In this article, we will take a detailed look at Bill Ackman’s Stock Portfolio: 9 Best Stocks to Buy.
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).
Bill Ackman’s Stock Portfolio: Top 9 Stock Picks
9. 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.
8. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders as of Q3: 202
Pershing Square’s Equity Stake: $1.26 Billion
Alphabet Inc. (NASDAQ:GOOGL) is the only stock that Ackman holds in the technology sector, and hence the only holding that allows Pershing Square to participate in the race for artificial intelligence. Although Ackman has maintained its stake in the company across the second and third quarters of 2024, its equity stake has fallen from $1.38 billion at the end of Q2 2024 to $1.26 billion by the end of Q3 the same year.
Popular for its leading search engine Google, Alphabet Inc. (NASDAQ:GOOGL) is also involved in developing artificial intelligence, mobile operating systems, and cloud computing services to make money through the sale of advertising and various service fees. Although revenue from Google Cloud is growing rapidly, the company still generates most of its revenue from Google Adsense, the branch that deals with advertising.
Alphabet Inc. (NASDAQ:GOOGL)’s revenue for Q3 2024 was $88.27 billion, up 11% from the same period the previous year, and compared to the analysts’ expectations of $86.39 billion. Its net income for the quarter was $26.3 billion, reflecting a year-over-year increase of 33.6%. Operating income was $28.5 billion, compared with $21.3 billion for the same quarter in 2023. It beat the consensus estimate of $1.83 by $0.29, reporting earnings per share for the quarter to be $2.12 against $1.55 EPS for the same period in 2023.
Google has partnered with HP to integrate its Project Starline with popular video conferencing platforms, Google Meet and Zoom, and is set to launch the 3D video call technology in 2025. After refining the technology, initially designed for a booth setup, into a more accessible screen-based format, Google is now preparing to introduce Project Starline to the broader public to improve the video conferencing experience. In addition, Google Cloud, a subsidiary of Alphabet, has revealed that streaming powerhouses Spotify and Paramount Global are now using its newly developed Axion chip for enhanced performance and efficiency, further strengthening the position of Alphabet Inc. (NASDAQ:GOOGL) as an industry leader in artificial intelligent.
Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”
