How Was Bill Ackman Preparing for 2013? – Canadian Pacific Railway Limited (USA) (CP), The Proctor & Gamble Company (PG)

General Growth Properties Inc (NYSE:GGP). The company relied on cheap credit prior to 2008 for its expansion of shopping malls across the U.S., which ultimately led to a Chapter 11 filing.  After emerging from Chapter 11, General Growth shed some of its underperforming properties, but is still left with a few stragglers that appear to have weighed down the stock, combined with the fact that the economy is not exactly favorable to the construction of new malls, for example.  Ackman was rumored to be pushing for a sale of General Growth to Simon Property Group, but reportedly dropped his crusade after Brookfield Asset Management bought Pershing’s warrants in the company. Obviously, General Growth traded very erratically this year, but has gained more than 20% over the past twelve months.

No. 4 in this top five sits BEAM Inc (NYSE:BEAM), which makes popular spirits such as Jim Beam Bourbon, Maker’s Mark, Courvoisier Cognac and Canadian Club Whisky. The outlook for Beam is a favorable one due to two factors: (1) a general bullishness in the bourbon-based marketplace, and (2) the company’s acquisition of Pinnacle vodka. While there has been no shortage of volatility this year in trading, the fundamentals are strong, as earnings showed a 37% improvement year-over-year in 2012.

Rounding out this top five is retailer J.C. Penney Company, Inc. (NYSE:JCP). Plagued by sluggish sales despite very aggressive efforts to transform JCP into a type of “boutique” environment to appeal to younger consumers, the company’s stock price is down nearly 25% year-to-date, and doesn’t show any sign of improvement. While most of the blame is being placed on CEO Ron Johnson and the permabears are calling for a resignation, this outlook may be short sighted, as there’s still obvious support from the smart money, who likely have a longer time horizon. In addition to Ackman, Curtis Macnguyen and Murray Stahl are also bullish, and aggregate hedge fund interest did increase by 4%.

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