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Billionaire Ackman Loves Valeant Pharmaceuticals Intl Inc (VRX), Air Products & Chemicals Inc. (APD), Canadian Pacific Railway Limited (USA)(CP)

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In its latest 13F filing with the U.S. Securities and Exchange Commission, billionaire Bill Ackmans Pershing Square disclosed its holdings as of the end of the first quarter of 2015. Mr. Ackman is a long-term value investor and activist, taking advantage of short-term downward moves in prices to enter stocks. After taking large positions in companies, he then advocates for changes from management in order to unlock more value. Pershing Square returned 40% in 2014 and was up 3.4% to 3.5% during the first quarter of 2015. In its 13F, the fund revealed only eight positions, valued at $14.97 billion. Mr. Ackman’s top holdings, in terms of value, are represented by Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Air Products & Chemicals Inc. (NYSE:APD), Canadian Pacific Railway Limited (USA)(NYSE:CP), and Zoetis Inc (NYSE:ZTS).

Bill Ackman, Pershing Square, BMW AG, the City, Canary Wharf, London, China, subsidy, Jonathan Ferro,

We track the latest moves of Pershing Square and more than 700 other hedge funds to learn about their ideas. Many think that 13F filings are not helpful to find any investment opportunities because of the maximum 45-day delay during each filing period. However, our research has shown that imitating a portfolio of the 15 most popular small-cap picks among these professional investors can generate an average return of nearly one percentage point in excess of the S&P 500 Total Return Index’s monthly return. Moreover, these picks generated an alpha of around 80 basis points per month. By comparison, the 50 most popular stocks among hedge funds overall (which are mostly large- and mega-cap companies) had a monthly alpha of six basis points and underperformed the market by around seven basis points per month. Our small-cap strategy has returned 139% in the last 2.5+ years since we started tracking it in real time in August 2012, beating the S&P 500 ETF (SPY) by over 80 percentage points (read more details here).

Now, we will discuss Ackman’s top holdings, beginning with Valeant Pharmaceuticals Intl Inc (NYSE:VRX), a new position containing 19.47 million shares, the stake being valued at $3.87 billion. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is a multinational specialty pharmaceutical company, with a market cap of $76.96 billion. The company’s total revenue rose by 16% to $2.2 billion in the first quarter of 2015 from $1.9 billion in the same period a year ago. Net income was $73.7 million, versus a net loss of $22.6 million in the same quarter last year. Valeant’s stock has risen by nearly 80% since May 2014. Another investor of the company is Jeffrey Ubben’s ValueAct Capital, which held 19.38 million Valeant shares as of the end of the first quarter.

Pershing Square’s second top holding is Air Products & Chemicals Inc. (NYSE:APD), with ownership of 20.55 million shares worth $3.1 billion. The stake remained unchanged over the quarter. The company’s stock, which closed at $147.51 on Tuesday, has gained 24.48% during the past year. Recently, analysts at Deutsche Bank reiterated a “Buy” rating on Air Products & Chemicals Inc. (NYSE:APD), setting a price target of $175.00 per share. Air Products & Chemicals Inc. (NYSE:APD) posted first-quarter 2015 earnings per share (EPS) of $1.55, versus EPS of $1.32 in the same quarter last year. Revenue for the quarter was $2.4 billion, less than the consensus estimate of $2.6 billion. Other shareholders of the company include Andreas Halvorsen’s Viking Global and Daniel S. Och’s OZ Management.

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