"Tracking Bill Ackman’s Pershing Square Portfolio – Q3 2015 Update"
"Ackman’s US long portfolio decreased from $14.45B to $13.95B this quarter.Pershing Square’s largest 13F stake is Valeant Pharmaceuticals at ~25% of the US long portfolio.The largest three 13F positions are Valeant Pharmaceuticals, Air Products & Chemicals, and Canadian Pacific Railway and together they account for ~58% 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 11/16/2015. Please visit our  article for an idea on how his holdings have progressed over the years and our  highlighting the fund’s moves during Q2 2015.Ackman’s US long portfolio decreased 3.43% from $14.45B to $13.95B this quarter. The number of positions increased from 7 to 8. The portfolio remains heavily concentrated with a few huge bets. The top three positions account for 58.04% of the total portfolio value: Valeant Pharmaceuticals (24.90%), Air Products & Chemicals (18.79%), and Canadian Pacific Railway (14.35%).In Q2 2014, Pershing Square unveiled plans to do an Initial Public Offering (IPO) as a means to increase the amount of capital that is permanent. Pershing Square Holdings (PSHZF) debut on Euronext Amsterdam in October 2014 (the US OTC listing is not very liquid). At the time, Ackman said their total capital is $18B of which around one-third is Pershing Square Holdings.  Pershing Square’s performance of their first fund since inception (2004) is stunning at over ~20% per annum. 2014 was a blockbuster year with a 40% return while in 2015 they are down 12.6% YTD.To learn more about Bill Ackman, check-out the book “”.New Stakes:Mondelez International (MDLZ): MDLZ is a large 13.02% (43.37M shares) of the 13F portfolio stake established this quarter at a cost-basis in the low-40s. Beneficial ownership including forward purchase contracts and call options (2017 March thru August maturity/expiry) are at 120.27M shares. That implies a net exposure of $5.04B as of 9/30/2015, the largest position by far. The stock currently trades at $43.95.Note: Pershing Square’s ownership stake in MDLZ is ~7.5%.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. By Q4 2013, the position was more than doubled at prices between $91 and $107. It has since been kept steady. The stock currently trades at $139 and the stake stands at 18.79% of the US long portfolio - it is Ackman’s second-largest 13F position after Valeant.Note: Pershing Square’s ownership stake in APD is ~10%. It is an activist stake - the  and three new board members were appointed in June 2014.Canadian Pacific Railway (CP):  CP is Pershing Square’s third-largest 13F position at 14.35% 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 $149. The original position was reduced by ~26% in Q4 2013 at prices between $123 and $157 and ~19% in Q2 2014 at prices between $144 and $185. Ackman is opportunistically harvesting huge long-term gains from this position.Note 1: CP is a ~9% of the business activist stake. Ackman won a proxy battle in May 2012 and brought management and board changes.Note 2: Last week, CP offered ~$126 per share (50% cash) to acquire CSX Corporation (CSX) - an approach was made last year as well.Howard Hughes Corp (HHC): HHC is a small 2.93% 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 returned ~63% in 2013 but hasn’t budged since. It currently trades at $125.Note 1: A regulatory  on July 2, 2015 showed Ackman’s ownership at ~5.5M shares (13.2% of business) compared to ~3.6M shares in the 13F: that filing included ~1.92M in warrants.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 ~28% stake increase at prices between $20.97 and $27.74. Ackman’s cost-basis is around $14. The stock currently trades well below that at $11.84. Ackman controls ~20% of the business.Note 1: The stock is down ~50% YTD and the company has seen significant churn in upper management: CEO Dan Leever (~30 years at MacDermid) announced his retirement and there were several other resignations and role changes in the last few months.Note 2: Ackman had invested in Platform Acquisition Holdings, an investment vehicle incorporated in the London Exchange (since renamed Platforms Specialty Products). 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 in Q4 2013. The NYSE IPO followed and the London listing was cancelled.Restaurant Brands International (QSR) previously Burger King Worldwide: QSR is a 9.79% of the US long portfolio stake. Tim Hortons and Burger King Worldwide merged and renamed the resultant entity as Restaurant Brands International. Pershing Square had a huge investment in Burger King and those shares got exchanged for QSR shares. The original Burger King stake was established in Q3 2012 at prices between $13.03 and $15.88. The stock currently trades at $37.42.Valeant Pharmaceuticals (VRX): VRX is Ackman’s largest position at 24.90% of the US long portfolio. The stake was established in Q1 2015 at prices between $143 and $205. The stock currently trades well below that range at $90.85.Note: In early 2014, Ackman collaborated with Valeant (VRX) in its effort to buy Allergan in a hostile takeover - Ackman held a huge stake in Allergan and stood to profit immensely. That effort failed but Pershing Square still generated huge profits from the investment: in March 2015, Actavis plc acquired Allergan (AGN) for a large premium.Zoetis Inc. (ZTS):  ZTS was a small 1.52% of the US long portfolio position (5.5M shares) established in Q3 2014 at prices between $31.79 and $37.20. Q4 2014 saw a whopping 650% stake increase at prices between $35 and $45. The overall cost-basis is around $37. Ackman controls 8.3% of the business and the stake is now at 12.35% of the US long portfolio. The stock currently trades at $47.32.Note 1: 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 holds just under 10% of the outstanding shares of both these businesses - 115.57M shares of FNMA at a cost-basis of ~$2.30 and 63.5M shares of FMCC at a cost-basis of ~$2.14. The combined investment outlay was ~$400M. FNMA & FMCC currently trade at $2.31 and $2.20 respectively. In the Ira Sohn conference in August 2014, Ackman said his conservative case values FNMA & FMCC at ~$23 per share each. Other Hedge Funds involved include Perry Capital and Fairholme Capital.Note 2: Ackman has large short positions although Herbalife (HLF) 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.Note 3: In June, Pershing Square revealed a ~22% ownership stake in London listed SPAC Nomad Holdings (NOMHF) at a cost of ~$350M.The spreadsheet below highlights changes to Pershing Square’s US stock holdings in Q3 2015:"