"Tracking Bill Ackman’s Pershing Square Portfolio – Q4 2014 Update"
"Ackman’s US long portfolio increased ~20% from $13.43B to $16.04B this quarter.Pershing Square’s largest stake is Allergan which is at a whopping ~35% of the US long portfolio.Pershing Square significantly increased 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 02/17/2015. Please visit our  article for an idea on how his holdings have progressed over the years and our  highlighting the fund’s moves during Q3 2014.Ackman’s US long portfolio increased 19.49% from $13.43B to $16.04B this quarter. The number of positions remained steady at 7. The portfolio remains heavily concentrated with a few huge bets. The top three positions account for just over 70% of the total portfolio value: Allergan Inc. (35.30%), Air Products & Chemicals (18.47%), and Canadian Pacific Railway (16.74%).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. At the time, Ackman said 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:None.Stake Disposals:None.Stake Increases:Zoetis Inc. (ZTS):  ZTS was a small 1.52% of the US long portfolio position (5.5M shares) established last quarter at prices between $31.79 and $37.20. This quarter saw a whopping 650% stake increase. The overall cost-basis is around $37. Ackman controls 8.3% of the business. The stock currently trades at $45.65.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 PAH investor prior to its NYSE IPO: 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. The stock currently trades at $24.39 and has returned almost 70% since the IPO. This quarter saw a ~28% stake increase at prices between $20.97 and $27.74. The overall cost-basis is around $14 with the recent stake increase (9.4M shares) at $25.64.Stake Decreases:Allergan Inc. (AGN):  AGN was a very small 0.88% of the US long portfolio stake established in Q1 2014 at prices between $110 and $132. On 04/21/2014, Ackman disclosed a huge 9.7% ownership in the business. It is currently his largest holding at 35.30% of the US long portfolio. The average-cost-basis is in the low $120s. This quarter saw a 7.77% stake reduction at prices between $177 and $214. The stock currently trades at $231.Note: In early 2014, Ackman collaborated with Valeant (VRX) in its effort to buy Allergan in a hostile takeover. That effort failed, but in November 17, 2014 Actavis plc (ACT) agreed to buy AGN for $219 per share in a cash-and-stock deal ($129.22 cash and 0.3683 Actavis stock for each share held). In December 2014, an Allergan shareholder sued Bill Ackman alleging insider trading.Restaurant Brands International (QSR) previously Burger King Worldwide (BKW): QSR is a ~9.25% of the US long portfolio stake. Tim Hortons and Burger King Worldwide merged and then renamed the entity as Restaurant Brands International. Pershing Square had a huge investment in BKW and those shares got exchanged for QSR shares. The original BKW stake 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. This quarter saw a very minor reduction. The stock currently trades at $41.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 $156 and the stake stands at 18.47% 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. 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.Howard Hughes Corp (HHC): HHC is a small 2.90% 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 and has returned ~21% since. Ackman called HHC one of the best kept secrets on Wall Street at the Harbor Investor Conference in February 2013.Canadian Pacific Railway (CP):  CP is Pershing Square’s third-largest 13F position at 16.74% 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 $190. Ackman reigned in management and board changes at the company by winning a proxy battle in May 2012. The position was reduced by ~26% in Q4 2013 at prices between $123 and $157. Q2 2014 also saw a ~19% reduction at prices between $144 and $185. Ackman is opportunistically harvesting huge long-term gains from this position.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 $539M. In the Ira Sohn conference in August 2014, 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 2014. 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 Q4 2014:"