4 Best Stocks to Buy in 2023 According to Bill Ackman

In this article, we discuss the 4 best stocks to buy in 2023 according to Bill Ackman. To read the detailed history of Bill Ackman and his hedge fund’s performance, go directly to the 8 Best Stocks to Buy in 2023 According to Bill Ackman.

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. (NYSE:HLT) covered 12.82% of Pershing Square Capital Management with close to 9.3 million shares worth $1.3 billion.

Hilton Worldwide Holdings Inc. (NYSE:HLT) 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. (NYSE:HLT) as one of the top 30 long-term stocks through 2025.

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

“Hilton Worldwide Holdings Inc. (NYSE:HLT) 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. (NYSE:QSR) 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. (NYSE:QSR) is headquartered in Ontario, Canada.

Restaurant Brands International Inc. (NYSE:QSR) 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. (NYSE:QSR) 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. (NYSE:CMG) 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. (NYSE:CMG)’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. (NYSE:CMG) 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. (NYSE:CMG) shares with a $2,270 price target, up from $1,960.

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

“Chipotle Mexican Grill, Inc. (NYSE:CMG) (+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. (NYSE:LOW) 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. (NYSE:LOW) represented 19.64% of the fund’s portfolio in the quarter.

Lowe’s Companies, Inc. (NYSE:LOW) 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. (NYSE:LOW) has a dividend yield of 2.01%.

In the last three months, Lowe’s Companies, Inc. (NYSE:LOW) 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. (NYSE:LOW)’s shares but lowered his price target to $225 from $235.

You can also take a look at the 13 Best Places in Florida to Retire On a Budget and the 20 Biggest Blockchain Companies in the World in 2023.

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