In this article, we discuss the 7 top stock picks of billionaire Bill Ackman.
Bill Ackman of Pershing Square has led his hedge fund to huge successes over the years, growing the investment firm from a small-time unit in 2004 to managing an equity portfolio worth over $7.4 billion at the end of the second quarter of 2022. Ackman, during his time as a money manager, has grown his personal wealth to over $3.3 billion, attesting to the solidity of his investment acumen. Ackman recently told investors in a note that he would be stepping down from his role as the chief investment officer of the fund, handing the position over to Ryan Israel.
Even though Ackman has taken a step back from money management, he clarified that he would remain the chief of his hedge fund and control the decision-making process. The clarification is important because the markets have been in turmoil due to soaring inflation in the past few months, with even established names like The Walt Disney Company (NYSE:DIS), Walmart Inc. (NYSE:WMT), and Marriott International, Inc. (NASDAQ:MAR) trading lower due to rate hikes and recession fears.
In a recent interview with news platform CNBC, Ackman pointed out that he owned the same companies that he owned at the beginning of the year, even though the market situation has changed dramatically since then. Ackman said his portfolio consisted of “great businesses” that could “ride through a challenging time like this”. The billionaire noted that his biggest fear so far this year had been inflation and he was in favor of the Federal Reserve raising interest rates quickly to bring it under control.
Ackman, in response to a question about whether the central bank needed to raise rates at the pace at which it was doing, said that the Fed has to “do what they have said” and raise rates by “4% or something and keep them there for a reasonably extended period of time like a year or so” in order to bring down inflation. Latest US inflation data, released in mid-September, indicates that more rate hikes are on the way as the consumer price index continues to climb despite falling energy and food prices.
Our Methodology
The companies listed below were picked from the investment portfolio of Pershing Square at the end of the second quarter of 2022. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Bill Ackman of Pershing Square
Top Stock Picks of Billionaire Bill Ackman
7. Restaurant Brands International Inc. (NYSE:QSR)
Number of Hedge Fund Holders: 20
Restaurant Brands International Inc. (NYSE:QSR) operates as a quick service restaurant company. According to regulatory filings, Pershing Square owned 23.8 million shares in Restaurant Brands International Inc. (NYSE:QSR) at the end of June 2022 worth $1.1 billion, representing 16% of the portfolio.
On September 7, investment advisory Barclays initiated coverage of Restaurant Brands International Inc. (NYSE:QSR) stock with a Market Perform rating and a price target of $64. Analyst Danillo Gargiulo issued the ratings update.
At the end of the second quarter of 2022, 20 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Restaurant Brands International Inc. (NYSE:QSR), compared to 23 in the previous quarter worth $1.8 billion.
Just like The Walt Disney Company (NYSE:DIS), Walmart Inc. (NYSE:WMT), and Marriott International, Inc. (NASDAQ:MAR), Restaurant Brands International Inc. (NYSE:QSR) is one of the stocks that elite investors are monitoring.
In its Q4 2021 investor letter, Pershing Square Capital, an asset management firm, highlighted a few stocks and Restaurant Brands International Inc. (NYSE:QSR) was one of them. Here is what the fund said:
“Restaurant Brands International Inc. (NYSE:QSR) is a high-quality business with significant long-term growth potential trading at a highly discounted valuation.
Comparable sales have recovered or are well on their way to recovery.
- Tim Hortons Canada improved to a mid-single-digit decline during Q3 relative to 2019.
- Burger King U.S. under new leadership and poised to make a recovery.
- Burger King International and the Popeyes brand continue to grow well with strong same-store sales growth relative to 2019 levels. As underlying sales trends recover, QSR’s share price should more accurately reflect our view of its business fundamentals (…read more).”
6. The Howard Hughes Corporation (NYSE:HHC)
Number of Hedge Fund Holders: 24
The Howard Hughes Corporation (NYSE:HHC) owns, manages, and develops commercial, residential, and hospitality operating properties. Securities filings reveal that Pershing Square owned 13.6 million shares of The Howard Hughes Corporation (NYSE:HHC) at the end of the second quarter of 2022 worth $926 million, representing 12.42% of the portfolio.
On July 26, BMO Capital analyst John Kim initiated coverage of The Howard Hughes Corporation (NYSE:HHC) stock with an Outperform rating and a price target of $90, noting the firm was a developer and owner of unique master planned communities.
At the end of the second quarter of 2022, 24 hedge funds in the database of Insider Monkey held stakes worth $1 billion in The Howard Hughes Corporation (NYSE:HHC), the same as in the previous quarter worth $1.6 billion.
In its Q2 2022 investor letter, Bernzott Capital Advisors, an asset management firm, highlighted a few stocks and The Howard Hughes Corporation (NYSE:HHC) was one of them. Here is what the fund said:
“The Howard Hughes Corporation (NYSE:HHC): Master planned communities in attractive markets benefit from population shifts and housing shortages and should provide growth for years to come. Its income-producing commercial real estate assets generate cash flow which support investment and build out of its communities. The stock trades at a discount to NAV and the company is repurchasing shares.”
5. Domino’s Pizza, Inc. (NYSE:DPZ)
Number of Hedge Fund Holders: 32
Domino’s Pizza, Inc. (NYSE:DPZ) operates as a pizza company internationally. Latest data shows that Pershing Square owned 2 million shares of Domino’s Pizza, Inc. (NYSE:DPZ) at the end of the second quarter of 2022 worth $803 million, representing 10.76% of the portfolio.
On September 7, Bernstein analyst Danilo Gargiulo initiated coverage of Domino’s Pizza, Inc. (NYSE:DPZ) stock with an Underperform rating and a price target of $334, noting that competing aggregators would reduce the tech and delivery competitive advantage of the firm.
At the end of the second quarter of 2022, 32 hedge funds in the database of Insider Monkey held stakes worth $2.2 billion in Domino’s Pizza, Inc. (NYSE:DPZ), compared to 27 in the previous quarter worth $1.8 billion.
In its Q2 2022 investor letter, LRT Capital Management, an asset management firm, highlighted a few stocks and Domino’s Pizza, Inc. (NYSE:DPZ) was one of them. Here is what the fund said:
“Domino’s Pizza, Inc. (NYSE:DPZ) is the world’s largest franchisor of pizza restaurants with over 13,800 locations in 85 countries. As for any restaurant operator, the key metric to consider for Domino’s Pizza is same-store-sales (SSS) growth. Growing same-store-sales are ultimately how a restaurant business increases earnings from its existing assets. The company continues to impress in this criterion with SSS having grown in the U.S. for 40 consecutive quarters, and an astounding 109 straight quarters internationally (…read more)
4. Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Holders: 39
Chipotle Mexican Grill, Inc. (NYSE:CMG) owns and operates Chipotle Mexican Grill restaurants. At the end of June 2022, Pershing Square owned 1.1 million shares in Chipotle Mexican Grill, Inc. (NYSE:CMG) worth $1.4 billion, representing 19.36% of the portfolio.
On September 7, Bernstein analyst Danilo Gargiulo initiated coverage of Chipotle Mexican Grill, Inc. (NYSE:CMG) stock with an Outperform rating and a price target of $2,000, predicting secular growth in the Latin American segment of the firm in the coming months.
At the end of the second quarter of 2022, 39 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in Chipotle Mexican Grill, Inc. (NYSE:CMG), compared to 38 in the preceding quarter worth $2.95 billion.
In addition to The Walt Disney Company (NYSE:DIS), Walmart Inc. (NYSE:WMT), and Marriott International, Inc. (NASDAQ:MAR), Chipotle Mexican Grill, Inc. (NYSE:CMG) is one of the stocks that hedge funds are buying.
In its Q1 2022 investor letter, Ensemble Capital, an asset management firm, highlighted a few stocks and Chipotle Mexican Grill, Inc. (NYSE:CMG) was one of them. Here is what the fund said:
“Chipotle Mexican Grill, Inc. (NYSE:CMG) (6.0% weight in the Fund): In a recent blog post called GREAT COMPANIES ARE FORGED DURING CRISIS we discussed why companies with economic moats, relevant products and services, and those that create stakeholder value are more resilient in the face of crisis than the average company. Less advantaged competitors, in turn, struggle, which creates opportunities for great companies to get even better.
We think Chipotle navigated the COVID environment better than any major quick-serve restaurant and has consequently gone from strength to strength. Indeed, from March 1, 2020 to March 31, 2022, Chipotle shares gained 106% versus the S&P 500 Restaurants Index’s 28% return, including dividends (…read more)
3. Canadian Pacific Railway Limited (NYSE:CP)
Number of Hedge Fund Holders: 42
Canadian Pacific Railway Limited (NYSE:CP) owns and operates a transcontinental freight railway. Latest data shows that Pershing Square owned 2.9 million shares of Canadian Pacific Railway Limited (NYSE:CP) at the end of the second quarter of 2022 worth $205 million, representing 2.75% of the portfolio.
On September 12, investment advisory Bank of America upgraded Canadian Pacific Railway Limited (NYSE:CP) stock to Buy from Neutral and raised the price target to $87 from $85. Analyst Ken Hoexter issued the ratings update.
At the end of the second quarter of 2022, 42 hedge funds in the database of Insider Monkey held stakes worth $7 billion in Canadian Pacific Railway Limited (NYSE:CP), compared to 41 in the preceding quarter worth $8.1 billion.
In its Q3 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Canadian Pacific Railway Limited (NYSE:CP) was one of them. Here is what the fund said:
“The other major headwind to relative performance in the quarter was Canadian Pacific Railway Limited (NYSE:CP). The stock has been a strong performer for the Strategy but negative sentiment around its bidding war for U.S. rail operator Kansas City Southern has weighed on the stock since late May. As a result, the cyclical uptick we expected from the company has been masked by the takeover. Indeed, we have been frustrated by the muted performance among Canadian Pacific and other recently added positions in our structural bucket of growth companies with more cyclical business models or that are undergoing a restructuring that should lead to a step change improvement in earnings. As more regions reopen from COVID-19 and spending rebounds, we expect better performance from our structural names, including Airbus and hospitality and food service provider Compass.”
2. Lowe’s Companies, Inc. (NYSE:LOW)
Number of Hedge Fund Holders: 53
Lowe’s Companies, Inc. (NYSE:LOW) operates as a home improvement retailer in the United States and internationally. According to regulatory filings, Pershing Square owned 10.2 million shares in Lowe’s Companies, Inc. (NYSE:LOW) at the end of June 2022 worth $1.7 billion, representing 23.89% of the portfolio.
On August 18, Truist analyst Scot Ciccarelli maintained a Buy rating on Lowe’s Companies, Inc. (NYSE:LOW) stock and raised the price target to $263 from $237, appreciating the second quarter earnings results of the firm.
At the end of the second quarter of 2022, 53 hedge funds in the database of Insider Monkey held stakes worth $4.9 billion in Lowe’s Companies, Inc. (NYSE:LOW), compared to 65 in the previous quarter worth $5.5 billion.
In its Q4 2021 investor letter, Pershing Square Capital Management, an asset management firm, highlighted a few stocks and Lowe’s Companies, Inc. (NYSE:LOW) was one of them. Here is what the fund said:
“Lowe’s Companies, Inc. (NYSE:LOW) is a high-quality business with significant long-term earnings growth potential
Supportive macroeconomic backdrop
- Aging housing stock, lack of new inventory, robust home equity values, and unprecedented pro project backlog
- COVID-19 causing millennials to enter the housing market
Positioned to grow EPS largely independent of market conditions
- Idiosyncratic revenue opportunities driving share gains
- Self-help initiatives catalyzing operating margin expansion
- Buybacks representing ~8% of current market capitalization planned for 2022 (…read more)”
1. Hilton Worldwide Holdings Inc. (NYSE:HLT)
Number of Hedge Fund Holders: 60
Hilton Worldwide Holdings Inc. (NYSE:HLT), a hospitality company, owns, leases, manages, develops, and franchises hotels and resorts. The hedge fund chaired by Ackman owned close to 9.9 million shares of Hilton Worldwide Holdings Inc. (NYSE:HLT) at the end of June 2022 worth $1.1 billion, representing 14.79% of the portfolio.
On September 16, Berenberg analyst Stuart Gordon upgraded Hilton Worldwide Holdings Inc. (NYSE:HLT) stock to Buy from Hold and raised the price target to $152 from $140, noting that the accelerating recovery in lodging was yet to be reflected in the shares.
At the end of the second quarter of 2022, 60 hedge funds in the database of Insider Monkey held stakes worth $3.7 billion in Hilton Worldwide Holdings Inc. (NYSE:HLT), compared to 52 in the previous quarter worth $5.5 billion.
In its Q4 2021 investor letter, Pershing Square Capital, an asset management firm, highlighted a few stocks and Hilton Worldwide Holdings Inc. (NYSE:HLT) was one of them. Here is what the fund said:
“Hilton Worldwide Holdings Inc. (NYSE:HLT) is a high-quality business with a multi-year runway of accelerated earnings growth and an exceptional management team. Industry conditions poised to exceed pre-COVID levels in the near term.
HLT well positioned for enhanced long-term performance.
- Average daily revenue per room (“RevPAR”) likely to recover to pre-COVID levels before the end of 2022.
- Occupancy is improving with average daily rate (“ADR”) already above pre-COVID levels.
- Ability to change room rates daily provides hedge against inflation (…read more).”
You can also take a peek at 12 Best Environmental Stocks to Invest In and 10 Best Nickel Stocks to Buy Now.
Follow Insider Monkey on Twitter
Suggested Articles:
- 10 Best Automotive Stocks to Invest in Now
- 10 Best Self Driving Car Stocks to Invest In
- 10 Best Renewable Energy Stocks to Buy According to Hedge Funds
Disclosure. None. 7 Top Stock Picks of Billionaire Bill Ackman is originally published on Insider Monkey.
Hedge Fund Resource Center