"Tracking Bill Ackman’s Pershing Square Portfolio – Q2 2014 Update"
"Ackman’s US long portfolio increased from $8.38B to $12.6B this quarter.Pershing Square’s largest stake is Allergan which was increased to a whopping ~39% of the US long portfolio position this quarter.Pershing Square sold out of Beam Suntory and substantially decreased Canadian Pacific Railway.This article is part of a series that provides an ongoing analysis of the changes made to Pershing Square’s US long portfolio on a quarterly basis. It is based on Ackman’s regulatory  filed on 08/13/2014. Please visit our  article for an idea on how his holdings have progressed over the years and our  highlighting the fund’s moves during Q1 2014.Ackman’s US long portfolio increased from $8.38B to $12.6B this quarter largely due to a huge stake increase in Allergan Inc. The number of positions decreased from 9 to 6: the 11.60% position in Beam Suntory along with very small positions in Apartment Investment & Management Company and Home Properties Inc. were eliminated this quarter and no new positions were added. The portfolio remains heavily concentrated with a few huge bets: the top three positions account for close to 80% of the total portfolio value.To learn more about Bill Ackman, check-out the book “”.New stakes:None.Stake Disposals:Beam Suntory (BEAM):  BEAM is a spin-off from Fortune Brands. Ackman acquired a stake in Fortune Brands in 2010 and his cost-basis is well below the spin-off price of $47. On 01/14/2014, Suntory Holdings of Japan announced the acquisition of BEAM at $83.50 cash-per-share. Soon after, Ackman disclosed that one-third of his position was sold at a price-per-share of around $83. This quarter, the remaining position was eliminated. Ackman harvested large long-term gains from this position.Apartment Investment & Management Co. (AIV) & Home Properties Inc. (HME):  AIV & HME were small 1.35% & 0.34% of the US long portfolio positions respectively established last quarter. The AIV stake was acquired at prices between $25.72 and $31.09 and it was eliminated this quarter at prices between $29 and $32.50. The HME stake was purchased at prices between $53.62 and $61.39 and it was eliminated this quarter at prices between $59 and $64. The quick about-turn on these two positions was probably to raise cash for the Allergan bid.Stake Increases:Allergan Inc. (AGN):  AGN was a very small 0.88% of the US long portfolio established last quarter at prices between $110 and $132. On 04/21/2014, Ackman disclosed a 9.7% ownership in the business, primarily through call options that expire in March/April 2015. The position has since been converted to a long stake and the overall cost-basis is in the low $120s. The stock currently trades at $157.Note: Ackman is collaborating with Valeant (VRX) in its effort to buy Allergan in a hostile takeover. It was disclosed yesterday that SEC is probing Valeant and Ackman’s hostile takeover bid of Allergan. Earlier in the month,  alleging insider trading and other fraudulent practices.Stake Decreases:Canadian Pacific Railway (CP):  CP is Pershing Square’s third-largest 13F position at 20.04% of the US long portfolio. The stake was established in Q3 2011 with the bulk purchased in Q4 2011 at prices between $46.05 and $71.82. The stock currently trades at around $192. Ackman reigned in management and board changes at the company by winning a proxy battle in May 2012. The position was marginally reduced in Q3 2013 at prices between $117 and $130 and by ~26% in Q4 2013 at prices between $123 and $157. This quarter, the position was further reduced by ~19% at prices between $144 and $185. Ackman is harvesting huge long-term gains from this position.Kept Steady:Air Products & Chemicals (APD): In Q2 2013, a new 8.44% of the US long portfolio APD stake was purchased at prices between $92.80 and $96.59. The position was since more than doubled at prices between $91 and $107 by Q4 2013. It has since been kept steady. The stock currently trades at around $132 and the stake stands at 20.98% of the US long portfolio - it is Ackman’s second-largest position after Allergan. Pershing Square owns 9.8% of the shares outstanding in APD and they are very bullish - Ackman recently commented that APD should trade upwards of $200 within the next three years. It is an activist stake and Ackman has enjoyed some success on that front - the  and three new board members were appointed in June 2014.Burger King Worldwide (BKW): BKW is an 8.29% of the US long portfolio stake that was established in Q3 2012 at prices between $13.03 and $15.88. The position was increased marginally in Q1 2013 at prices between $16.31 and $19.95. The stock currently trades at $26.45. Ackman’s investment in Burger King Worldwide (BKW) started with a transaction to acquire 29% of the company for $1.4B in April 2012. The acquisition was done through Justice Holdings, a British company controlled by Ackman. That stake is not reported in the 13F filings as Justice Holdings is a UK listed investment vehicle - it is not a 13F security.Platform Specialty Products (PAH): On 01/23/2014, Ackman disclosed a huge new stake in Platform Specialty Products Corporation (PAH) in a 13G filing. It is currently valued at around $934M and Ackman controls 30.9% of the shares outstanding. PAH had an IPO and the transaction was similar to the Burger King Worldwide IPO - Prior to the NYSE listing, Platform Specialty Products (Platform Acquisition Holdings at that time) was incorporated in the London Exchange as an investment vehicle and they acquired MacDermid (a US listed business that was taken private for ~$1.3B in an MBO transaction in 2007) in a $1.8B deal. Ackman participated in the process as a Platform Acquisition Holdings investor. The stock currently trades at $26.35 and has so far returned around 77% since the IPO.Howard Hughes Corp (HHC): HHC is a small 4.47% of the US long portfolio position that was established in 2010 as a result of its spin-off from GGP. The stake has remained untouched during the whole period. The stock returned ~63% in 2013 and has returned another ~34% so far this year. Ackman called HHC one of the best kept secrets on Wall Street at the Harbor Investor Conference in February 2013.Fannie Mae (FNMA) and Freddie Mac (FMCC) are other large long positions in the partnership - the holdings were disclosed in 13D filings on November 15, 2013 - as they are not , they are not listed in the 13F report. Ackman holds just under 10% of the outstanding shares of both these businesses - 115.57M shares of FNMA at an average cost-basis of ~$2.30 and 63.5M shares of FMCC at an average cost-basis of $2.14. The combined investment outlay was ~$400M and it is currently valued at over $720M. In the Ira Sohn conference earlier this month, Ackman said his conservative case values FNMA & FMCC at ~$23 per share each. The stocks currently trade in the $4 area. Other super-investors betting on Fannie & Freddie include Carl Icahn and Bruce Berkowitz.Ackman also is known to have large short positions, although Herbalife is the only one publicly known - there is no regulatory requirement to disclose short positions and so only the ones that Ackman voluntarily discloses are known.The spreadsheet below highlights changes to Pershing Square’s US stock holdings in Q2 2014:"