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His 13F filings show one big new position.
It’s this time of year that 13F filings of hedge fund gurus and other big-time investors are made public, based on trades made in the fourth quarter of last year. They come out 60 days after the end of the quarter, so that the influential purchases of these institutional investment managers don’t move the markets too much.
While not every hedge fund manager has stellar track records, and many have seen investments blow up in spectacular fashion, it’s worth examining some of their choices. You can often find really good investment ideas, stocks that may be very undervalued or stocks to short.
Bill Ackman is one of the most controversial managers out there. He is always worth listening to, even when he gets it wrong. He was the guy who saw what was happening in the housing markets and tried to warn authorities, but nobody listened.
Ackman opened one new position in the fourth quarter. He purchased a whopping 38 million shares, or 11%, in Restaurant Brands International (NYSE:QSR). That may not sound exciting, except this is the new name for the combination of Burger King and Tim Horton’s. Burger King has been undergoing a staggeringly successful turnaround under a new, youthful CEO. It then purchased Canada’s favorite chain in Horton’s, and now Ackman appears convinced there is more upside.
I think Restaurant Brands is well worth considering as a purchase.
Ackman added a huge position to his stake in Zoetis Inc. (NYUSE: ZTS), bringing his position to 8.3% of the company, which spun off from Pfizer (NYSE: PFE) two years ago. Zoetis develops and manufactures animal health medicines across the world, including anti-infectives, vaccines and pain medications.
It’s a solid business with good cash flow, but isn’t growing as quickly as Ackman would like. He is looking to grab some board seats and cut costs, and he thinks there is room for a merger down the road. The stock is up about 40% since it went public, and because of its highly specialized nature, Ackman thinks it could fetch a high price in a merger.
Platform Specialty Products Corporation (NYSE: PAH) was another add this quarter, increasing Ackman’s stake to 26% of the company. This is a specialty chemical and printing product company. It’s an odd beast, but like Zoetis, is highly specialized in what it does. It also was born out of a reverse shell merger.
It has a strong balance sheet and bought out Arysta LifeScience last year, in a move pushed by Ackman. I can’t say this is a buy, mostly because there are a lot of moving parts and the financials are tough to read.
The one reduction is in a stock that turned out to be a big winner for Ackman, Allergan Inc. (NYSE: AGN). He bought a huge stake in the maker of Botox, originally to try and get it sold to Valeant Pharmaceuticals (NYSE: VRX). Instead, the company agreed to a $219 per share buyout by Actavis plc (NYSE: ACT).
Ackman can’t be crying too much since it resulted in a $2.1 billion profit on the position, which he is now slowly unwinding.
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