Can Bill Ackman’s Smaller-Cap Picks Beat The Market? History Says No

Next is chemical producer Platform Specialty Products Corp (NYSE:PAH), in which Ackman holds a stake of 42.74 million shares with a value of $1.10 billion as of March 31. The sunshine-state-based company has been having an impressive year on the stock exchange, returning 18.00% year-to-date and lifting it above the $5.00 billion small-cap threshold. The performance may be due in part to the company closing its deal to acquire Arysta LifeScience Limited, a new unit that PSP CEO Mr. Daniel H. Leever says will be integrated into his company’s operations, creating valuable synergies for the business. The results for the first quarter however failed to meet analysts’ expectations, with reported earnings per share of $0.21 falling $0.01 short. Another hedge fund with a stake in Platform Specialty Products Corp (NYSE:PAH) is John Griffin‘s Blue Ridge Capital, owning 11.00 million shares with a value of $282.26 million.

The last smaller-cap pick of Ackman is in real estate corporation Howard Hughes Corp (NYSE:HHC), which has also had a strong 2015 performance, returning 11.00% year-to-date. Ackman held a stake of 3.57 million shares with a value of $553.11 million, a stake that was unchanged during the first quarter. The Texas-based HHC operates real estate in 16 states and has been showing a strong shift from sales to income during the first quarter of 2015, mainly driven by its income producing assets. New openings in 2014 like the Outlet Collection at Riverwalk helped to boost the company’s first quarter results, strengthening its leasing income. The expansion is continuing this year as well in an attempt to further increase that income. However, the decline in oil prices, which has hit the energy hub of Houston hard, is potentially worrisome. A slowdown in Houston’s economy would impact Howard Hughes Corp (NYSE:HHC), with the company saying that major layoffs in the Houston area would harm its planned communities in the area. On the other hand, the firm’s prestigious project on the New York Seaport has seemingly come a little closer to fruition after a deal with privately-held Edison Properties was struck this April, giving HHC important building rights in the area. A major stake in Howard Hughes Corp (NYSE:HHC), although decreased by 7% during the first quarter, was kept by Horizon Asset Management, managed by Murray Stahl. After the decrease, the fund held 4.82 million shares with a value of $747.57 million.

Disclosure: None