"Tracking Bill Ackman’s Pershing Square Portfolio – Q1 2017 Update"
"Ackman’s US long portfolio increased from $5.91B to $5.96B this quarter.Pershing Square dropped Valeant while decreasing Air Products & Chemicals and Mondelez International during the quarter.The largest three 13F positions are Restaurant Brands International, Chipotle Mexican Grill, and Mondelez International and together they account for ~73% of the portfolio.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 05/15/2017. Please visit our  article for an idea on how his holdings have progressed over the years and our  for the fund’s moves during Q4 2016.Ackman’s US long portfolio increased marginally from $5.91B to $5.96B this quarter. The number of positions decreased from 8 to 7. The portfolio remains heavily concentrated with a few huge bets. The top three positions account for 72.57% of the total portfolio value: Restaurant Brands International, Chipotle Mexican Grill, and Mondelez International.In addition to partner stakes, the fund also invests the capital from Pershing Square Holdings (PSHZF), a public entity that debut in Euronext Amsterdam in October 2014. This was set up primarily to increase the amount of capital invested that is permanent. Pershing Square Holdings has widely underperformed the S&P 500 since its EOY 2012 inception: 7.1% since inception net-of-fees vs 84% for the S&P 500. Their original flagship fund’s (2004 inception) track record is outstanding with returns of ~20% per annum.To learn more about Bill Ackman, check-out the book “”.Stake Disposals:Valeant Pharmaceuticals (VRX): VRX was Ackman’s largest position at ~25% of the US long portfolio as of Q3 2015. The following quarter saw a ~15% reduction while there was a ~30% increase in Q1 2016. The stake was established in Q1 2015 at a cost-basis of $196. Last quarter saw a ~16% reduction at $14.85 and the disposal this quarter happened at ~$11. The stock currently trades at $14.17. Pershing Square realized huge losses.Stake Decreases:Mondelez International (MDLZ): MDLZ is a large (top three) 14.41% of the 13F portfolio stake established in Q3 2015 at a cost-basis of ~$39. Q1 2016 saw a ~47% reduction at prices between $36.50 and $45. This quarter saw another ~13% trimming. The stock currently trades at $45.81.Note: Pershing Square also has a huge position in MDLZ American style call options. Including that, the ownership stake is at 6.3% of the business (96.3M shares).Air Products & Chemicals (APD): In Q2 2013, a new ~8% of the US long portfolio APD stake was purchased at prices between $80 and $84. By Q4 2013, the position was more than doubled at prices between $78.50 and $94.50. It had since been kept steady. Q1 2016 saw a ~63% stake reduction at prices between $103 and $133. Q3 2016 saw another ~47% selling at prices between $126 and $145. That was followed with another ~41% selling this quarter at prices between $135 and $149. The stock currently trades at ~$145 and the stake stands at 5.18% of the US long portfolio. Pershing Square is realizing long-term gains.Note 1: Pershing Square’s cost basis on APD is ~$82.50.Note 2: The prices quoted above are adjusted for the spinoff of Versum Materials (VSM) that closed in October 2016. The terms called for APD shareholders to receive one share of Versum Materials for every two shares held.Kept Steady:Restaurant Brands International (QSR): QSR is currently the largest 13F position at ~37% of the US long portfolio. Pershing Square controls ~17% of QSR and their cost-basis is ~$16. The stock currently trades at $59.60.Note: Restaurant Brands International came about through the merger of Tim Hortons and Burger King Worldwide. Pershing Square had a huge investment in Burger King and those shares got exchanged for QSR shares.Chipotle Mexican Grill (CMG): CMG is a large (top-three) ~22% of the portfolio stake established in Q3 2016 at a cost-basis of ~$405 per share. The stock currently trades at $495.Note: Ackman controls ~10% of CMG.Platform Specialty Products (PAH): On 01/23/2014, Ackman disclosed a huge new stake in Platform Specialty Products Corporation (PAH) in a 13G filing. Pershing Square was a PAH investor prior to its NYSE IPO. Q4 2014 saw a ~30% stake increase at prices between $21 and $28. Ackman’s cost-basis is around $14. The stock currently trades at $13.66. Last quarter saw a ~5% trimming at $8.78. Ackman controls ~20% of the business.Note: The stock was down ~45% in 2015, was flat in 2016, and has returned ~40% YTD.Howard Hughes Corp (HHC): HHC is a ~7% of the US long portfolio position that was established in 2010 as a result of its spin-off from General Growth Properties (GGP). The stake has remained untouched during the whole period. The stock has returned over 3x since the spinoff.Note 1: Ackman  at the Ira Sohn conference earlier this month - the thesis was focused around how Master Planned Communities (MPC) when developed patiently over a long period of time could create substantial value to shareholders.Note 2: Ackman’s ownership is at ~5.48M shares (13.2% of business) compared to ~3.6M shares in the 13F: ~1.92M shares in currently exercisable warrants are not included in the 13F filing.Nomad Foods Ltd. (NOMD): In June 2015, Pershing Square revealed a ~22% ownership stake in London listed SPAC Nomad Holdings at a cost of ~$350M. After a couple of acquisitions (Iglo Group & Findus Group) in 2015, the business moved its listing from London Stock Exchange to New York Stock Exchange in January 2016. Pershing Square controls ~19% (33.33M shares) of the company. The stock currently trades at $12.81.Fannie Mae (FNMA) and Freddie Mac (FMCC) are other US 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 held just under 10% of the outstanding shares of both these businesses - 115.57M shares of FNMA at a cost-basis of $2.29 and 63.5M shares of FMCC at a cost-basis of $2.14. The combined investment outlay was ~$400M. FNMA & FMCC currently trade at $2.77 and $2.66 per share respectively.Bill Ackman also has a short book. Herbalife (HLF) with a capital allocation of 9% is the only one that is publicly known. There is no regulatory requirement to disclose short positions and so only ones that Ackman voluntarily discloses are known.The spreadsheet below highlights changes to Pershing Square’s US stock holdings in Q1 2017:Regulatory Filings thru 2/16/2017: 13D/A 2/13/2017 - VRX - 27.2M shares - 7.8%. 13G/A 2/10/2017 - QSR - 39.5M shares - 16.9%. 13D/A - 2/7/2017 - CMG - 2.9M shares - 10%. 13D/A 1/30/2017 - MDLZ - 99.3M shares - 6.4%. Form 4 12/13/2016 - VRX - 3.5M shares disposed at $14.85.1/27/2017 - : MDLZ (16% of capital)- disclosed his first purchases happened in Q1 2015 at $36.38 and that thru 1/20/2017($45.20 close), the price including dividends has increased 18%. That puts his overall cost-basis at ~$39 per share. APD (13% of capital) - 76% increase from average cost from July 2013 announcement thru Jan 20, 2017. QSR (17% of capital) - 3.14x increase from average cost since June 2012 Justice merger. HHC (10% of capital):2.9x increase since GGP spinoff in November 2010. CMG (11% of capital):   Fannie/Freddie (9% of capital) - Says average cost at announcement in October 2013 was $2.29 for Fannie & $2.14 for Freddie. Herbalife Short (9% of capital). PAH (4% of capital). Valeant (3% of capital) - average cost $196 at announcement date of 2/9/2015. Nomad Foods (3% of capital)."