Bill Ackman (Trades, Portfolio), founder of Pershing Square Capital Management L.P., trimmed his position in The Howard Hughes Corp. (HHC, Financial) on Jan. 2, according to GuruFocus real-time picks.
Trade details
Dallas, Texas-based Howard Hughes announced Jan. 2 that Pershing Square Holdings Ltd. (LSE:PSH, Financial)(XAMS:PSH, Financial) and Pershing Square L.P., entered into an underwriting agreement under which Ackman and his partners agreed to sell 2.5 million Howard Hughes shares. Ackman sold the shares at $132.84 per share, resulting in a total transaction of approximately $332.10 million. As of Jan. 2, Pershing Square owns 2,204,534 shares of Howard Hughes, representing approximately 5.1% of the total shares outstanding.
Company overview
Howard Hughes develops master planned communities (MPCs) and other strategic real estate development communities across the U.S. The company’s profitability ranks 8 out of 10, driven by expanding operating margins and a three-year revenue growth rate that outperforms 84% of global competitors.
Although the company has strong profitability, Howard Hughes has a modest financial strength rank of 5. The company’s Altman Z-score of 1.33 suggests moderate financial distress. Additionally, Howard Hughes has a debt-to-EBITDA ratio of 10.77 and cash-to-debt ratio of 0.20.
Howard Hughes’ stock price dropped approximately $5 on Jan. 3, the day following Ackman’s transaction.
Disclosure: I do not have positions in the stocks mentioned.
