Pershing Square, managed by billionaire Bill Ackman, has been mocked quite a bit this year for its short position in Herbalife (NYSE:HLF) but the fund did generate positive returns after fees in the first half of 2013. Furthermore, Ackman’s success in activist investments such as Canadian Pacific (NYSE:CP) makes him well worth following for initial ideas. While Pershing generally manages a concentrated portfolio, according to Pershing Square’s most recent 13F and our database here’s its latest 13F:
J.C. Penney closure. Due to the relative size of Ackman’s 13F portfolio ($11 billion) and the concentration at which he prefers to invest (typically around 10 positions), it’s understandable that many of his stakes are worth more than 5% of their respective companies. In other words, most of the activists moves are known well before his quarterly 13Fs are filed, and in this case, we knew he sold out of J.C. Penney (NYSE:JCP) in late August.
Ackman owned roughly 18% of the beleaguered retailer, and with the exit of Ron Johnson, it’s clear the hedge fund manager probably isn’t too keen on Penney reverting back to its old ways, particularly its coupon strategy. Remember Ackman was the key backer of Johnson and his store-within-a-store strategy, which looks like it will never see the light of day. Shares of J.C. Penney have recovered but are still down 55% year-to-date, making this an investment Ackman wishes he could take back.
Air Products & Chemicals is still a big bet. Air Products & Chemicals (NYSE:APD), meanwhile, is now one of Ackman’s largest holdings. He and Pershing Square originally disclosed that they owned a stake in the commodity chemicals large-cap in late July. Ackman is seeking to increase the size of Air Products’ board from 12 to 14 members next year while adding his own candidates, and he wants to control the search for a new CEO to replace the retiring John McGlade. Shares have traded rather wildly since Ackman’s stake was revealed, but they are up about 30% year-to-date, and are fairly valued at current prices.
Profit-taking at General Growth and Procter & Gamble. Lastly, Ackman was reducing his bet on General Growth Properties (NYSE:GGP) by 50% after he cut it by 10% in Q2, and he also slashed his Procter & Gamble (NYSE:PG) stake by three-quarters of its value. The activist has made a boatload on General Growth, a near-fifty bagger over the past five years, and his position in Procter & Gamble had appreciated by 25% over the last twelve months. Judging by the investment prospects of both the mall REIT and the consumer products company, it appears that Ackman’s sales here are simply profit-taking at its finest.