Bill Ackman’s Pershing Square disclosed a purchase of 500K shares of Fortune Brands (FO) yesterday. Since Bill Ackman is now a 10% owner of the stock, he has to disclose his transactions within two business days. Ackman paid $62.87 for 275K shares and $63 for 225K shares. He now owns more than 17 Million shares, totaling more than $1 Billion.
Bill Ackman has the largest position in FO among 300+ hedge funds we are tracking, but he is not the only one. James Dinan’s York Capital initiated a $240 Million position in FO during the first quarter. Kenneth Mario Garschina’s Mason Capital also initiated a $128 Million position in FO during the first quarter. Curtis Schenker’s Scoggin, James Crichton and Adam Weiss’ Scout Capital, Michael Karsch’s Karsch Capital, Jamie Zimmerman’s Litespeed, and Douglas Spiegel’s Realm Partners had smaller bets on Fortune Brands at the end of first quarter as well. They will let Ackman do the work and reap the benefits.
Most recently we transcribed Bill Ackman’s speech at the Ira Sohn Conference, detailing his view about Dollar General. Ackman usually makes concentrated bets and works with the management to make changes that will unlock value in mispriced stocks. He isn’t always successful but he has an excellent track record. As a result, whenever he discloses a brand new activist stake in a given company, the stock price increases by about 10 percent immediately after the disclosure. That is what happened with Fortune Brands. It was trading at $50 and went above $55 after Ackman’s disclosure in October.