by winston » Wed May 20, 2015 7:40 am
‘Smart Money’ Stocks: Bill Ackman (Pershing Square Capital Management, LP)
Bill Ackman made quite a splash at this year’s Ira Sohn Conference when he compared Valeant Pharmaceuticals Intl Inc (NYSE:VRX) to a young version of Warren Buffett’s Berkshire Hathaway, calling both “platforms” for investments in other businesses.
Right or wrong, Ackman certainly is one to eat his own cooking. Ackman’s Pershing Square Capital Management initiated a massive position in Valeant in the first quarter. This pharma “platform” now makes up fully 26% of his long portfolio. He’s also enjoyed a fantastic profit in a very short period of time. He bought at an average price of $177 per share, and as of this writing shares traded hands at $227.
Is there any upside left?
Maybe. In Ackman’s Ira Sohn presentation, he suggested the company was worth $250 per share or more. While Ackman is a brilliant investor, I might wait for a pullback before following him into this trade.
Valeant failed last year in its attempt to buy Botox maker Allergan Inc (NYSE:AGN), which was, until this quarter, Ackman’s largest holding. Allergan was instead acquired by Actavis PLC (NYSE:ACT), which coincidentally is a new holding of Ackman’s. Pershing Square initiated a new position in Actavis last quarter, and the stock now makes up about 2.7% of the portfolio.
If there is a theme to Ackman’s investing this year, it is healthcare. More than 40% of his fund is currently dedicated to health and pharmaceutical stocks.
Source: Investor Place
It's all about "how much you made when you were right" & "how little you lost when you were wrong"