Here’s What Billionaire Bill Ackman Had to Say About His Biggest Investments at the DealBook Conference

Bill Ackman of Pershing Square recently did an interview with Andrew Ross Sorkin at the DealBook conference in New York and Insider Monkey was there to cover it. Below are some of the noteworthy highlights from the interview, especially as they related to Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Chipotle Mexican Grill, Inc. (NYSE:CMG), Herbalife Ltd. (NYSE:HLF), and Mondelez International Inc (NASDAQ:MDLZ).

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First, Bill Ackman is extremely bullish on the Trump Presidency. Ackman said:

“I woke up extremely bullish on Trump.. United States is the greatest business in the world, and it has been under-managed for a very long period of time. We now have a businessman as President.. He’s going to launch a major construction program.. he’s going to get a lot done.”

By getting things done, Ackman thinks Trump will increase the growth rate in the U.S. In addition, Ackman expects corporate taxes to fall under the Trump administration, an action that will likely increase net income margins across the board.

While he admits that the investment was a mistake, Ackman sees a path forward for Pershing’s Valeant Pharmaceuticals Intl Inc (NYSE:VRX) position. Specifically, Ackman believes Valeant will sell its non-core assets, fix its operations, and that its management will probably at rename the company at some point. Ackman is confident in CEO Joseph Papa, and believes he will do a good job in unlocking value. With the political climate in Washington set to change, there is potential for Ackman’s investment to rebound if the company executes. Pershing Square was long more than 21 million shares of Valeant Pharmaceuticals Intl Inc (NYSE:VRX) at the end of the second quarter.

On Chipotle Mexican Grill, Inc. (NYSE:CMG), which Pershing Square owns around 10% of, Ackman calls the burrito chain “a great company and a great brand”, which made a mistake that caused customers and shareholders to lose faith in the company. Ackman notes that Pershing has done well in the fast food sector in the past with investments in Wendy’s and McDonalds. It’s a space Pershing knows very well. Given that its business is simple and predictable, Ackman thinks Chipotle Mexican Grill, Inc. (NYSE:CMG)’s problems are fixable once people move on from the food safety issues of last year.

On the next page we’ll see what Ackman had to say about Herbalife and Mondelez.

As to his Herbalife Ltd. (NYSE:HLF) short, Ackman says that he “has an enormous stomach for volatility” and that he knows the “ultimate outcome” — that in his opinion, “it’s gonna go to zero.” As for why he believes so, Ackman notes that Herbalife’s business is declining. It was supposed to make $8 per share in 2017 according to analyst models a few years ago and now Wall Street is estimating the stock will earn around $4.60-to-$5.00 per share. Ackman notes that the CEO just quit, which to him is never a good sign. Ackman thinks Herbalife having to recruit 2 million distributors a year for its growth objective will be more and more difficult over time. The hedge fund manager did say that Herbalife Ltd. (NYSE:HLF) will likely be his last public short given that there is no upside to going public.

As for the Street’s speculation that 3G, which owns a big chunk of Kraft, might buy Mondelez International Inc (NASDAQ:MDLZ), Ackman says “I don’t know if there is a fund [for 3G], or what they plan to do with it, and the last thing they [3G] wants to do is let other people know.” According to our database, Pershing owned almost 23 million shares of Mondelez International Inc (NASDAQ:MDLZ) at the end of June.

Disclosure: None