Bill Ackman (Trades, Portfolio), founder of Pershing Square Capital Management, disclosed in a regulatory 13F filing that his firm’s top trades during the first quarter included a new position in both share classes of Alphabet Inc. (GOOGL, Financial)(GOOG, Financial) and boosts to its holdings of The Howard Hughes Corp. (HHC, Financial) and Canadian Pacific Kansas City Ltd. (CP, Financial). The firm also reduced its positions in Chipotle Mexican Grill Inc. (CMG, Financial), Hilton Worldwide Holdings Inc. (HLT, Financial) and Lowe’s Companies Inc. (LOW, Financial).
Pershing Square engages in activist investing: The firm enters positions in the common stock of public companies that are trading at a discount and pushes for changes so that the market can realize the values of the companies.
As of March, the firm’s $10.22 billion 13F equity portfolio contains eight stocks with a quarterly turnover ratio of 11%. The top four sectors in terms of weight are consumer cyclical, real estate, industrials and communication services, accounting for 65.57%, 12.52%, 11.48% and 10.43% of the equity portfolio.
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.
Alphabet
Pershing Square invested in 8,069,770 Class C shares of Alphabet (GOOG, Financial), giving the position 8.21% equity portfolio weight. The firm also invested in 2,185,000 Class A shares of Alphabet (GOOGL, Financial), giving the position 2.22% equity portfolio weight.
Class A shares of Alphabet averaged $95.94 during the first quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.85 as of Monday.
The Mountain View, California-based online search giant has a GF Score of 99 out of 100 based on a rank of 10 out of 10 for profitability and growth, a financial strength rank of 9 out of 10, a momentum rank of 8 out of 10 and a GF Value rank of 7 out of 10.
Alphabet’s high profitability rank is driven by several positive investing signs, which include a 4.5-star business predictability rank and an operating margin that has increased by approximately 2.40% per year on average over the past five years.
Howard Hughes
During the first quarter, the firm added 89,397 shares of The Howard Hughes Corp. (HHC, Financial), boosting the position by 0.56%. Despite this, the firm continued expanding its stake in the Texas-based real estate company during the past few months according to GuruFocus Real-Time Picks, a Premium feature based on Schedule 13D, 13G and Form 4 filings. The most recent trades included a purchase of 23,714 shares around May 11, a purchase of 65,908 shares around May 16 and a purchase of 61,370 shares around May 19.
As of the May 19 Form 4 filing, Pershing Square owns 16,245,791 shares of the company, approximately 32.5% of total shares outstanding. The position occupies 11.83% of the firm’s equity portfolio.
Shares of Howard Hughes traded around $74.94 on Monday, showing the stock is modestly undervalued based on its price-to-GF Value ratio of 0.74.
The real estate company has a GF Score of 77 out of 100 based on a GF Value rank of 9 out of 10, a momentum rank of 8 out of 10, a profitability rank of 6 out of 10, a growth rank of 5 out of 10 and a financial strength rank of 4 out of 10.
Canadian Pacific Kansas City
The firm added 1,000 shares of Canadian Pacific Kansas City (CP, Financial), increasing the position to 15,238,044 shares. The position occupies 11.48% of the firm’s equity portfolio.
Shares of Canadian Pacific Kansas City averaged $77.21 during the first quarter; the stock is modestly overvalued based on its price-to-GF Value ratio of 1.29 as of Monday.
The Calgary, Alberta-based railway company has a GF Score of 74 out of 100 based on a momentum rank of 10 out of 10, a profitability rank of 8 out of 10, a growth rank of 6 out of 10, a financial strength rank of 5 out of 10 and a GF Value rank of 1 out of 10.
Chipotle Mexican Grill
The firm sold 76,022 shares of Chipotle Mexican Grill (CMG, Financial), trimming 6.88% of the position and 1.20% of its equity portfolio.
Shares of Chipotle Mexican Grill averaged $1,571.10 during the first quarter; the stock is fairly valued based on its price-to-GF Value ratio of 1.07 as of Monday.
The Newport Beach, California-based restaurant chain, which is known for its burrito bowls, has a GF Score of 87 out of 100 based on a financial strength rank of 5 out of 10, a GF Value rank of 3 out of 10 and a rank of 9 out of 10 for profitability, growth and momentum.
Hilton Worldwide Holdings
The firm sold 732,539 shares of Hilton Worldwide Holdings (HLT, Financial), trimming 7.30% of the position and 1.05% of its equity portfolio.
Shares of Hilton averaged $140.82 during the first quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.84 as of Monday.
The McLean, Virginia-based hotel giant has a GF Score of 70 out of 100 based on a momentum rank of 10 out of 10, a financial strength rank of 4 out of 10, a growth rank of 1 out of 10 and a rank of 7 out of 10 for profitability and GF Value.
Lowe’s Companies
The firm sold 338,687 shares of Lowe’s Companies (LOW, Financial), trimming 3.26% of the position and 0.77% of its equity portfolio.
Shares averaged $203.15 during the first quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.90 as of Monday.
The Mooresville, North Carolina-based home furnishings retail company has a GF Score of 93 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a momentum rank of 8 out of 10, a GF Value rank of 6 out of 10 and a financial strength rank of 5 out of 10.
