Pershing Square Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. An annual portfolio net return of 26.9% was recorded by the fund for the whole year of 2021, versus the S&P 500 Index, the FTSE 100, and MSCI World Index that delivered a 28.7%, 17.4%, and 22.3% return respectively for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Pershing Square Capital Management, in its Q4 2021 investor letter, mentioned Restaurant Brands International Inc. (NYSE: QSR) and discussed its stance on the firm. Restaurant Brands International Inc. is an Oakville, Canada-based fast-food restaurant company with a $17.6 billion market capitalization. QSR delivered a -5.98% return since the beginning of the year, while its 12-month returns are down by -6.43%. The stock closed at $57.05 per share on February 19, 2022.
Here is what Pershing Square Capital Management has to say about Restaurant Brands International Inc. in its Q4 2021 investor letter:
“QSR is a high-quality business with significant long-term growth potential trading at a highly discounted valuation.
Comparable sales have recovered or are well on their way to recovery.
Tim Hortons Canada improved to a mid-single-digit decline during Q3 relative to 2019.
Burger King U.S. under new leadership and poised to make a recovery.
Burger King International and the Popeyes brand continue to grow well with strong same-store sales growth relative to 2019 levels. As underlying sales trends recover, QSR’s share price should more accurately reflect our view of its business fundamentals.Management continuing to make investments for future growth.
Digital: G&A investment to modernize digital platforms and loyalty programs.
New Units: Return to historical mid-single-digit unit growth in 2021 and beyond.
Brand Acquisitions: Purchased Firehouse Subs for $1bn in December.Remains cheap relative to intrinsic value and peers.
Trades at less than 18x our estimate of 2022 free cash flow per share.
The company began repurchasing shares in August.As underlying sales trends recover, QSR’s share price should more accurately reflect our view of its business fundamentals. QSR’s share price increased 3% in 2021 and has decreased 7% year-to-date in 2022.”
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Our calculations show that Restaurant Brands International Inc. (NYSE: QSR) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. QSR was in 24 hedge fund portfolios at the end of the third quarter of 2021, compared to 21 funds in the previous quarter. Restaurant Brands International Inc. (NYSE: QSR) delivered a -0.28% return in the past 3 months.
In September 2021, we also shared another Pershing Square Capital Management’s Q2 2021 views on QSR in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
