A Table-Pounding Buy When I told you about this trade on March 31, I said Pershing Square Holdings, then trading at just under $18, was a table-pounding buy. Shares now trade at $27.05, an increase of exactly 50% in six months. And despite that 50% increase, I believe Pershing Square Holdings is still a buy... Pershing Square holds a portfolio of blue chip stocks and cash that together are worth $39.26 per share. Yet today in the stock market, we can buy shares of Pershing Square for $27.05 - a 31% discount. The stocks in Pershing Square Holdings' portfolio today include Agilent (NYSE: A), Hilton (NYSE: HLT), Lowe's (NYSE: LOW), Restaurant Brands (NYSE: QSR), Chipotle Mexican Grill (NYSE: CMG) and Starbucks (Nasdaq: SBUX). All good companies - and since Ackman picked those stocks, I'm betting they will perform pretty well in the years ahead. So why does Pershing Square trade at such a discount? It likely relates to the fact that Pershing Square Holdings' primary stock market listings are in Amsterdam and London, not in the United States. Getting Pershing Square Holdings at less than $0.70 on the dollar is a no-brainer. It sweetens the deal that you also get exposure to Bill Ackman's investing ability, which has thrashed the overall stock market over time. From January 1, 2004, through the end of August of this year, Ackman generated a total cumulative return of 1,112% for his investors. That is more than triple the 335% return that the S&P 500 produced over the same time period. The 31% discount and Ackman's long-term track record still make Pershing Square a solid bet. Good investing, Jody P.S. It's clear that COVID-19 has created a unique market environment with as much opportunity for profit as it has for disaster - and not just for investing greats like Bill Ackman. In fact, Chief Income Strategist Marc Lichtenfeld believes that you could even triple your investment in three months by trading one unique catalyst... Click here to learn more. |
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