Bill Ackman is something of a celebrity in the investing community. He heads up Pershing Square Capital Management — the hedge fund he founded — which has more than $10 billion in assets under management. The well-known activist, who describes himself as a fundamental value investor, made a name for himself by taking sizable stakes in companies and pushing leaders to make changes that increase shareholder value.
One of the more noteworthy aspects of Ackman’s investment strategy is that Pershing Square generally owns large stakes in just eight to 12 companies and generally holds them for years. The hedge fund focuses on high-quality, large-cap, North American companies with limited downside and predictable, recurring cash flows. That strategy has been wildly successful for Ackman, as Pershing Square has generated a 31% annualized return over the past five years, roughly double the performance of the S&P 500.
Let’s look at the nine stocks that made up Pershing Square’s portfolio and the big changes Ackman made during the second quarter.
Image source: Getty Images.
1. Hilton: 19%
Pershing holds a long-standing position in Hilton Worldwide Holdings (NYSE: HLT), owning nearly 9 million shares worth nearly $1.9 billion. Ackman took his first position in the hotel chain in late 2018, building that position during the pandemic, trusting that the travel industry would recover. The move was prescient and has been extremely profitable.
Ackman describes Hilton as a “high-quality business … led by an exceptional management team.” In the first half of 2024, Hilton’s revenue grew 11%, while adjusted earnings per share (EPS) jumped 17%. Ackman cited the company’s “excellent cost control and continued best-in-class capital return” as reasons for his bullish view. He also suggested positive industry tailwinds and international growth would fuel sequential acceleration in the third quarter.
To raise funds for new purchases (more on that in a bit), Ackman sold about 228,000 shares of Hilton stock, a decrease of about 2%.
2. Restaurant Brands: 16%
Ackman has a long history of betting…
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