Pershing Square Q3 Letter: Restructures Herbalife Short

Bill Ackman is out with Pershing Square's third quarter letter to investors.  Pershing Square returned -3.7% net in the third quarter and was down 4.2% for the year at that time.

Pershing has restructured its short position in Herbalife (HLF).  Rather than shorting common stock, they've covered that and are now short via put options.

Ackman is also quite bullish on Mondelez (MDLZ): "We believe 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."

The letter also provides updates on their holdings: Restaurant Brands (QSR), ADP (ADP), Howard Hughes (HHC), Chipotle (CMG), Fannie Mae / Freddie Mac, Platform Specialty Products (PAH).

Embedded below is Pershing Square's Q3 letter:



For more recent hedge fund commentary, we've also posted up Third Point's Q3 letter as well as Greenlight Capital's Q3 letter.

Pershing Square Q2 Letter: Sold Undisclosed Hilton Stake

Bill Ackman's Pershing Square has put out its mid-year report which includes commentary on their investments.  They also disclose that they previously owned a stake in Hilton (HLT) but recently sold it after the spin-offs took place.

In the letter, they also write about their latest investment, Automatic Data Processing (ADP):

"ADP is a classic Pershing Square investment. It is a simple, predictable, free-cash-flow generative business that has under performed its potential. As a conservatively financed, capital-light business with long-term customer relationships in a sector with substantial positive growth, we believe it has modest downside. If it is able to achieve its potential, we believe it offers substantial upside. We acquired ADP for the funds along with a co-investment vehicle (PSVI) which we recently raised to increase our ownership of the company.  We believe that ADP is one of the highest quality businesses we have owned, and one which offers an enormous opportunity for operational improvement.

They also provide an update on their stake in Chipotle (CMG), noting that the company has battled another setback with a norovirus incident in Virginia.  That said, Pershing feels that the company is still on the right track.  They write,

"We made our investment in Chipotle anticipating that the sales recovery would be neither smooth nor predictable,but with a belief that the key drivers of Chipotle’s powerful economic moat and long-term success would remain intact. With the steps that the company has taken to improve its business, we continue to believe there is an enormous long-term growth opportunity for Chipotle given: (1) the significant potential to drive sales per restaurant higher through mobile and digital ordering, menu innovation, catering, and improved operations, (2) the opportunity to expand its vastly under penetrated restaurant base in the U.S., and (3) the considerable potential to build the brand internationally."

Their letter also touches on Mondelez (MDLZ), Howard Hughes (HHC), Air Products (APD), Restaurant Brands (QSR), Platform Specialty Products (PAH), Nomad Foods (NOMD), and Fannie Mae/Freddie Mac, as well its short position: Herbalife (HLF).


Embedded below is Pershing Square's Q2 letter:



You can download a .pdf copy here.

Pershing Square's Q1 Letter

Bill Ackman is out with Pershing Square's first quarter 2017 letter.  Pershing returned -2.6% net in the first quarter of the year.

We've already highlighted how Ackman pitched Howard Hughes at the recent Sohn conference. 

His Q1 letter provides updates on other stocks such as Mondelez (MDLZ), Air Products (APD), Restaurant Brands (QSR), Chipotle (CMG), Fannie Mae/Freddie Mac, as well as Platform Specialty Products (PAH), Nomad Foods (NOMD), and their short of Herbalife (HLF).



Embedded below is Pershing Square's Q1 letter:



You can download a .pdf copy here.

Pershing Square's 2016 Annual Report: VRX, APD, FNMA, HLF, HHC, MDLZ, NOMD, PAH, QSR

Bill Ackman's hedge fund firm Pershing Square Capital Management is out with its 2016 annual report.

Pershing Square lost 13.5% net in 2016.  The bulk of this loss was attributed to its previous position in Valeant Pharmaceuticals (VRX).

Ackman writes about why they ended up selling VRX:

"If the stock price had increased even very substantially from here, the impact on our overall performance would have been modest, and would not compensate  us for the human resources and substantial mindshare that this investment had and would have continued to consume  if we had remained a shareholder.  Furthermore, while Valeant has made significant progress and we expect  management to continue to do so, there is still a lot of work to be done.  

Clearly, our investment in Valeant was a huge mistake.  Th e highly acquisitive nature of Valeant’s business required  flawless capital allocation and operational execution, and th erefore, a larger than no rmal degree of reliance on  management.  In retrospect, we misjudged the prior management team and this contributed to our loss.  We deeply  regret this mistake, which has cost  all of us a tremendous amount, and whic h has damaged the record of success of  our firm." 

Despite the poor 2016, Pershing points out that they've generated a compound annual return of 14.8% compared to S&P returns of 7.7% over the same time period.

The report also details portfolio updates on numerous positions, including: Air Products & Chemicals (APD), Fannie Mae (FNMA) / Freddie Mac (FMCC), their short of Herbalife (HLF), Howard Hughes (HHC), Mondelez (MDLZ), Nomad Foods (NOMD), Platform Specialty Products (PAH), and Restaurant Brands (QSR).

They also touch on some of the positions they've exited.

Embedded below is Pershing Square's 2016 annual report:



You can download a .pdf copy here.

Pershing Square Trims Platform Specialty Products Position

Bill Ackman's hedge fund Pershing Square has filed an amended 13D with the SEC regarding its position in Platform Specialty Products (PAH).  Per the filing, Pershing now owns 14.5% of the company with 40.45 million shares.

This is a decrease of 2.28 million shares since the end of the second quarter when they owned over 42.73 million PAH shares.  The filing was made due to activity on November 10th when they sold shares at $8.78.

For more from this firm, we've highlighted other recent Pershing Square portfolio activity.

Per Yahoo Finance, Platform Specialty Products is "produces and sells specialty chemical products in the Americas, the Asia-Pacific, and Europe. It operates through two segments, Performance Solutions and Agricultural Solutions."

Pershing Square's Latest Presentation on Their Holdings

Bill Ackman's hedge fund firm Pershing Square Capital Management recently released its slideshow presentation from its European Investing Meeting.

In it, they update the status/progress of their investments with numerous slides on each name regarding their thesis and how it's playing out. 

The investments profiled include: Mondelez (MDLZ), Air Products (APD), Zoetis (ZTS), Restaurant Brands (QSR), Canadian Pacific (CP), Howard Hughes (HHC), Valeant Pharmaceuticals (VRX), Platform Specialty Products (PAH), Fannie Mae/Freddie Mac, Nomad Foods (NOMD), and their short of Herbalife (HLF).

Embedded below is Pershing's latest presentation:



You can download a .pdf copy here.

What We're Reading ~ 11/11/15

Dream Big: How the Brazilian Trio behind 3G Capital acquired AB Inbev, BK & Heinz [Correa]

10 questions to help define your investment philosophy [A Wealth of Common Sense]

A way to detect bias [Paul Graham]

What the Marines taught me about investing [WSJ]

The peril and opportunity of China [Mauldin]

Burbank's Passport says no place safe in China-led decline [Bloomberg]

Kyle Bass on China's looming banking crisis and the US economy [Fortune]

Platform Specialty Products could rebound [Barrons]

On Warren Buffett's stake in IBM [Medium]

On the focus of short-term profits [NYTimes]

How FICO became outdated [Pymnts]

Why the next sports empire will be built on eSports [Redef]

America's exurbs are booming [New Geography]

Bill Ackman's Sohn Conference Presentation on Platform Value Companies

We've posted up notes from the 2015 Sohn Investment Conference that just ended in New York.  Bill Ackman of Pershing Square Capital management pitched longs of Jarden (JAH), Valeant Pharmaceuticals (VRX), and Platform Specialty Products (PAH). 

His slideshow presentation is embedded below which focuses on the concept of platform value companies.


Bill Ackman's Sohn Conference Presentation 2015



Check out the rest of the Sohn Conference notes here.

Pershing Square's Presentation From European Investor Meeting

Bill Ackman's Pershing Square Holdings has just released a presentation on its portfolio from a recent European investor meeting.

In it, the hedge fund outlines their thesis on various portfolio companies and updates regarding those positions.  They also offer a look at their thinking on a recent addition to their portfolio: Valeant Pharmaceuticals (VRX).

Embedded below is Pershing Square's presentation from its recent European investor meeting:



You can download a .pdf copy here.

For more from this hedge fund, check out Pershing Square's annual report here.

Bill Ackman's Pershing Square Q3 Letter: Zoetis, Allergan & More

Bill Ackman is out with Pershing Square Capital's third quarter letter to investors.  Pershing is up 35% net for the year as of the end of October.  The Q3 letter outlines Ackman's thesis on his newest holding: Zoetis (ZTS). 

ZTS is a spin-off from Pfizer and is an animal health company.  Ackman took this position alongside Sachem Head Capital, another activist hedge fund run by Scott Ferguson (who previously worked at Pershing).

He likes that Zoetis has a durable product portfolio and is involved in markets with secular growth. Ackman writes, "We believe Zoetis is a scarce asset."

Additionally, Ackman outlines the Allergan (AGN) saga and also gives updates on his positions in Canadian Pacific (CP), Howard Hughes (HHC), Platform Specialty Products (PAH), Fannie & Freddie, Air Products (APD), as well as his Herbalife (HLF) short.

Embedded below is Pershing Square's Q3 letter:



For more from Ackman, check out some of his recent conference appearances: Ackman's fireside chat at Invest For Kids Chicago as well as Ackman's talk at Great Investors' Best Ideas Dallas.

Ackman's Pershing Square Acquires More Platform Specialty Products

Bill Ackman's hedge fund firm Pershing Square Capital Management has filed a 13D on shares of Platform Specialty Products (PAH).  Per the filing, Pershing now owns 26.4% of the company with over 42.7 million shares.

This means Ackman has purchased over 9.4 million PAH shares since the end of the second quarter.  The filing was made due to activity on October 3rd.

Per Yahoo Finance, "Platform Specialty Products Corporation develops, produces, and markets a range of specialty chemical and printing products in the Americas, Asia, and Europe."

Pershing Square Exercises Warrants on Platform Specialty Products

Bill Ackman's hedge fund firm Pershing Square Capital has updated its stake in Platform Specialty Products (PAH).  Per a Form 4 filed with the SEC, Pershing Square has revealed that they exercised their warrants on the name.

They owned 12,500,0001 warrants and each 3 warrants entitles the holder on exercise to buy 1 share of common stock for $11.50.  As such, Pershing received 4,166,665 shares of PAH.  The transaction took place on March 7th, 2014.

After this, Pershing Square owns 33.3 million shares of Platform Specialty Products.  Pershing disclosed their PAH stake in January once shares listed on the NYSE.  However, keep in mind that Pershing owned a stake prior to this listing.

We've also highlighted how fellow hedge fund Blue Ridge Capital also owns a PAH stake as well. 

And then of course Martin Franklin of Jarden and Nicolas Berggruen of Berggruen Holdings are involved too.  Platform was formed with the intent to acquire companies and their first deal was MacDermid, a specialty chemicals manufacturer for $1.8 billion.

This isn't the first time Ackman has worked with Berggruen either.  They teamed up on Justice Holdings, which then bought Burger King.

What We're Reading ~ Analytical Links 3/5/14

The 1-hour China Book: Peking University professors explain China business [Jeff Towson]

Investing's biggest irony: everyone thinks they're a contrarian [Morgan Housel]

Summary of Warren Buffett's long CNBC appearance this week [Brooklyn Investor]

Buffett tells investors to get real about EBITDA [Herb Greenberg]

A new form of shareholder activism gains momentum [Dealbook]

A look at Platform Specialty Products [Seeking Alpha]

The decline of department store sales [USNews]

VRX, ENDP, ACT: Will pharmaceutical roll-ups end badly? [Value Institute]

House with a modified loan is symbol of servicers' tug of war with investors [Dealbook]

You won't have broadband competition without regulation [Reuters]

On Carlos Slim's challenge to his telecom dominance [Economist]

America should make life easier, not harder, for activist investors [Economist]

Digital habits: Nielsen profiles the US consumer [TNooz]

The future of the news business [Marc Andreessen]

How and why to keep a 'commonplace book' [RyanHoliday]

Blue Ridge Capital Discloses Platform Specialty Products Position

John Griffin's hedge fund firm Blue Ridge Capital has filed a 13G with the SEC and disclosed a position in Platform Specialty Products (PAH).  Per the filing, Blue Ridge now owns 7.72% of the company with 8 million shares.

As we detailed previously, Bill Ackman also owns a PAH stake.  The company was formed to acquire companies and their first deal was MacDermid, a specialty chemicals manufacturer.  Shares of PAH are newly listed on the NYSE. 

It's unclear if Blue Ridge owned a stake in Platform Specialty Products before they listed on the NYSE like Ackman did.

You can view other recent portfolio activity from Blue Ridge Capital here.

Pershing Square Discloses Platform Specialty Products Stake

In a 13G filed with the SEC, Bill Ackman's hedge fund Pershing Square Capital Management has disclosed a 30.9% ownership position in Platform Specialty Products (PAH) with 33,333,332 shares. 

Ackman's position is broken down into over 28.1 million shares and over 4.1 million shares via October 2016 Warrants.  Pershing owns around 12.5 million warrants and every three warrants gives them the right to buy 1 share of common stock for $11.50.

Longtime followers of Pershing Square will know that this is not a new stake for the hedge fund, but they've disclosed it because PAH is newly listed on the NYSE.  The filing was made due to activity on January 23rd.

Platform was formed with the intent to acquire companies and their first deal was MacDermid, a specialty chemicals manufacturer for $1.8 billion.  Martin Franklin of Jarden (JAH), Nicolas Berggruen of Berggruen Holdings and Ackman's Pershing all own significant Platform stakes.

This isn't the first time Berggruen and Ackman have worked together, either.  While the Platform deal is a bit different, Ackman and Berggruen teamed up on Justice Holdings.  Justice then bought Burger King and relisted the stock, a position Ackman still held at the end of Q3.

Click here for more recent activity from Bill Ackman's fund.