Billionaire Investor Bill Ackman Has 100% of His $10 Billion Portfolio in Just 9

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 (HLT 0.89%), 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 on consumer spending, and his confidence in that long-term trend remains intact. Pershing Square holds more than 23 million shares of Restaurant Brands International (QSR -0.65%), in a stake worth $1.6 billion. The company’s portfolio includes a host of well-known brands, including Burger King, Popeye’s, Firehouse Subs, and Tim Hortons. Ackman took his first position in the company in 2012 — when it was still privately held — and increased his holdings during the pandemic.

Ackman points to Restaurant Brands’ “long-term growth potential, trading at a discounted valuation.” Total revenue is up 13% during the first half of 2023, as is EPS. He has previously pointed to Restaurant Brands’ franchised royalty model, which he believes offers “decades” of potential growth.

The billionaire investor increased his stake slightly in Q2, adding 381,000 shares, an increase of about 1.6%.

3. Chipotle: 15%

There was a seismic shift in Ackman’s portfolio during the quarter, and one of the biggest changes was that of Chipotle Mexican Grill (CMG -2.78%). Ackman first took a stake in the fast-casual eatery back in late 2016 after the company experienced a rash of food-borne illnesses that pushed the stock down more than 50%.

In the first quarter, this was by far Pershing’s largest holding, but the billionaire investor sold more than 8 million shares, reducing his position by 23%. That brings his current stake to nearly 29 million shares worth roughly $1.5 billion, representing 15% of the portfolio.

The move might seem surprising, given Chipotle’s performance. In the second quarter, revenue increased 18%, while EPS jumped 32%. The results were driven by same-store-sales that climbed 11%.

So why did Ackman sell? While he didn’t specifically address the move, it likely came down to valuation. Ackman’s preference toward value investing is well documented, and at 58 times sales (at the end of the quarter), he likely felt the price had gotten ahead of itself.

It’s worth noting that Ackman acknowledged the loss of Chipotle CEO Brian Niccol to Starbucks. He went on to suggest Chipotle wouldn’t miss a beat, thanks to the “extraordinary team” Niccol had built.

4. Howard Hughes Holdings: 13%

One position that remained unchanged during the quarter was Howard Hughes Holdings (HHH 0.04%). Pershing still owns nearly 19 million shares worth $1.3 billion and amounting to a 38% stake in the property and land developer. Ackman believes the master-planned communities (MPCs) model will “drive resilient, long-term value creation.”…