As a newly amended filing with the SEC showed, Bill Ackman has reduced his exposure to Canadian Pacific Railway Limited (USA) (NYSE:CP), currently holding around 13.94 million shares, versus 17.16 million reported earlier. Pershing Square reported selling some 3.22 million shares, for $149.75 apiece, the total value of the deal raising to $509.43 million. Following the disposal, Pershing owns 8.0% of Canadian Pacific’s outstanding common stock.
Moreover, Pershing Square stated that the reduction was made for general portfolio management reasons and the fund still remains the largest shareholder of Canadian Pacific Railway Limited (USA) (NYSE:CP). The move made by Ackman comes a couple of days after Canadian Pacific disclosed its earnings for the first quarter of the year. The company posted solid results with a net income of $245 million, or $1.44 per share, higher from $217 million, or $1.24 per share reported a year earlier, and slightly above the expectations. Following the announcement of the results, the stock of Canadian Pacific gained around 4% in the following days.
The stock of Canadian Pacific Railway Limited (USA) (NYSE:CP) trades at a P/E of around 33.00, which is one of the highest in the Railroad industry, and is well above the industry average of approximately 19. Moreover, the company trades at a Price/Earnings-to-Growth ratio of below 1.00, while the average recommendation stands at ‘Overweight.’ For the full year, the company is expected to further increase its profits, with the consensus estimate for EPS amounting to over $8.00.
Last year, Mr. Ackman has already reduced his exposure to Canadian Pacific by around 30%, holding previously around 24.20 million shares. Andreas Halvorsen‘s Viking Global and Daniel S. Och‘s OZ Management are two other funds that reported holding shares of Canadian Pacific Railway Limited (USA) (NYSE:CP). Viking Global added the company to its equity portfolio in the last quarter of 2013, while Oz Management raised its holding by almost 40% to 3.56 million shares.
Recently, Pershing Square entered into an agreement with Valeant Pharmaceuticals International Inc (NYSE:VRX), under the terms of which, the parties intend to acquire the pharmaceutical company Allergan, Inc. (NYSE:AGN).