We recently published a list of Bill Ackman’s Stock Portfolio: Top 9 Stocks to Buy. In this article, we are going to take a look at where Howard Hughes Holdings Inc. (NYSE:HHH) stands against other stocks to buy in Bill Ackman’s portfolio.
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.
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).
Howard Hughes Holdings Inc. (NYSE:HHH)
Number of Hedge Fund Holders as of Q3: 39
Pershing Square’s Equity Stake: $1.46 Billion
Howard Hughes Holdings Inc. (NYSE:HHH) is the fifth largest holding in Bill Ackman’s stock portfolio, operating as a real estate development conglomerate. Pershing Square held over 18.85 million shares of the company as of Q3 2024 which constitutes 37.6% of the company, making it the most remarkable shareholder in the company.
Howard Hughes Holdings Inc. (NYSE:HHH) demonstrated a strong Q3 2024 performance. The reported revenue of $327.15 million for the quarter indicates solid business growth. The earnings per share (EPS) for Q3 2024 was a solid $1.46, which exceeded analyst estimates of $1.27 by a significant $0.19 and is a clear positive.
In January 2025, Ackman announced that Howard Hughes Holdings Inc. (NYSE:HHH) would be buying back its shares for $500 million while Pershing Square would increase its stake in the company by $1 billion in the near future. Depending on how many investors Howard Hughes Holdings would buy out, such a move would increase Pershing Square’s stake in Howard Hughes to somewhere between 61% and 69%. Howard Hughes Holdings Inc. (NYSE:HHH) has announced Pershing Square’s proposal to acquire additional shares for a potential merger. However, there is no guarantee that the transaction will proceed since such a major decision requires approval from a majority of shareholders not affiliated with Pershing Square.
Pender Strategic Growth and Income Fund stated the following regarding Howard Hughes Holdings Inc. (NYSE:HHH) in its Q3 2024 investor letter:
“We added Howard Hughes Holdings Inc. (NYSE:HHH) as an asymmetric special situation investment, believing the company’s sum-of-the-parts real estate-driven value is significantly higher than the market reflects. Public markets often undervalue complex, self-funded companies like HHH, which have extended value creation cycles. The lack of clear catalysts to close this valuation gap has been a key challenge. However, in August, that changed when the management team announced they were exploring strategic options, including a potential take-private transaction, increasing the likelihood of such a move. As a lucky bonus, the Fed’s September rate cut also benefited HHH. We view this as an opportunistic short-term position.”
Overall, HHH ranks 5th on our list of stocks to buy in Bill Ackman’s portfolio. While we acknowledge the potential for HHH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HHH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.