1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Holly LaFon
Holly LaFon
Articles (9183)  | Author's Website |

Ackman Buys Nike

Also acquires more Mondelez

February 15, 2018 | About:

Bill Ackman (Trades, Portfolio) reported Wednesday that he made only one new buy, Nike Inc., and increased his holding of Mondelez International Inc. (NASDAQ:MDLZ) in the fourth quarter.

The leader of the hedge fund Pershing Square acquired 5,836,020 Nike shares, which had a fourth-quarter average price of $57. The price has since gained 18% as of Wednesday evening.

The holding represents 6.2% of his portfolio, which makes it his smallest position, below Platform Specialty Products (NYSE:PAH). Ackman did not have to report the holding during the quarter because he purchased 0.36% of Nike’s shares, under the 5% of shares an investor must own to trigger a disclosure. As an activist investor, typically Ackman takes sizable stakes in large companies as leverage to push for change.

1012736661.png

The disclosure contributed to a 3.27% pop in Nike’s share price Wednesday, which closed the day at $67.96 per share, near a 10-year high.

Over the past five years, Nike has exhibited 10.4% annualized revenue growth, 12.3% EBITDA growth and 6.2% book value growth. Over the same period, its stock price rose 138%.

1165245445.png

The athletic company looks relatively pricey by its price-sales ratio, which hit 3.18, near a two-year high.

493027273.png

Ackman also increased his holding of Mondelez International, a snack food company, in the fourth quarter by 66.98%, purchasing 9,328,299 additional shares. To end the quarter, he had amassed 23,256,402 shares, raising the position to third from fourth place in his portfolio.

Ackman said of the company in a third-quarter letter: “We believe that Mondelez (NASDAQ:MDLZ) is currently substantially undervalued given its high business quality, long-term secular growth potential – especially in emerging markets – and substantial opportunity to improve profit margins. Today, Mondelez trades at 17 times our estimate for 2018 earnings per share, a discount to the S&P 500 market multiple, for a business whose attributes are substantially better than the average company in the S&P 500.”

1882459991.png

Mondelez has a $65.2 billion market cap. It has seen decline rates of 3.8% for revenue, 10.4% for free cash flow and 0.2% for book value in the past five years. EBITDA grew at a rate of 1.7% over the same period.

16947185.png

See Bill Ackman's portfolio here

About the author:

Holly LaFon
I'm a financial journalist with a master of science in journalism from Medill at Northwestern University.

Visit Holly LaFon's Website


Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:


Performances of the stocks mentioned by Holly LaFon


User Generated Screeners


cspunarHi ROA Lo Debt Div
pbarker46Owner earnings and FCF
DBrizanCDN2018dec11 10p
sunnywhy烟蒂
rmlkasuperROD 1
mjspencerpredictable but down 1m
dickslee2312-10-2018
johnbarberShort
wilhelmstone10yr div gainer
DBrizanall 2018dec09 1048p
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK