In this article, we will take a look at the 2 stocks that activist investor and billionaire Bill Ackman is buying. If you want an in-depth analysis of Mr. Ackman’s trading strategies, head over to Activist Investor and Billionaire Bill Ackman is Buying These 7 Stocks.
2. Agilent Technologies, Inc. (NYSE:A)
Bill Ackman’s Stake Value: $1.7 billion
Percentage of Bill Ackman’s 13F Portfolio: 16.14%
Number of Hedge Fund Holders: 39
Agilent Technologies, Inc. (NYSE:A) is headquartered in Santa Clara, California and it is a healthcare company that deals with the backend of the sector by providing equipment to laboratories. This equipment includes laboratory, diagnostic and other segments.
Bill Ackman’s Pershing Square held 11.6 million shares of Agilent Technologies, Inc. (NYSE:A) worth $1.7 billion and representing 16.14% of its portfolio. At the same time, 39 of the 873 hedge funds polled by Insider Monkey held a stake in Agilent Technologies, Inc. (NYSE:A). In its third-quarter earnings, the company reported non-GAAP EPS of $1.10 and revenue of $1.59 billion, beating analyst estimates on both counts. In a September note, Cowen set a $200 price target for the company and set its rating to Outperform.
Agilent Technologies, Inc. (NYSE:A) largest stakeholder after Pershing Square is Ian Simm’s Impax Asset Management, with 4 million shares worth $599 billion.
In a second-quarter letter, Pershing Square outlined that:
“Our large commitment to UMG required that we raise cash from the sale of one of our other investments. In light of the high quality of companies in our portfolio, this was a diffi cult decision to make. Ultimately, we chose to sell Agilent, as its current share price approached our conservative estimate of intrinsic value. If we did not need the capital, we would not have sold the stock.
Agilent has been a highly successful investment since our original purchase nearly two years ago, compounded by our additional investment in the company in the Covid market decline last year. Agilent’s stock price has increased 2.2 times since our initial purchase as a result of the company’s acceleration in revenue growth and profi tability.10 Agilent has been a critical supplier of technology and services to labs around the world fi ghting the Covid pandemic. The company’s management team led by Mike McMullen deserves enormous credit for the company’s success and for its important contribution to science and the fi ght against Covid for which we all should be extremely grateful.”
1. Lowe’s Companies, Inc. (NYSE:LOW)
Bill Ackman’s Stake Value: $1.9 billion
Percentage of Bill Ackman’s 13F Portfolio: 18.36%
Number of Hedge Fund Holders: 63
Lowe’s Companies, Inc. (NYSE:LOW) is one of the oldest American companies out there since it was founded in 1921. It is based out of California and it primarily targets the home improvement sector by offering several products such as flooring, décor, paint and kitchens in its stores.
By the end of the second quarter of this year, Bill Ackman’s Pershing Square held 10 million Lowe’s Companies, Inc. (NYSE:LOW) shares worth $1.9 billion and representing 18.36% of its portfolio. During the same time period, 63 of the 873 funds polled by Insider Monkey held a stake in the company.
Lowe’s Companies, Inc. (NYSE:LOW) ‘s financial report for the second quarter reported GAAP earnings per share (EPS) of $4.25 and revenue of $25.57 billion, beating analyst estimates for both. In an analyst note shared in October, Loop Capital analyst Laura Champine set a $220 price target for the company and downgraded it to Hold, citing supply chain constraints.
The company’s biggest hedge fund holder after Pershing Square is Eric W. Mandelblatt’s Soroban Capital Partners, who holds 4.2 million shares that are roughly worth $826 million.
Pershing Square, in its second-quarter investor letter talked about Lowe’s Companies, Inc. (NYSE:LOW):
“Since the onset of the COVID-19 pandemic, Lowe’s has experienced a signifi cant acceleration in demand driven by consumers nesting at home, higher home asset utilization and the reallocation of discretionary spend. In the three years since Marvin Ellison became CEO, the company has executed a multi-year transformation plan to bolster Lowe’s retail fundamentals, reduce structural costs, expand distribution capabilities, and modernize systems and the company’s online capabilities. This transformation has allowed Lowe’s to meet consumers’ needs during this highly elevated period of demand, and positioned the company for continued success and accelerated earnings growth.
In the second quarter, Lowe’s reported U.S. same-store-sales growth of 2.2%. Growth was bolstered by strength from the critical Pro consumer, where Lowe’s reported growth of 21%, off setting moderating do-it-yourself (“DIY”) demand. While DIY demand has receded from peak-COVID-19 periods, Pro customer demand has accelerated as consumers engage Pro’s for larger renovation projects.
Notwithstanding the headline growth fi gure, which is impacted by comparisons to COVID-19-aff ected months from spring of 2020, demand remains extremely elevated relative to baseline 2019 levels. July same-store-sales, the most recent full month for which the company has provided disclosure, were up 31.5% on a two-year basis and management indicated August month-to-date results are substantially similar. More signifi cantly, Lowe’s reported Pro growth of +49% on a two-year basis in Q2, evidence that Lowe’s focus on the Pro is bearing fruit. Share gains with the critical Pro customer will provide a tailwind to growth that should allow Lowe’s to outperform market-level growth going forward.”
Disclosure: None. You can also take a peek at the 15 Best Gambling Stocks to Buy Now and 10 Best Stocks for Animal Lovers.
