4/3/15

Billionaire investor, Bill Ackman, CEO of Pershing Square Capital Management, has one of the best investing track records in the world.
When you add back fees, Ackman has returned 1,199% since starting his fund in 2004. That compares to 119% in the S&P 500 for the same period. That’s ten times better than the S&P 500.

His short position on Herbalife has been very well documented. In his interview with Bloomberg on Thursday, he said “it will” go to zero, and he confidently said his fund is “very short.” This comes after the stock has halved since July of last year.

A billionaire face-off on Herbalife started early 2013, following a presentation by Ackman at the Ira Sohn investment conference in New York, where he made the case for his Herbalife short. It included the accusation that Herbalife was running a ponzi-scheme. At that time, the stock was trading the mid $30s. Months later, billionaires Dan Loeb and Carl Icahn both took shots at Ackman’s thesis, and took long positions in the stock, attempting to squeeze Ackman. It worked, for a while. The stock ultimately ran up to $81 in January of 2014.

Ackman says they “bought a lot of put options” on that run up, “in the $70s and $80s.” Now HLF shares are trading back in the $30s, and Ackman says it’s a race to the bottom. He thinks the stock will either hit zero or the government will step in before that, and shut them down.

At this point, Ackman’s campaign against Herbalife is looking quite good.

Love him or hate him, Ackman is one of the best performing investors on the planet, and for average investors, his portfolio might be one of the easiest to replicate. We know about his Herbalife position. Here’s a look at the seven publicly reported core holdings of Ackman’s $18+ billion Pershing Square fund, as of its recent SEC disclosures. These are positions where Pershing owns more than 5% of a company:

Allergan AGN NaN% (AGN) – AGN represents 34% of his portfolio. He has a $6 billion stake in the company.

Air Products & Chemicals APD +0.72% (APD) – APD represents 17% of his portfolio. He has a $3.1 billion stake.

Canadian Pacific Rail (CP) – CP represents a 14% of his portfolio. He has a $2.6 billion stake.

Burger King Worldwide, Inc. (BKW) – BKW represents 8.5% of his portfolio. He has a stake worth $1.1 billion.

Platform Specialty Products Corp (PAH) – PAH represents 5% of his portfolio. He has a stake worth about $940 million.

The Howard Hughes Corporation (HHC) – HHC represents 3% of his portfolio. He has a stake of $510 million.

Zoetis Inc. (ZTS) – ZTS is a relatively new addition to his portfolio. According Pershing’s recent 13d filing, it has a stake representing about 10% of the Pershing portfolio, or a position valued at about $1.8 billion.

Ackman’s Pershing Square fund also holds small stakes in Fannie and Freddie Mac, as well as at least two undisclosed small positions. But Ackman has more than 75% of his fund’s money in just four stocks – long positions. That shows extraordinary conviction, and it also means he can’t afford to lose. That conviction and confidence is present only because he has the ability to gain control of, and influence on, the companies he invests in.

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