The hedge fund underperformed the market in Q1 as revealed in its recent 13F filing with the SEC. I take a closer look at Pershing Square's $4.8 billion portfolio and current stock holdings below.
Pershing Square's Largest Holdings
On May 15th, Bill Ackman's firm Pershing Square filed its quarterly Form 13F regulatory filing. I reviewed the filing to gain a glimpse into the firm's large portfolio.
Pershing Square's stock portfolio totals $4.8 billion according to the latest filing. The list value of stock holdings is down -17.7% when compared to the last quarter. As a benchmark, the S&P 500 was down 1.2% over the same period.
Quarter-over-Quarter Turnover (QoQ Turnover) measures the level of trading activity in a portfolio. Pershing Square's QoQ Turnover for the latest quarter was 23.0%, so the firm appears to trade a significant percent of its portfolio each quarter.
The Ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed below at the Pershing Square page. The following table summarizes the firm's largest holdings reported in the last filing:
| Ticker | Name | Holding ($mil) | % Of Portfolio |
|---|---|---|---|
| QSR | RESTAURANT BRANDS INTL INC | $1,384.3 | 28.6% |
| CMG | CHIPOTLE MEXICAN GRILL INC | $931.4 | 19.3% |
| ADP | AUTOMATIC DATA PROCESSING IN | $901.3 | 18.7% |
| MDLZ | MONDELEZ INTL INC | $674.2 | 14.0% |
| PAH | PLATFORM SPECIALTY PRODS COR | $389.5 | 8.1% |
| HHC | HOWARD HUGHES CORP | $306.7 | 6.3% |
| UTX | UNITED TECHNOLOGIES CORP | $244.6 | 5.1% |
The seven positions above represent 100.0% of the fund's total portfolio. Restaurant Brands International Inc (NYSE: QSR) is its largest holding with a long position in the company worth $1,384.3 million.
Chipotle Mexican Grill, Inc. (NYSE: CMG) is Bill Ackman's second largest position and represents 19.3% of his firm's total portfolio.
Automatic Data Processing (Nasdaq: ADP) is Pershing Square's third largest position and represents 18.7% of his firm's total portfolio.
Pershing Square's One Purchase In Q1
I also used finbox.io to find Pershing Square's stock purchases last quarter by comparing the last two filings:
| Ticker | Name | Purchased ($mil) | % Of Portfolio |
|---|---|---|---|
| UTX | UNITED TECHNOLOGIES CORP | $244.6 | 5.1% |
The only stock purchase for the quarter was United Technologies Corporation (NYSE: UTX). Pershing Square added a new position in the company worth $244.6 million and now represents 5.1% of the firm's portfolio.
Pershing Square's 5 Stock Sales
Here's the list of biggest position reductions determined by comparing the last two filings:
| Ticker | Name | Sold ($mil) | % Of Portfolio |
|---|---|---|---|
| NKE | NIKE INC | $365.0 | 6.2% |
| HHC | HOWARD HUGHES CORP | $347.8 | 6.3% |
| MDLZ | MONDELEZ INTL INC | $296.3 | 14.0% |
| QSR | RESTAURANT BRANDS INTL INC | $124.1 | 28.6% |
| ADP | AUTOMATIC DATA PROCESSING IN | $97.2 | 18.7% |
The largest stock sale for the quarter was Nike Inc (NYSE: NKE). Pershing Square sold its position in the company worth $365.0 million.
The next largest stock sale was Howard Hughes Corp (NYSE: HHC) followed by Mondelez International Inc (Nasdaq: MDLZ) and Restaurant Brands International Inc (NYSE: QSR).
Is It Worth Following Bill Ackman's Trading Activity?
Herbalife (NYSE: HLF). Valeant Pharmaceuticals (NYSE: VRX). Target (NYSE: TGT). These are just a few of the companies that activist investor Bill Ackman has muscled his way into, some of which have left him tattered and others have catapulted him to billionaire status.
When Ackman invests, he places billion-dollar bets on a handful of companies. This Indiana Jones approach has led to some bruising defeats, including a nearly $4 billion loss from a misplaced Valeant position. With rare humility, Ackman apologized to his investors for what he coughed up as a mistake.
One of Ackman’s most infamous bets was his multi-year $1 billion short position on weight loss and nutritional supplements play Herbalife, a position he abandoned amid the rise of the company’s stock despite Ackman’s cries of a pyramid scheme.
Although Ackman and Pershing Square have struggled recently, the hedge fund does have a track record of producing strong returns for investors. And most can agree that with thousands of stocks traded on U.S. exchanges, doing thorough research on each one is nearly impossible for smaller investors. Leveraging the resources of large hedge funds like Pershing Square can be a powerful way to narrow down a stock watch-list. Keeping tabs on Ackman's portfolio can certainly help with this.
Author: Andy Pai
Expertise: financial modeling, mergers & acquisitions
Andy is also a founder at finbox.io, where he's focused on building tools that make it faster and easier for investors to do investment research. Andy's background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights:
- Sears Holdings Corp.'s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores.
- Cerberus Capital Management's $3.3 bn acquisition of SUPERVALU Inc.'s New Albertsons, Inc. assets.
Andy can be reached at [email protected].
As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.
