver anticipated synergies.

      


  • Bill Ackman Comments on Mondelez

    On June 30, 2016, press reports, which were later confirmed, stated that Mondelez (NASDAQ:MDLZ) had made an offer to acquire The Hershey Company for $107 per share in a half-cash, half-stock transaction. While an acquisition of Hershey would certainly strengthen Mondelez's confectionery presence in North America, whether or not a deal creates value for shareholders depends on the price paid, the acquisition currency used and, as importantly, the potential for significant cost savings at Hershey.


    We believe that Mondelez shares are currently undervalued, and that the issuance of Mondelez stock at current prices to fund the acquisition of Hershey would likely be costly for Mondelez shareholders. More importantly, if Mondelez were to acquire Hershey or any other company, management must continue to be accountable for its own target of 17% to 18% operating profit margins by 2018 at the existing Mondelez business, excluding the impact or benefit of any acquisitions. We expect that shareholders would fmd it unacceptable for an acquisition of Hershey by Mondelez to delay or derail the productivity and cost savings transformation currently underway at the company.

      


  • Bill Ackman Comments on Howard Hughes Corp

    HHC's second quarter report highlighted the continued progress it is making across all of its initiatives and business segments.


    Net operating income ("NOT") from HHC (NYSE:HHC)'s operating assets increased from $28.5 million to $36 3 million year-over-year as recently developed properties continue to stabilize. HHC held steady its projected annual stabilized NOT estimate (excluding the South Street Seaport) of $215 million after increasing it from $203 million at year-end. Land sales closed in its Master Planned Communities ("MPC") segment decreased from $47 million to $34 million year-over-year in Q2 due to weakness at Woodlands in Houston and timing of superpad sales. The housing market in Summerlin remains strong as demonstrated by $48 million in land sales at The Summit, which is HHC's luxury golf course joint venture development within Summerlin. The Woodlands, which develops and sells lots at the upper end of the Houston residential market continues to experience a slowdown in housing activity. HHC saw increased activity, land sale closings and absorption rates at Bridgeland due to stronger demand for more affordable lots in Houston.

      


  • Bill Ackman Comments on Herbalife

    We have made substantial progress with our short position in Herbalife (NYSE:HLF). On July 15, 2016, after a more than two-year investigation, the FTC found that Herbalife has been operating illegally, misleading consumers about the potential profitability of its so-called business opportunity, among other extremely critical findings. The FTC's settlement with Herbalife avoided using the words "pyramid scheme" to describe its business, but found that the company had all of the hallmarks of other pyramid schemes it has prosecuted recently. The FTC's findings confirm each of our principal allegations against the company.


    The FTC stated that it chose to settle with Herbalife to avoid an extended period of litigation and to bring relief to consumers more rapidly. While Herbalife has to-date successfully spun the terms of the settlement as a victory for the company, the facts speak differently as the market appears to have recently begun to understand. While Herbalife stock rose more than 20% on the initial announcement of the settlement, it has declined since that time, and is now trading at approximately the same price as before the announcement.

      


  • Bill Ackman Comments on Fannie Mae and Freddie Mac

    Fannie (FNMA) and Freddie (FMCC)'s underlying earnings progressed modestly in the second quarter as their core mortgage guarantee businesses improved due to an increase in the guarantee-fee rate and lower credit costs. Their non-core investment portfolios continued to be reduced, which is leading them to a safer and more capital-light business model. As in recent quarters, reported earnings remained volatile due to non-cash-accounting-based derivative losses in the non-core investment portfolio. As a result of the derivative losses and the continued Net Worth Sweep, the companies remain at risk of being required to draw capital from the Treasury, as a result of the requirement to pay dividends to Treasury under the Net Worth Sweep of more than $125 billion in excess of the original 10% dividend agreement. As the risk of capital draws from the Treasury increases, we believe that Congress will become increasingly focused on seeking a permanent resolution for Fannie and Freddie.


    In the litigation, the government recently released additional documents which further support shareholder claims From the documents, it is clear that high-level government officials were aware that the GSEs were expecting to become highly profitable just prior to the implementation of the Net Worth Sweep, which runs contrary to the government's contemporaneous public statements that the GSEs were in a "death spiral." In fact, private emails of key government officials show that the government intended to implement the Net Worth Sweep as a measure to prevent the GSEs from recapitalizing themselves and exiting conservatorship. Both of these points directly contradict key claims the government made on and after implementing the Net Worth Sweep and as a defense to the litigation. In addition, the courts rejected the government's request to have individual lawsuits consolidated as a multi-district litigation and sent to Judge Lamberth. This allows each case to continue to proceed separately and be evaluated on its individual merits, which improves the likelihood of a favorable legal outcome for shareholders.

      


  • Bill Ackman Comments on Air Products and Chemicals

    Air Products' (NYSE:APD) recent quarterly results marked the eighth straight quarter of double-digit EPS growth as APD continues its impressive transformation under CEO Seifi Ghasemi and his team.


    APD's fiscal year third quarter earnings per share of $1.92 were up 16% while currency-adjusted EPS growth was 19%. These impressive results were driven by currency-adjusted sales growth of 4% and operating margins which were up 340 basis points (bps) to 23.0%. Sales growth was driven by 4% volume growth, largely due to volume contributions from growth investments, and flat pricing. Margins increased across each major operating segment, including each region for industrial gases as well as the non-core Versum materials technology business. We believe this broad-based operating improvement is a testament to the cultural impact Seifi has had on APD along with the benefits of the company's decentralized operating model which has empowered local operating executives to drive performance and unlock the company's latent potential.

      


  • Bill Ackman Discusses Worst Year Ever in Mid-Year Letter

    Dear Pershing Square Holdings, Ltd. Shareholder,


    Below we provide PSH's performance since its inception. The period of the last twelve months has been the worst period of performance by a wide margin since the inception of the strategy on January 1, 2004. Performance has improved substantially in the last few weeks with significant progress at Valeant and increases in the value of other holdings bringing year-to-date performance through August 23, 2016 to -15.5%.

      


  • Bill Ackman: Valeant 'One Very Big Mistake'

    Bill Ackman (Trades, Portfolio), whose Pershing Square hedge fund lost money on Valeant (NYSE:VRX)'s collapsing share price, said on CNBC it was a unique investment in their history. Usually they would have more active involvement in their companies or buy simple, undervalued companies.

      


  • Insuring a Value Stock Against Downside Losses, at No Cost

    This article offers at a different approach to improving the risk and reward profile of a value stock.


    In previous articles, I’ve written about protective puts (sometimes called married puts) that you can use like an insurance policy. If the price of your stock goes down, your loss exposure is eliminated or reduced. I’ve also written about earning extra income from a stock, preferably one that’s growing slowly, by selling covered calls.

      


  • Bill Ackman: Carl Icahn Propping Up Herbalife

    Bill Ackman (Trades, Portfolio) said he thinks when Carl Icahn (Trades, Portfolio), a big holder of Herbalife (NYSE:HLF), sells his stake, the "confidence factor" in the company will evaporate. "If he can sell this thing at 60 bucks and almost double his money, great for Carl. And he doesn't have to worry about what happenes to the company when they're required to completely change their business model," Ackman said. "I think he knows this thing is toast."

    Ackman has had a large short position in Herbalife since 2012. The stock has gained 12% year to date in spite of a Federal Trade Commission ruling in July that it is not, as Ackman declared, a Ponzi scheme.   


  • Herbalife: The Big Short Part 2

    The recent Hollywood financial blockbuster “The Big Short” may have a sequel on its hands.


    All the elements are there: the stubborn fund manager in Bill Ackman (Trades, Portfolio) who will not pull out of the short position no matter what, the irate clients trying to get out while they still have their shirts and the revelation of wrongdoing thrown in the face of the market with little to no reaction.

      


  • Francis Chou Adds to 2 Positions in 2nd Quarter

    During the second quarter, Francis Chou (Trades, Portfolio) of Chou Associates Management added 48.11% and 38.77% to its positions in Valeant Pharmaceuticals International Inc. (NYSE:VRX) and Sears Holdings Corp. (NASDAQ:SHLD). As the stock prices continue to decline, the companies offer investing opportunities. The above transactions align with Chou’s strategy of investing in companies with depressed prices.


    Established in 1986, the Chou Associates Fund seeks long-term capital growth by investing in undervalued U.S. and Canadian securities. As mentioned in its recent prospectus, the fund analyzes the company’s balance sheet and common financial metrics: profitability, growth potential and intrinsic value. While the manager has a limited number of positions, Chou reduces the portfolio risk by investing in companies with high margins of safety.

      


  • Valeant Misses 2nd Quarter Estimates

    Valeant Pharmaceuticals (NYSE:VRX) reported its second quarter earnings on Aug. 9. The second quarter earnings report was also the second report for new CEO Joseph Papa, who took over the company in May.


    A leading holding for many hedge funds, Valeant experienced a number of legal issues regarding its drug pricing strategies at the end of 2015 that eventually led to the company’s new executive management. Under the new management, the company is continuing to struggle. Since Papa took over, the stock is down 20% and for the year the stock is down 75%. Currently, the stock is selling for about $27.

      


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