8 Best Stocks to Buy in 2023 According to Bill Ackman

Published May 19, 2023 at 6:19 am EDT Updated August 19, 2026 at 9:49 am EDT

In this article, we discuss the 8 best stocks to buy in 2023 according to Bill Ackman.

Bill Ackman manages and owns the New York-based hedge fund Pershing Square Capital Management, better known as Pershing Square. Ackman received his Bachelors of Arts degree in Social Studies from Harvard in 1988, and in 1992, he completed his MBA from Harvard Business School. As of May 18, he has a net worth of $3.5 billion. Bill Ackman is an activist investor who is known for pressuring The Wendy’s Company (NASDAQ:WEN) to spin off Tim Hortons and being involved in a proxy battle with Canadian Pacific Railway.

Story of Ackman’s Success

Bill Ackman founded Gotham Partners with David P. Berkowitz in 1992. His initial success is owed to a thesis on MBIA Inc. (NYSE:MBI). At the time, MBIA Inc. (NYSE:MBI) was an AAA-rated company and Ackman questioned it. He wrote:

“Were the insurance company downgraded by even one notch (from AAA to AA+), even the company acknowledges its business could be materially impaired. In light of MBIA’s enormous leverage, the company’s credit quality, underwriting, transparency, accounting, and track record must be beyond reproach. In addition, and as importantly, the company must have minimal liquidity risk. Based on our research, we conclude that MBIA fails to meet these standards.

It appears to us that an actual or perceived downgrade of MBIA would have fairly draconian consequences to the company and create substantial drains on the company’s liquidity. The self-reinforcing and circular nature of the company’s exposures make it a poor candidate for a AAA rating.”

Moreover, Ackman placed short bets against the insurer believing that the company will default due to collateral debt obligations exposure, and faced a massive backlash, especially from the CEO of the company. By June 2008, MBIA Inc. lost its AAA rating, and Ackman’s firm Pershing Square was able to make $1.1 billion off of it.

The Great Financial Crisis proved to be a highly profitable time for Bill Ackman. In 2009, General Growth Properties filed for bankruptcy after its debt reached $27 billion and was unable to refinance it. Pershing Square was one of the firms that helped reorganize the company and in 2011, Ackman told Bloomberg that the effort “turned $60 million into $1.6 billion.”

Pershing Square’s Performance and Bets

Bill Ackman started Pershing Square Capital Management with $54 million. In the last 10 years, the hedge fund’s portfolio has gained close to 134% and in the last three years, the fund’s annualized average returns are at 12%. Despite the rough economic conditions, Pershing Square has returned 20.81% in the last 12 months according to Tipranks.

According to Pershing Square’s first quarter 2023 13F filings, the firm managed over $10.2 billion worth of 13F equity positions in eight stocks. The firm added Alphabet Inc. (NASDAQ:GOOGL) and Alphabet Inc. (NASDAQ:GOOG) to its portfolio. The Alphabet’s Class A and Class C shares account for over 10.4% of the company’s portfolio. Furthermore, it reduced holdings in three companies and made additional purchases in two.

The most noteworthy stocks in Pershing Square’s portfolio include Lowe’s Companies, Inc. (NYSE:LOW), Chipotle Mexican Grill, Inc. (NYSE:CMG), and Restaurant Brands International Inc. (NYSE:QSR).

8 Best Stocks to Buy in 2023 According to Bill Ackman

Our Methodology

We picked the top 8 stocks from the Q1 2023 13F portfolio of Bill Ackman’s Pershing Square Capital Management. The stocks have been ranked in ascending order of the hedge fund’s stake in them during Q1 2023.

Best Stocks to Buy in 2023 According to Bill Ackman

8. Alphabet Inc. (NASDAQ:GOOGL)

Pershing Square’s Q1 2023 Stake: $$226.650 million

Alphabet Inc. is one of the Big Five American tech corporations. The ticker symbol GOOGL represents the Class A shares of the company. The Class A shareholders have voting rights in the company. Pershing Square Capital Management initiated a position in Alphabet Inc. in the first quarter of 2023 with 2.185 million shares worth $226.650 million representing 2.21% of the hedge fund portfolio.

Alphabet Inc. presented its Google I/O ’23 conference on May 10 where it announced the removal of the waitlist for its artificial intelligence chatbot, Bard. The company made it available in over 180 countries. At the conference, Alphabet Inc. revealed several other product launches including its new Android device, Google Pixel 7a. Since the conference, the company’s Class A shares have been up by nearly 10% at the time of writing.

Alphabet Inc. is a significant addition to Pershing Square’s portfolio along with the likes of Lowe’s Companies, Inc., Chipotle Mexican Grill, Inc., and Restaurant Brands International Inc..

7. Alphabet Inc. (NASDAQ:GOOG)

Pershing Square’s Q1 2023 Stake: $839.256 million

The ticker symbol GOOG represents Alphabet Inc.’s Class C shares which have no voting rights. In Q1 2023, the company’s Class C shares represented 8.21% of Pershing Square’s 13F portfolio as the firm initiated its position in Alphabet Inc. with 8.07 million shares, worth $839.256 million.

On May 11, Jefferies analyst Brent Thill described the recent Google I/O conference as “one of the most substantial in years,” and said that it “presented a much more coherent message about its generative AI strategy.” Thill maintains a Buy rating on Alphabet Inc.’s shares with a $130 price target.

Diamond Hill Capital made the following comment about Alphabet Inc. in its Q1 2023 investor letter:

“We did have several strong performing stocks this quarter. Our top contributors to return included NVR, Amazon, Alphabet Inc., Microsoft and Booking Holdings, all of which posted double-digit gains. Shares of media and technology giant Alphabet outperformed as the company announced expense discipline while continuing to invest in its core products of Google Search, YouTube and Google Cloud.”

6. Canadian Pacific Kansas City Limited (NYSE:CP)

Pershing Square’s Q1 2023 Stake: $1.172 billion

Canadian Pacific Kansas City Limited (NYSE:CP) was created with the merger of Canadian Pacific Railway and Kansas City Southern on April 14, 2023. It is the first railroad company that connects Canada, Mexico, and the United States. In the first quarter of 2023, Pershing Square Capital Management held 15.238 million shares of Canadian Pacific Kansas City Limited worth $1.172 billion, covering 11.47% of the hedge fund’s portfolio.

On April 26, Canadian Pacific Kansas City Limited posted its Q1 2023 results which were quite solid despite the headwinds in the freight business and performed better than most of its peers. The company generated a revenue of C$2.27 billion, marking an increase of 23.4% year-over-year, and reported an EPS of C$0.90 which was 2 cents lower than estimated. On the same day, Canadian Pacific Kansas City Limited also declared a C$0.19 per share quarterly dividend (in line with the previous) payable by July 31 to the shareholders of record on June 30.

On May 16, Argus analyst John Eade upgraded Canadian Pacific Kansas City Limited’s shares from Neutral to Buy in light of the merger of the two railroad companies with a $92 price target.

Brasada Capital Management made the following comment about Canadian Pacific Kansas City Limited in its Q1 2023 investor letter:

“We have owned Canadian Pacific Kansas City Limited for about 2 years and we increased the size of our position during the quarter. On March 15th, the Surface Transportation Board (STB) approved CP’s merger with Kansas City Southern (KCS). This was the first Class 1 Railroad merger since Canadian National acquired Illinois Central in 1999. This will also be the last major railroad merger as any future combinations would not be able to gain approval from the STB. CP/KCS will be the only single-line railway connecting Canada to Mexico. It creates new rail options for shippers, and the company expects it to shift 64,000 truckloads from road to rail.

Keith Creel is the CEO of CP and he actually worked at Illinois Central when it was acquired by Canadian National. Creel is the protégé of Hunter Harrison, who was the Bill Walsh of railroading. Just as Walsh created the famous West Coast offense. Harrison created Precision Scheduled Railroading (PSR) and implemented it at several Class I railroads. Creel was with Harrison at Illinois Central, Canadian National, and he succeeded him as CEO at CP. CP has thrived under Creel’s leadership, and we believe there is an enormous amount of value that he can create with KCS. A picture is worth a thousand words and below is the new CP/KCS map.”

5. The Howard Hughes Corporation (NYSE:HHC)

Pershing Square’s Q1 2023 Stake: $1.278 billion

The Howard Hughes Corporation (NYSE:HHC) is a Texas-based real estate development company that focuses primarily on master-planned communities and also develops other commercial and residential properties.

Despite the slowdown in the housing market due to increasing interest rates, The Howard Hughes Corporation is relatively stable. The company’s total operating assets Net Operating Income (NOI) increased from $227 million in 2021 to $239 million in 2022. According to The Howard Hughes Corporation’s first-quarter earnings report, the company’s total operating assets NOI increased by 3% YoY to $59 million.

Bill Ackman’s Pershing Square Capital Management was the most prominent shareholder of The Howard Hughes Corporation in Q1 2023 with over 15.98 million shares worth over $1.278 billion. The company represented 12.51% of the hedge fund’s portfolio.

Lowe’s Companies, Inc., Chipotle Mexican Grill, Inc., and Restaurant Brands International Inc. are some of the prominent names in Pershing Square’s 13F portfolio in addition to The Howard Hughes Corporation.

Bernzott Capital Advisors made the following comment about The Howard Hughes Corporation in its Q4 2022 investor letter:

“The Howard Hughes Corporation: The real estate developer’s master planned community results were better than expected amid fears of a housing slowdown, and stabilizing interest rates eased pressure on the stock from earlier in the year. Pershing Square, a significant shareholder, tendered to purchase more shares during the quarter, highlighting value.”

4. Hilton Worldwide Holdings Inc. (NYSE:HLT)

Pershing Square’s Q1 2023 Stake: $1.3 billion

Hilton Worldwide Holdings Inc. (NYSE:HLT) is a multinational hospitality company headquartered in Virginia, USA. The company holds one of the world’s largest portfolios of hotels and resorts and operates globally.

In the first quarter of 2023, Hilton Worldwide Holdings Inc. covered 12.82% of Pershing Square Capital Management with close to 9.3 million shares worth $1.3 billion.

Hilton Worldwide Holdings Inc. has been covered by 7 Wall Street analysts in the last three months and 4 of them maintain a Buy or Outperform rating on the company shares. The company’s average analyst price target stands at around $157.86. On March 29, Morgan Stanley picked Hilton Worldwide Holdings Inc. as one of the top 30 long-term stocks through 2025.

Here is what Pershing Square said about Hilton Worldwide Holdings Inc. in its Q2 2022 investor letter:

“Hilton Worldwide Holdings Inc. is a high-quality, asset-light, high-margin business with significant long-term growth potential, led by a superb management team. The unforeseen arrival of the COVID-19 pandemic catalyzed a rapid and near-complete standstill in global travel, with RevPAR (the industry metric for same-store sales at a given hotel) down roughly 90% at the nadir of the pandemic. We increased our investment in Hilton during the pandemic as we believed the economic dislocation from COVID-19 would prove to be transient and that industry projections regarding the timeline for recovery were too pessimistic.

From the moment the pandemic began, Hilton’s management team took decisive actions to ensure the company not only managed through what it knew would be a challenging period, but also positioned the company to generate improved margins, cash flows, and investment returns once the business recovered. In hindsight, Hilton’s experience with COVID-19 – the 100-year proverbial flood – affirmed the company’s unique high-quality, asset light, high-margin business model, and reinforced our belief that Hilton deserves a premium valuation.

While Hilton entered 2022 impacted by the Omicron variant, results have vastly improved throughout the year as COVID-19 has evolved towards a more endemic virus, and consumer behavior has adapted accordingly. In recent months, Hilton’s system-wide RevPAR has surpassed 2019 levels and continues to improve. Recent strength has been led by domestic leisure travel occasions as consumer spending continues to shift from goods to services. …” (Click here to read the full text)

3. Restaurant Brands International Inc. (NYSE:QSR)

Pershing Square’s Q1 2023 Stake: $1.624 billion

Restaurant Brands International Inc. is one of the world’s biggest fast-food restaurant operators in the world. It owns famous restaurant chains such as Burger King, Popeyes, and Tim Hortons. Restaurant Brands International Inc. is headquartered in Ontario, Canada.

Restaurant Brands International Inc. posted its Q1 2023 earnings report on May 2 where it generated a revenue of $1.59 billion, outperforming the estimates by $30 million and reported a non-GAAP EPS of $0.75, beating the estimates by $0.11. Additionally, the company recorded an adjusted EBITA of $588 million which was up 15.8% organically compared to Q1 2022.

In Q1 2023, Pershing Square Capital Management remained the most significant stakeholder of Restaurant Brands International Inc. for the seventh quarter in a row with over 24.194 million shares worth $1.624 billion, making up 15.89% of the fund’s portfolio.

2. Chipotle Mexican Grill, Inc. (NYSE:CMG)

Pershing Square’s Q1 2023 Stake: $1.758 billion

Chipotle Mexican Grill, Inc. is a California-based operator of fast-casual restaurant chains. According to its 10-K report, the company operates in over 3,200 locations as of February 2023. Chipotle Mexican Grill, Inc.’s stock has made significant strides in 2023 and is up 52.86% year-to-date at the time of writing, compared to 9.78% for the S&P 500.

Since the fourth quarter of 2016, Pershing Square has been the largest stakeholder of Chipotle Mexican Grill, Inc. with the exception of a few quarters. In the first quarter of 2023, the firm held over 1.029 billion of the company’s shares, valued at $1.758 billion, covering 17.2% of Pershing Square’s portfolio.

On April 26, Truist analyst Jake Bartlett reaffirmed a Buy rating on Chipotle Mexican Grill, Inc. shares with a $2,270 price target, up from $1,960.

Ensemble Capital Management made the following comment about Chipotle Mexican Grill, Inc. in its Q1 2023 investor letter:

“Chipotle Mexican Grill, Inc. (+23.12%): The company continues to attract loyal customers to their all natural, fresh food alternative to the highly processes, junk food sold by most fast food companies. Despite needing to raise prices by double digit rates to offset inflation in food prices and higher labor costs, the company has seen resilient customer demand. While digital orders have fallen from peak COVID levels, digital sales stabilized in the fourth quarter at approximately 40% of all orders or twice the volume seen pre-COVID. The company has remained busy opening new locations with a focus on those that can support a Chipotlane, the company’s drive through concept that leverages customers’ ability to order ahead on their phones to make pick up times very short. Today, 18% of all locations have a Chipotlane pick up option compared to just 3% pre-COVID.”

1. Lowe’s Companies, Inc. (NYSE:LOW)

Pershing Square’s Q1 2023 Stake: $2 billion

Lowe’s Companies, Inc. operates home improvement and hardware retail stores in the United States. It is our top pick in best stocks to buy according to Bill Ackman as Pershing Square held over 10 million shares of the company, worth over $2 billion in the first quarter of 2023. Lowe’s Companies, Inc. represented 19.64% of the fund’s portfolio in the quarter.

Lowe’s Companies, Inc. is also one of our best income stocks according to analysts. The company has been growing its dividend for nearly 50 years. At the time of writing, Lowe’s Companies, Inc. has a dividend yield of 2.01%.

In the last three months, Lowe’s Companies, Inc. has been covered by 18 analysts with 10 of them maintaining a Buy or Outperform rating. The latest coverage was given by Baird analyst Peter Benedict on May 12. Benedict maintained an Outperform rating on Lowe’s Companies, Inc.’s shares but lowered his price target to $225 from $235.

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