"Tracking Bill Ackman’s Pershing Square Portfolio – Q3 2014 Update"
"Ackman’s US long portfolio increased from $12.6B to $13.4B this quarter.Pershing Square’s largest stake is Allergan which is at a whopping ~38% of the US long portfolio.Pershing Square established a large position in Zoetis Inc. this quarter.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 11/14/2014. Please visit our  article for an idea on how his holdings have progressed over the years and our  highlighting the fund’s moves during Q2 2014.Ackman’s US long portfolio increased from $12.6B to $13.4B this quarter largely due to significant price increases in several of his positions. The number of positions increased from 6 to 7: a new position in Zoetis Inc. was established in the quarter. The portfolio remains heavily concentrated with a few huge bets: the top three positions account for close to 80% of the total portfolio value.In their Q2 2014 Investor , 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 debut on Euronext Amsterdam in October. At the time, Bill Ackman  their total capital is at $18B of which around one-third is Pershing Square Holdings.To learn more about Bill Ackman, check-out the book “”.New stakes:Zoetis Inc. (ZTS):  ZTS was a small 1.52% of the US long portfolio position (5.5M shares) established this quarter at prices between $31.79 and $37.20. The stock currently trades at $43.14. On November 12, 2014, Ackman disclosed in a 13D  that his ownership of the business has reached 8.3% (41.82M shares).  The overall cost-basis is around $37.Stake Disposals:None.Stake Increases:Canadian Pacific Railway (CP):  CP is Pershing Square’s second-largest 13F position at 21.54% 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 $205. 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. Last quarter, the position was further reduced by ~19% at prices between $144 and $185. This quarter saw a marginal increase. Ackman is opportunistically harvesting huge long-term gains from this position.Stake Decreases:None.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 $135 and the stake stands at 19.93% of the US long portfolio - it is Ackman’s third-largest position after Allergan and Canadian Pacific Railway. Pershing Square owns 9.8% of the shares outstanding in APD and they are very bullish. 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.Allergan Inc. (AGN):  AGN was a very small 0.88% of the US long portfolio established in Q1 2014 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 $199.Note: Ackman is collaborating with Valeant (VRX) in its effort to buy Allergan in a hostile takeover. It was disclosed in August that SEC is probing Valeant and Ackman’s hostile takeover bid of Allergan. Earlier in that month,  alleging insider trading and other fraudulent practices.  A deal between Actavis plc (ACT) and Allergan is rumored to be announced this week in a bid to fend off Valeant/Ackman.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 $32.29. 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. 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 $25.50 and has so far returned around 71% since the IPO. On October 3, 2014, Pershing Square disclosed in a 13D  that his ownership interest is at 26.1% (42.74M shares). The overall cost-basis is around $14 with the recent stake increase (9.4M shares) at $25.64.Howard Hughes Corp (HHC): HHC is a small 3.99% 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 20% 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 around $380M. In the Ira Sohn conference in August, Ackman said his conservative case values FNMA & FMCC at ~$23 per share each. The stock prices of both these businesses experienced large price drops following a  in early October. Investors had filed around 20 lawsuits against the US government over Fannie/Freddie and the Federal Housing Finance Agency’s actions as conservator. Other Hedge Funds involved include Perry Capital and Fairholme Capital.Ackman also is known to have 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.The spreadsheet below highlights changes to Pershing Square’s US stock holdings in Q3 2014:"