Bill Ackman’s Pershing Square filed amended 13D on December 1st and restated its 12.4% activist stake in Canadian Pacific Railway Ltd (CP). Pershing Square has about 21.06 million shares in CP, which is unchanged since November 22th. Pershing Square disclosed in the filing that its representatives are “engaged in ongoing discussions with representatives of the Issuer concerning, among other things, changes to the Issuer’s business and operations, its executive management and its board composition.” Files show Bill Ackman did not have a CP position in the second quarter. He began his purchases in common shares and call options after September 23rd, and reported 4.04 million shares at the end of the third quarter. CP realized strong uptrend recently and is up by more than 30% after September. The stock is now trading at $60.29, losing 5% year to date.
According to Insider Monkey’s hedge fund tracking list, six hedge funds had small positions in CP in the second quarter. Daniel Bubis’ Tetrem Capital Management had 1.28 million shares; Jim Simons’ Renaissance Technologies had 392 thousand shares at that time.
Bill Ackman is a long term value investor, taking advantage of short term downward moves in prices. He is particularly successful at special situations investments. William Ackman’s Pershing Square has a very concentrated portfolio. Bill Ackman’s returns have displayed option-like characteristics in 2009 and 2010. His General Growth Properties investment is almost as big as John Paulson’s subprime shorts. In May 2009, he recommended GGP stock at the Ira Sohn Conference and the stock returned more than 1000% since then. As a result of that investment, Ackman had a great 2010, returning 29.7%. This is very important because one might be imitating 90% of Ackman’s holdings and getting below market returns while Ackman’s clients enjoy 30% returns.
Canadian Pacific Railway Ltd is a provider of rail and intermodal freight transportation services. The company provides rail and intermodal freight transportation services over a 14,800-mile network through its subsidiaries. Transports include bulk commodities, forest products and other energy related products. The company was founded in 1881 and is based in Calgary, Canada.