That sale never took place, and Ackman reversed his position earlier this year.
After experiencing a strong rally, General Growth Properties Inc (NYSE:GGP) appreciation has stalled. Over the last year, shares are up less than 5%, badly underperforming the S&P 500.
General Growth Properties Inc (NYSE:GGP)’s spin-off, Howard Hughes, has done far better. Since its creation in Nov. 2010, shares are up nearly 200% — General Growth is only up 16% over the same period of time.
Notably, Ackman has more control over Howard Hughes, given that he’s chairman of the board. Pershing Square’s position in Howard Hughes has remained untouched.
Pershing Square rebalances Procter & Gamble trade
Pershing Square rebalanced its ownership of consumer products giant The Procter & Gamble Company (NYSE:PG) in the second quarter, selling off nearly 70% of the shares it owned, but buying $2 billion worth of call options on the company.
Ackman had been urging The Procter & Gamble Company (NYSE:PG) to fire its CEO, Bob McDonald, for months. He finally got his wish when, earlier this year, Procter replaced McDonald with its former CEO, AG Lafley.
Prior to McDonald’s retirement, in May, Ackman gave a presentation on The Procter & Gamble Company (NYSE:PG) at the Ira Sohn investment conference.
Ackman argued that the company could be earning $6 per share within two years, giving it an intrinsic value of $125 per share (including dividends). Now trading at $80, that would represent upside of more than 50%.
But not everyone is swayed. Analysts at Standpoint Research downgraded the stock to Sell back in May, arguing that a new CEO would not be able to move the needle.
The biggest factor to watch may be the strength of the dollar. A stronger US dollar weighs on a multinational like The Procter & Gamble Company (NYSE:PG), as more than 60% of the firm’s sales come from abroad.
Nevertheless, Procter & Gamble was able to beat analyst expectations last quarter, posting better than expected earnings.
Investing alongside Pershing Square
Despite recent struggles with Herbalife and J.C. Penney, Pershing Square has one of the best track records in the business.
Investors who bought into Canadian Pacific when Ackman began pushing for a change could’ve more than doubled their money, while General Growth has offered a nearly 3000% gain since the depths of the financial crisis.
Right now, Ackman appears to betting big on Air Products & Chemicals, Inc. (NYSE:APD) and The Procter & Gamble Company (NYSE:PG), while cutting his firm’s exposure to General Growth.
While blindly following a fund manager — however profitable — into a position might not be the best idea, in light of Pershing’s strong, long-term track record, these are definitely investment ideas to consider.
The article Bill Ackman Buys Air Products, Sells General Growth, Bets Big on P&G originally appeared on Fool.com is written by Sam Mattera.
Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble.
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