After a bang-up year in 2021 for Bill Ackman (Trades, Portfolio)’s Pershing Square Capital, its performance in 2022 was hampered by rampant inflation, rising interest rates and other geopolitical factors.
The activist investor disclosed in a monthly report that his New York-based hedge fund posted a net loss of 8.8% for the year, with a 4.2% decrease in the month of December. The firm’s total assets under management sit at $15.33 billion.
The guru’s $9.46 billion equity portfolio, which consisted of six stocks as of Sept. 30, also contributed to this performance. A majority of the portfolio was invested in the consumer cyclical sector at 77.51%, while the industrials space represented 12.91% and real estate made up the remaining 9.58%.
As of the end of the third quarter, 13F filings show Ackman had positions in Lowe’s Companies Inc. (LOW, Financial), Chipotle Mexican Grill Inc. (CMG, Financial), Restaurant Brands International Inc. (QSR, Financial), Hilton Worldwide Holdings Inc. (HLT, Financial), Canadian Pacific Railway Ltd. (CP, Financial) and The Howard Hughes Corp. (HHC, Financial).
While a majority of these stocks saw negative performances for the year, a few did still beat the S&P 500 Index, which returned -19.44%.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Lowe’s Companies
Representing 24.74% of the equity portfolio, Lowe’s Companies (LOW, Financial) is Ackman’s largest holding. GuruFocus estimates he has gained 70.67% on the investment so far.
With a return of around -23%, the Mooresville, North Carolina-based company underperformed the S&P 500 Index last year.
The popular home improvement retailer has a $118.96 billion market cap; its shares were trading around $196.73 on Friday with a price-earnings ratio of 19.27 and a price-sales ratio of 1.33.
The GF Value Line suggests the stock is modestly undervalued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
Further, the GF Score of 97 out of 100 indicates the company has high outperformance potential, driven by strong ratings for profitability, growth, GF Value and momentum and middling marks for financial strength.
Of the gurus invested in Lowe’s, Ackman has the largest stake by far with 1.67% of its outstanding shares. Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Ken Fisher (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Elfun Trusts (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Ron Baron (Trades, Portfolio), Third Avenue Management (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Jeff Auxier (Trades, Portfolio) and several other gurus also have positions in the stock.
Chipotle Mexican Grill
Accounting for 21.08% of the equity portfolio, Chipotle Mexican Grill (CMG, Financial) is the investor’s second-largest holding. GuruFocus says Ackman has gained approximately 123.27% on the investment since the third quarter of 2016.
With a return of roughly -21.57% for the year, the fast-casual restaurant chain, which is headquartered in Newport Beach, California, slightly underperformed the index.
The company, which is known for its build-your-own burritos, bowls and salads, has a market cap of $38.17 billion; its shares were trading around $1,382.00 on Friday with a price-earnings ratio of 47.94, a price-book ratio of 16.42 and a price-sales ratio of 4.62.
According to the GF Value Line, the stock is modestly undervalued currently.
Having received strong ratings for all five criteria, the GF Score of 95 indicates the company has high outperformance potential.
With a 3.99% stake, Ackman is the company’s largest guru shareholder. Other gurus invested in Chipotle are Spiros Segalas (Trades, Portfolio), Ray Dalio (Trades, Portfolio)’s Bridgewater Associates, Simons’ firm and Greenblatt.
Restaurant Brands International
With a weight of 16.33%, Restaurant Brands International (QSR, Financial) is the third-largest position in Ackman’s equity portfolio. GuruFocus data shows he has gained approximately 55.78% on the long-held investment.
Posting a return of 6.30% for the year, the Canadian restaurant operator outperformed the benchmark.
The company, which owns the Tim Hortons, Burger King, Popeyes and Firehouse Subs brands, has a $20.09 billion market cap; its shares were trading around $65.42 on Friday with a price-earnings ratio of 21.10, a price-book ratio of 8.72 and a price-sales ratio of 4.91.
Based on the GF Value Line, the stock, while undervalued, appears to be a possible value trap currently. As such, potential investors should do thorough research before making a decision.
The GF Score of 79, however, indicates the company is likely to have average performance going forward. While it raked in high ratings for profitability and GF Value, ranks for growth and momentum were more moderate. Its financial strength was low.
Ackman has the largest stake in the company with 7.91% of its outstanding shares. David Herro (Trades, Portfolio), Steven Cohen (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Dalio’s firm, Simons’ firm, Prem Watsa (Trades, Portfolio), Greenblatt and Lee Ainslie (Trades, Portfolio) also own Restaurant Brands.
Hilton Worldwide
Occupying 15.36% space in the equity portfolio, Hilton Worldwide Holdings (HLT, Financial) is the guru’s fourth-largest stake. GuruFocus data shows Ackman has gained an estimated 64.58% on the investment since establishing it in the fourth quarter of 2018.
Returning -19.85%, the stock underperformed the benchmark index in 2021 by a very slim margin.
The McLean, Virginia-based company, which operates several well-known hotel chains and resorts, has a market cap of $35 billion; its shares were trading around $129.42 on Friday with a price-earnings ratio of 33.61 and a price-sales ratio of 4.36.
The GF Value Line suggests the stock is modestly overvalued currently.
The GF Score of 66, however, indicates it has poor future performance potential on the back of low ratings for growth and GF Value as well as a moderate financial strength rank. Momentum and profitability fared much better.
Of the gurus invested in Hilton, Ackman has the largest stake with 3.71% of its outstanding shares. The stock is also being held by Bill Nygren (Trades, Portfolio), Cohen, Primecap, Simons’ firm, Jeremy Grantham (Trades, Portfolio), Jerome Dodson (Trades, Portfolio), Greenblatt, Paul Tudor Jones (Trades, Portfolio) and Dalio’s firm.
Canadian Pacific
Coming in at number five, Canadian Pacific (CP, Financial) represents 12.91% of the guru’s equity portfolio. GuruFocus says Ackman has gained an estimated 81.26% on the investment over its short lifetime.
With a return of 4.09% for 2022, the Canadian railroad company outperformed the S&P 500.
The company, which now has a rail network that spans Canada, the U.S. and Mexico following the 2021 acquisition of Kansas City Southern, has a $71.48 billion market cap; its shares were trading around $76.45 on Friday with a price-earnings ratio of 31.39, a price-book ratio of 2.55 and a price-sales ratio of 10.78.
According to the GF Value Line, the stock is significantly overvalued currently.
The GF Score of 81 indicates the company has good outperformance potential. While Canadian Pacific received high ratings for growth, profitability and momentum, financial strength was more moderate and the GF Value rank was low.
With 1.64% of its outstanding shares, Ackman is the company’s largest guru shareholder. Other top guru investors of Canadian Pacific include Baillie Gifford (Trades, Portfolio), Cohen, Fisher, Simons’ firm, Dalio’s firm, Watsa and First Eagle Investment (Trades, Portfolio).
Howard Hughes
Rounding out the investor’s portfolio is Howard Hughes (HHC, Financial), which accounts for 9.58% of the equity portfolio. Ackman has lost an estimated 9.69% on the investment so far according to GuruFocus data.
Returning -25.17% for the year, The Woodlands, Texas-based real estate development company underperformed the S&P 500.
The company has a $3.83 billion market cap; its shares were trading around $76.89 on Friday with a price-earnings ratio of 16.21, a price-book ratio of 1.10 and a price-sales ratio of 2.
Based on the GF Value Line, the stock, while undervalued, appears to be a possible value trap, so potential investors should do thorough research before making a decision.
The GF Score of 72 indicates the company is likely to have average performance going forward. While it received high ratings for GF Value and momentum, its profitability, growth and financial strength ranks were more moderate.
Ackman is by far Howard Hughes’ largest guru shareholder with 31.85% of its outstanding shares. Baillie Gifford (Trades, Portfolio), Barrow, Hanley, Mewhinney & Strauss, Murray Stahl (Trades, Portfolio), Donald Smith & Co., Ken Heebner (Trades, Portfolio), Jones and several other gurus also have positions in the stock.
