Billionaire Bill Ackman’s Top Stock Picks for 2013

Page 1 of 2

The most popular small cap stocks among hedge funds, as revealed by 13F filings, produce an excess return of 18 percentage points per year according to our research (learn more about our small cap strategy). This is the case even though 13Fs disclose long equity positions at the end of a quarter but are only released six to seven weeks later. Other hedge fund strategies based on 13Fs may also be possible. These filings can also be used to look up top managers’ stock picks and then do more research on the companies if they seem like good values.

Bill Ackman in front of Perishi

Billionaire Bill Ackman of Pershing Square achieved large paper profits immediately following his short presentation on Herbalife Ltd. (NYSE:HLF) late last year, but the victory was short lived. A number of value investors questioned his reasoning for shorting the stock, and Herbalife is now close to where it was trading before Ackman went public. The issue has also become personal after a fierce argument with activist investor Carl Icahn on CNBC. When we studied Pershing Square’s most recent 13F (which, as a reminder, does not report short positions) compared to previous filings we found very little change. Here are some trends among Ackman’s top picks:

Canadian Pacific. The Canadian railroad was again the largest holding by market value in Pershing Square’s portfolio, with the fund reporting a position of over 24 million shares. Canadian Pacific Railway Limited (NYSE:CP)’s stock price is up 60% in the last year; while earnings did drop last quarter compared to the fourth quarter of 2011, Wall Street analysts believe that the company will bounce back and so the forward P/E is only 16 (the company did report higher revenues over the same time frame). The railroad industry carries the Warren Buffett seal of approval, with Berkshire Hathaway having purchased large U.S. railroad Burlington Northern Santa Fe a few years ago (see Buffett’s stock picks).

Retail. Two retail related companies were among Ackman’s top picks: General Growth Properties Inc (NYSE:GGP), which he famously earned an enormous return on following his presentation on the company in May 2009, and J.C. Penney Company, Inc. (NYSE:JCP). General Growth, which is primarily engaged in ownership of shopping malls and other retail properties, is organized as a real estate investment trust; it currently pays a dividend yield close to 2.5%. The struggling JC Penney saw its sales fall 27% in the quarter ending in October compared to the same period in the previous fiscal year, and analyst consensus is that it will remain unprofitable for some time (the company has reported higher than expected losses in each of the last three quarters). 43% of the outstanding shares are held short.

See two more stocks Ackman liked:

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!