The brain behind top us hedge fund Pershing Square Capital – the man who put Bill back into billionaire – Bill Ackman, runs a tight shop when it comes to building a portfolio.
Diversify to protect against risk?
A mugs game.
Bill believes in getting it right, first time and not going further into the mire than you possibly need to.
The Pershing portfolio has but eight stocks right now and the austerity of ideation has seen the value of Ackman’s eight jump more than 50% in the last year.
This focused approach allows him to invest heavily in companies he believes have exceptional potential.
While many financial advisors recommend diversifying your investments to protect against risk, Ackman’s approach has worked for him — in the past year, the value of his holdings has grown over 51%.
So, should you invest in the same stocks as Ackman? Here’s a closer look at each of the companies that Ackman owns and what makes them stand out from their competitors.
Howard Hughes Holdings Inc
Howard Hughes Holdings Inc. (HHH) operates in the real estate sector, focusing on creating integrated communities that blend residential living with commercial, retail and recreational facilities, catering to everyday needs and fostering a sense of community among residents. Projects like the Summerlin community in Nevada encompass everything from homes and parks to shopping centers and business offices, providing a self-sufficient living environment.
What sets HHH apart in its industry is its model of developing self-contained communities from the ground up. This approach allows the company to manage every aspect of development, from infrastructure to commercial leasing, cutting middleman costs and creating a continuous revenue stream. The scale and scope of such developments offer substantial potential for growth over time, making HHH a distinct player in the real estate development field.
Restaurant Brands International Inc.
Restaurant Brands International Inc. (QSR) stands out as a major player in the fast food industry, holding ownership over several iconic brands, including Burger King, Tim Hortons and Popeyes. The company’s revenue comes from sales at its restaurants, franchise royalty payments and property revenues from properties it leases or subleases.
A key strength of QSR lies in its diversified portfolio of well-established fast food chains. The variety of its offerings means that it can appeal to a wide range of consumer tastes and dining preferences. This diversification helps stabilize the company’s earnings, as it is not overly reliant on a single brand or market.
Chipotle Mexican Grill Inc.
Chipotle Mexican Grill Inc. (CMG) has carved a niche in the fast-casual dining sector with its streamlined menu of burritos, tacos and salads. The brand is particularly noted for its emphasis on fresh, high-quality ingredients and the ability to customize meals, which means it can cater to a diverse array of dietary preferences and tastes.
A defining characteristic of Chipotle is its commitment to sourcing organic and locally produced ingredients wherever possible. This strategy resonates with health-conscious consumers willing to pay a premium for food that they perceive as healthier.
Hilton Worldwide Holdings Inc.
Hilton Worldwide Holdings Inc. (HLT) operates as a global leader in the hospitality industry, managing a broad portfolio of hotels and resorts known for their quality and service. The company’s portfolio includes a range of properties from luxury to general service hotels.
One of the strengths of Hilton is its loyalty program, Hilton Honors. This program rewards frequent travelers with points that can be redeemed for free nights, experiences and various other benefits, making it especially attractive to business travelers and frequent tourists. Hilton’s longstanding reputation for quality and reliability helps it stand out in the competitive hospitality market.
Alphabet Inc.
Alphabet Inc. (GOOG and GOOGL), the parent company of Google, is a behemoth in the technology sector with operations that span across digital advertising, cloud computing, artificial intelligence and a range of other tech ventures.
The company has established itself as a key player in multiple areas of technology, largely due to subsidiaries like YouTube, Google Cloud and Waymo, with each being a leader in its respective field. Alphabet’s success stems from its ability to continuously push the boundaries of technology and integrate these advancements across its vast network of products and services.
Ackman holds both GOOG and GOOGL shares. Both grow at the same pace, but GOOGL shares give the owner voting rights, while GOOG shares do not.
Canadian Pacific Kansas City Limited
Canadian Pacific Kansas City Limited (CP), formerly known as Canadian Pacific Railway, is part of the North American transportation sector. As a transcontinental railway, CP offers comprehensive freight transportation services, logistics solutions and supply chain expertise across Canada and the United States. Its extensive rail network allows for the efficient movement of goods across vast distances, serving as a backbone for industrial and commercial markets.
A significant factor in CP’s ongoing strategy is its focus on strategic mergers and acquisitions. A notable example is its recent acquisition of Kansas City Southern. By creating a single network that spans Canada, the U.S. and Mexico, CP is uniquely positioned to capitalize on trade flows across these regions. This strategic expansion may bring long-term growth and strengthen CP’s position in the logistics and transportation industry.
Lowe’s Companies Inc.
Lowe’s Companies Inc. (LOW) is a leading entity in the home improvement retail sector, offering a wide array of products necessary for maintenance, repair, remodeling and home decorating. With stores across the United States, Lowe’s caters to both do-it-yourself (DIY) retail consumers and professional clients, such as contractors.
In recent years, Lowe’s has intensified its focus on the Pro market. To support this, Lowe’s has been refining in-store operations to better accommodate the needs of professional customers. This includes streamlining the in-store layout to make it easier for professionals to find what they need quickly, as well as dedicated Pro trailer parking, checkouts and financing options.
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