An In-Depth Look at Billionaire Bill Ackman’s Concentrated Equity Portfolio

Let’s move on to the two largest equity holdings of Pershing Square, which did not incur any adjustments during the final three months of 2015. Bill Ackman’s investment vehicle held a 41.82 million-share position in Zoetis Inc. (NYSE:ZTS) at the end of 2015, which was valued at $2.00 billion and accounted for 16.09% of the fund’s equity portfolio. Earlier this week, the global animal health company released its financial results for the fourth quarter and full 2015 year, posting fourth-quarter revenue of $1.3 billion, a decrease of 3% year-over-year. Zoetis Inc. (NYSE:ZTS)’s 2015 revenue totaled $4.8 billion, which was flat relative to 2014. However, the company’s operational revenue, which excludes the impact of foreign exchange, grew by 8% year-over-year. At the same time, its adjusted net income for 2015 increased by 13% to $889 million, or $1.77 per diluted share. Let’s not forget to mention that Zoetis shares are down by nearly 12% in the past year. Cliff Asness’ AQR Capital Management owned 4.79 million shares of Zoetis Inc. (NYSE:ZTS) at the end of 2015.

Air Products & Chemicals Inc. (NYSE:APD) was Ackman’s largest equity holding at the end of December, comprising 20.55 million shares valued at $2.67 billion. The holding represented 21.46% of Pershing Square’s equity portfolio. The manufacturer of gases and chemicals has seen its stock decline by 14% over the past year or so. In a recent letter to investors, the activist hedge fund manager said that the stock is “the fifth most hedge-fund-owned stock in the index [S&P 500 Index], and hedge fund liquidations [due to increased market volatility] may, therefore, explain its substantial underperformance compared with its direct competitor Praxair since year-end”. Moreover, analysts at UBS, who have a ‘Buy’ rating on Air Products & Chemicals Inc. (NYSE:APD) and a price target of $151 on it, classify the stock as a defensive stock that can continue to generate double-digit EPS growth in the face of worsening macroeconomic conditions. It should be mentioned that Air Products & Chemicals is a dividend aristocrat that has increased its annual dividend payments for 38 consecutive years. John Griffin’s Blue Ridge Capital owned 1.60 million shares of Air Products & Chemicals Inc. (NYSE:APD) on December 31.

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