Bill Ackman: Deep Look ay My Portfolio ($8.82 Billion)

we've owned uh some remarkable businesses uh our strategy is to buy what we call simple predictable free cash flow generative businesses we call super durable growth companies and these kite with strong balance sheets and if you own super durable growth companies with strong balance sheets and you buy them at the right price uh regardless of the economic environment you can do very very well the companies that we've owned uh you know starbucks uh even businesses like hilton lowe's agilent um you know the chipotle uh restaurant brands these companies uh can survive the great flood and and they were prepared for and in fact we think our long-term beneficiaries if i have to say of the pandemic top hedge fund managers generate profits with the rapidity of sonic the hedgehog speed however their mouths don't move as fast as their money it often seems the secretive world of hedge fund holdings requires a password far more complicated than open sesame to get an open look at the rationale of top portfolios pershing square capital founder and ceo bill ackman breaks the mute mould openly sharing his insights and publishing research findings one of the frequently expressed staples of akman's successful strategy is maintaining a lean portfolio in fact pershing square only holds shares in seven companies let's jump right into these companies right after i remind you guys to invest in that like button by scrolling down and smashing it also be sure to get your four free stocks worth up to four hundred dollars by clicking the link in the description and signing up for weeble spotlighting the sparse holdings low spear heads to portfolio with 23.33 of pershing squares holdings persian square first owned lowe's stock shares in quarter 2 2018. selecting this stock to lead the prestigious profitable pack aligns with akman's mentor warren buffett's fundamental rule of understanding how businesses you are invested in make money in the case of lowe's the company sells home improvement plants and gardening and design products to homeowners home improvement minded people as well as independent contractors installation services are offered as well lowe's always finds itself with an influx of demand but certainly aligns itself well in covert times when people are either stuck in their own house or buying someone else's page per property views on real estate platforms like realtor and zillow are up over 50 percent in 2020 almost uniformly inventory in america's 100 top metro markets have been shrinking since march along with days on market and the gap between list to sale price these developments bode well for lows as more people look to stay indoors during covert's most lethal time likely take more precautions moving forward and turn to the homemaking hallmark for managing new housing projects moving forward even before covert 19 altered our timeline with the ruthless rapidity of a marvel villain a 2019 study by la times revealed that americans spend about 340 billion dollars each year on home improvement projects a figure that even then was projected to grow through at least 2021. transitioning from stocking shelves with welcome plants to welcome news of growth for the stock low sales skyrocketed 30.1 percent in quarter three up from the anticipated 22.8 percent as consumers increasingly fork over money lowe's defends one of the strongest reputations for paying investors through dividends in fact the classic company has declared a cash dividend every quarter since going public in october 1961. since 2014 lowe's has raised its quarterly dividend payout per share from 18 cents to 60 cents ackman's second biggest holding advances from setting up tables to putting food on it restaurant brands international rbi comprises 17.70 of pershing's portfolio pershing has first owned the stock in quarter 4 2014. rbi lives up to the monaco of the crown or rather crowned duel of its ass enlargening assets led by burger king rbi makes approximately 31 billion dollars in annual system-wide sales and owns 27 000 restaurants in more than 100 countries and u.s territories according to its website the eye-popping numbers are also possible through ownership of popeyes and tim hortons seeing ackman heavily investing in tim horton's owner surprises nobody who has followed ackman's storied career beyond the sweet donuts ackman tasted sweet financial victory biting into tim hortons in the past as explained in our video about how ackman amassed his fortune the struggles of wendy's dominating the attention span of the market translated to the value of wendy's shareholder inc being undervalued ackman felt that netting the value of tim hortons and its potential growth prospects in the face of a far better business model and practices led to paying negative for wendy's as such he successfully convinced wendy's to spin off tim hortons by 2006. ackman subsequently sold pershing square's steak at a mammoth profit liquidable lightning could strike twice rbi's stock price has grown steadily from 33.58 per share in january 2016 to 60.50 as of december 6th peaking at 78.45 in august 2019 shortly before covid changed the investing game and the entire world despite the restaurant slash fast food industries profitability being swallowed by covid the stock has seen slow but steady recovery in recent months and likely stands to roar back in 2021 if all goes well with vaccines as ackman has publicly predicted on cnbc if delicious discussion inches you to the verge of salivation pause the video and appropriately grab chipotle first owned in quarter 3 2016 the stock also comprises 16.37 of pershing's portfolio chipotle's revenue stream is crystal clear as is ackman's enduring affinity for chipotle's alluring prospect as an investor and self-admitted frequent consumer chipotle is a great example of core philosophy behind most of pershing square's investments instead of investing when chipotle is doing extremely well in the stock ackman waited for an otherwise great company with a great brand to make a mistake and for people to lose confidence in the company the management and the board that's when he can be most effective chipotle is a simple predictable free cash flow generative business and it's an unlevered company with a strong balance sheet they own all their own stores everyone likes the food everyone thinks it's healthy and they have a sustainable moat around their business no matter how tasty things appear it's never a healthy idea for your bottom or bottom line to overindulge food ackman heeds that hard learn lesson filling 14.39 of pershing's portfolio plate with agilent technologies the information technology company is the latest addition with persian square first owning shares in quarter 3 2019 this company's way of generating cash flow is far more complex than the three aforementioned companies in pershing square's holdings in short agilent manufactures laboratory instruments and equipment agilent optimizes lab processes assists scientists with efficiency by providing innovative technologies and sells consulting services and onboard technologies to help further advance problem-solving companies and troubleshooting the high-tech company serves as a high amount of industries including the pharmaceutical food chemical energy environmental forensics diagnostics and research industries is the company as viable as it is versatile expert opinions differ objectively the company has a 35.24 billion dollar market cap increasing from around 25 billion dollars when ackman considerably increased its holdings in the company during quarter one stock price trends in the same direction at december 4th closing agilent's stock priced at 115.15 as opposed to hovering from prices per share in the late 70s to 90 during may the month he released his quarter one portfolio unveiling the increased investment whether agilent keeps growing or stagnates ackman's affluent ability to check into hilton hotels for almost eternity remains hilton worldwide holdings accounts for 12.92 of pershing square's holdings ackman dove into the luxuriously sparkling waters of hilton shares in quarter 4 2018. last year justified the currently volatile investment hilton experienced a healthy 2019 increasing earnings by 14 like most horror movies 2020 proves to be a deplorable sequel ravaging the industry with sharp declines in occupancy caused largely by travel restrictions and stay stay-at-home orders and the widespread decline in vacationing however as the covert management efficiency improves and time advances recovery in occupancy and hotel revenues has been occurring both in the united states and china obviously occupancy and revenue should continue to increase as macro economics progress in recovery and the job market rejuvenates allowing for more expendable money to circulate in fact ackman expresses optimism that hilton could leverage newfound strength in the aftermath of the new normal in the pershing square august 2020 semi-annual shareholder letter written by ackman he believes off-site gatherings could be the new avenue taken on the road to building corporate camaraderie hilton's visibility and prestigious status may gain prioritized preference especially for upscale companies hilton may gain that welcome distinction without losing to the forced prevalence of zoom while video conference has been an effective tool during the crisis he believes that in-person presentations and meetings will remain more effective than zoom when a company loses a piece of business to its competitors in-person sales pitch it won't be long for the sales manager to require all future pitches to be in person reverting attention to the present doesn't cease ackman's praise he lords management's ability to mitigate doom through optimizing cost structures and skillfully navigating the balance sheet he believes that hilton is well positioned to succeed because it has the best management team in the industry a portfolio of great brands a dominant market position a capitalized economic model a deep development pipeline and a strong balance sheet ackman also sees star potential and big bucks in starbucks electing to make it stock point six two percent of pershing square's portfolio and perhaps ninety six point two percent of your diet and also first owning shares in quarter for 2018. the coffee champion has lived up to both parts of his name lately surging to all-time company highs price per share maxed out at 102.94 at one point on december 4th customers brand insistence persists through covert 19 with starbucks projecting better than expected store performance and stellar drive-through and mobile order results it's worth noting that starbucks is a relatively safe stock featuring a beta under one the market portfolio at 0.82 which is rare for akron's typically riskier investments that in turn yield a greater expected return that said certainly starbucks is simplistic business model visibility coupled with a loyal following predictability and prospects and operation and ability to generate free cash flows and a p e ratio of 129.47 check ackman's classic boxes pershing square saves the oldest holding for last and least owned since quarter 4 2010 howard hughes corporation stock represents the remaining 7.13 of the portfolio the company is of course one of the largest and most successful real estate development companies worldwide ackman and former ceo david weinreb had a long history together personally they attended high school together their families are friends and have shared an on off interconnection for over 30 years professionally pershing square had a 26 stake in howard hughes in 2015. anyone familiar with ackman's career knows he has a colorful highly publicized history with real estate endeavors although some detracting commentators propagate fake news regarding that subject numbers don't lie and scream success at rarified decibels for this portfolio's overall success ackman's person square makes plenty of noise in the financial realm currently satisfying its investors with one of the highest performing hedge funds in the world right now in fact ackman is one of the 25 wealthiest hedge fund managers on the forbes 400 list despite being one of the youngest at age 54 the youngest is tiger global management founder chase coleman iii at 45. forbes lists his net worth at 2.2 billion dollars that number likely climbs soon if pershing prospects remain the same the hedge fund wields a net performance of 62.8 year-to-date according to pershing square's november 30th portfolio update the already impressive figure magnifies in magnificence when compared to a 5.89 year-to-date return for the dow jones industrial average and a 14.5 percent year-to-date return for the s and p 500 as of december 4th that said i caution everyone that past performance is not indicative of future results copying someone's investments without doing proper research and developing your own knowledge base and preferences including risk aversion comfort is never wise however you decide to invest remember diversification mitigates non-systematic risk thank you for watching and if you enjoyed the video hit the like and subscribe button stay smart and safe everyone

Channel: Business Basics

Views: 43,639

Rating: 4.8361344 out of 5

Keywords: Investing, Investments, Finance, Wall Street, ETF, Stock Market, Warren Buffett, Economy, Long Term, Bonds, Bitcoin, Portfolio, big tech hearing, tech ceo hearing, amazon, google, facebook, jeff bezos, mark zuckerberg, antitrust, antitrust hearing, tech hearing today, antitrust hearing today, reuters, live video, tech hearing live, Sundar Pichai, reuters news, news, live news, apple, tim cook, big tech, trump, biden

Id: 4LW-VNf_pSU

Length: 14min 37sec (877 seconds)

Published: Tue Jan 05 2021