We recently published a list of Bill Ackman’s Stock Portfolio: Top 9 Stocks to Buy. In this article, we are going to take a look at where Seaport Entertainment Group Inc. (NYSE:SEG) stands against other stocks to buy in Bill Ackman’s portfolio.
William Albert Ackman, more commonly known as Bill Ackman, is the founder and CEO of Pershing Square Capital Management, a hedge fund management company. Famous for his concentrated portfolio, with stakes in only 8 to 12 stocks at a time, Bill Ackman’s recent portfolio modification has revealed that 47% of his hedge fund is invested in just three stocks.
Analysis of his portfolio reveals that Bill Ackman invests in stocks that are mispriced relative to the long-term value of the company. Historically, this philosophy has served him well since Pershing Square’s total value was just under $13 billion by the end of the third quarter of 2024 with only 9 stocks.
A longtime supporter of the Trump administration, Ackman has been vocal about the benefits that the newly elected president will bring to the investment front. In addition to the prospects of deregulation and corporate tax cuts that could allow for stock prices to rise and have made many investors bullish on the market, Bill Ackman has more vested interests in the Trump office. Pershing has a roughly 10% stake in the common shares of the government-sponsored entities. He took to X to discuss his hypothesis about how Donald Trump could help these giants exit government conservatorship and be recapitalized, leading to substantial shareholder gains for Pershing Square.
In early 2024, Ackman launched a U.S. closed-ended fund called Pershing Square USA, Ltd., and talked about it during his 2024 letter to investors:
“The launch of PSUS is one of a number of strategic initiatives we plan to undertake which we believe will increase the long term sustainability of Pershing Square Capital Management, L.P., (“PSCM” or the “Investment Manager”), and will benefit PSH by reducing the performance fees that it pays. To this end, in June, we sold a 10% interest in PSCM, the proceeds of which will be used to anchor new fund launches including PSUS.”
However, Pershing Square officially canceled its IPO just one day after filing with the SEC due to a $2 billion listing as opposed to its original target valuation of $25 billion. Finally, while announcing the IPO cancellation on X, Ackman wrote “We will report back once we are ready to launch a revised transaction,” hinting at the possible launch of PSUS without listing shares on a stock exchange. Given this, we will take a look at the top stocks in Bill Ackman’s portfolio.
Our Methodology
The stocks discussed below were picked from Pershing Square’s Q3 2024 13F filings. They are compiled in the ascending order of Pershing Square’s stake in them as of September 30, 2024. In order to assist readers with more perspective, we have included the hedge fund sentiment regarding each stock using data from over 900 hedge funds tracked by Insider Monkey in the third quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Seaport Entertainment Group Inc. (NYSE:SEG)
Number of Hedge Fund Holders as of Q3: 15
Pershing Square’s Equity Stake: $57.44 Million
Seaport Entertainment Group Inc. (NYSE:SEG) is a leading entertainment and hospitality company established to own, operate, and develop a unique portfolio of assets at the intersection of entertainment and real estate. The company aims to offer unmatched experiences by integrating restaurant, entertainment, sports, retail, and hospitality offerings into distinctive real estate developments that redefine the entertainment and hospitality sectors.
Seaport Entertainment Group Inc. (NYSE:SEG) completed its previously announced separation from its predecessor parent company, Howard Hughes Holdings Inc. (NYSE:HHH), on July 31, 2024, becoming an independent, standalone publicly traded company listed on the NYSE under the ticker symbol “SEG.”
About this, Ackman stated in Pershing Square’s Quarter 2 investor letter:
“On August 1st, the company (Howard Hughes Holdings) successfully completed its spin-off of Seaport Entertainment Group (NYSE:SEG), which is comprised of the Seaport District in New York City, the Las Vegas Aviators minor league baseball team and certain other noncore entertainment assets. Under the leadership of CEO Anton Nikodemus, former President & COO of MGM CityCenter and an entertainment industry veteran with over 30 years of experience, we are optimistic that SEG will unlock the significant embedded upside potential in its unique collection of assets.
PSH is retaining its shares of SEG received from the spin-off and, along with the other Pershing Square funds, has entered into a standby purchase agreement to backstop a $175 million rights offering which SEG intends to launch shortly. Proceeds from the rights offering will provide SEG with the required liquidity to execute on its growth plan. Pershing Square is the largest shareholder of SEG. Anthony Massaro, a member of the investment team, has joined the Board of SEG.”
Seaport Entertainment Group Inc. (NYSE:SEG) recently provided an update on its corporate activities, which included entering into an interim license agreement and long-term lease with Grupo Gitano, based in Tulum, to open its first permanent, year-round New York dining and nightlife experience, GITANO NYC, spanning 13,605 square feet at Pier 17. Moreover, it announced the hiring and onboarding of employees from Creative Culinary Management Company LLC (“CCMC”), a subsidiary of Jean-Georges Restaurants, and entering into a shared services agreement with CCMC to begin internalizing food and beverage operations at most of its wholly owned and joint venture-owned restaurants at the Seaport.
Anton Nikodemus, Chairman, President, and CEO of Seaport Entertainment Group Inc. (NYSE:SEG), expressed excitement about introducing GITANO NYC to Pier 17, highlighting its Bohemian-inspired design, nightlife, and modern Mexican cuisine as a valuable addition to the company’s world-class waterfront restaurants with breathtaking views of the Brooklyn Bridge and the New York City skyline.
At the end of Q3 2024, 15 hedge funds in Insider Monkey’s database owned stakes in Seaport Entertainment Group Inc. (NYSE:SEG), worth $97.4 million collectively.
Overall, SEG ranks 9th on our list of stocks to buy in Bill Ackman’s portfolio. While we acknowledge the potential for SEG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SEG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.