Billionaire investor Bill Ackman-led Pershing Square Capital Management L.P. disclosed its latest holdings through a 13F-HR filing on November 15. The hedge funds Q3 portfolio displays Ackman’s continued investment in consumer discretionary companies despite the unfavorable macroeconomic situation. Having said that, Pershing Square has earned an average return of 10.96% since the date of the last filing.
Ackman’s fund currently manages about $7.88 billion in assets, which has grown from $7.46 billion at the end of Q2. Interestingly, Ackman sold the entire 2.06 million shares of Domino’s Pizza (NYSE:DPZ) during Q3.
At the same time, Ackman bought additional shares in the following four companies:
- Canadian Pacific (NYSE:CP) – 12.29 million shares
- Restaurant Brands International (NYSE:QSR) – 371,525 shares
- Lowe’s Companies (NYSE:LOW) – 167,495 shares
- Hilton Worldwide Holdings (NYSE:HLT) – 122,978 shares
Remarkably, American home improvement retailer Lowe’s (LOW) continues to take the #1 spot in Ackman’s funds. With 24.74% of the portfolio, the fund’s LOW holdings value stands at $1.95 billion currently. Let’s take a closer look at two other major consumer discretionary holdings of Pershing Square Management LP.
Chipotle Mexican Grill (NYSE:CMG)
Chipotle Mexican Grill engages in the development and operation of fast-casual, fresh Mexican food restaurants throughout the United States. Despite the weakness in consumer spending, CMG has outpaced earnings expectations seven out of eight times since 2021.
CMG takes the #2 spot in Ackman’s fund with 21.08% of the portfolio. As of today, the fund’s CMG stake stands at $1.66 billion.
Is CMG a Buy?
With 17 Buys and two Hold ratings, CMG stock has a Strong Buy consensus. On TipRanks, the average Chipotle Mexican Grill stock prediction of $1,843.47 implies 23.4% upside potential to current levels. In the past six months, CMG stock has gained 19.2%.
Restaurant Brands International (NYSE:QSR)
Canadian chain of quick service restaurants, Restaurant Brands International, is the holding company of Tim Hortons, Burger King, and Popeyes. QSR has also beaten analysts’ earnings expectations in the last seven quarters.
QSR is the third largest holding of Pershing Square. With 16.33% of the portfolio, the fund holds $1.29 billion worth of QSR stock. Year to date, QSR stock has gained nearly 14%.
Is QSR a Buy or Sell?
On TipRanks, QSR stock has a Moderate Buy consensus rating. This is based on six Buys, seven Holds, and one Sell rating. The average Restaurant Brands International stock forecast of $64.38 implies 3.2% downside potential to current levels.
Ending Thoughts
Bill Ackman’s stock-picking prowess has generated positive returns for investors during the last quarter to date, while a majority of hedge funds are registering losses. Nonetheless, Pershing Square has returned a negative 9.1% year to date as of November 15. Having said that, an investor may choose to follow Ackman’s investment choices to make informed decisions.
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