Bill Ackman Still Loves Beam, Burger King

by Alyssa Oursler | August 15, 2013 11:42 am

In case you weren’t sick of Bill Ackman already, we have more news from the hedge fund manager: his second-quarter holdings.

Pershing Square Capital Management just filed its 13F regulatory filing, and as should be no surprise, Ackman’s position in JCPenney (JCP[1]) remained steady from the first quarter to the second, which ended June 30. As of the filing, he still held 39 million shares of the struggling retailer — good for title of largest shareholder.

Considering JCP’s brutal slide over the last year or so, though, that’s hardly a title anyone should want. According to the Wall Street Journal[2], Ackman’s stake has lost around half its value so far.

But largest shareholder might not be Ackman’s title for long. In case you missed it, Ackman demanded the resignation[3] of JCPenney CEO Mike Ullman just last week — and the board was anything but happy. Ackman hasn’t just been a “persistent critic,” as The Guardian[4] aptly put it, but also was a huge advocate of the hiring of Ron Johnson[5] — the CEO who arguably pushed JCPenney into the ground.

In the aftermath of the squabble, Ackman stepped down from JCPenney’s board[6] — and it remains to be seen whether his stake will soon dwindle as a result.

Pershing’s position in several other holdings didn’t change in the second quarter, including his positions in Beam Inc. (BEAM[7]), Burger King Worldwide (BKW[8]), Canadian Pacific Railroad (CP[9]) and Howard Hughes (HHC[10]). HHC was the strongest performer during Q2, soaring 34% during that time period.

One company that Ackman is newly bullish on is Air Products & Chemicals (APD[11]) — a manufacturer of specialty gases that boasts year-to-date gains north of 20% and a dividend yielding 2.8%. In his 13F, Ackman disclosed approximately 10 million shares of the company — good for a 5% stake — but has kept buying since then. In late July, he revealed a 9.8% stake that makes him APD’s largest shareholder.

On the other side of the coin, Ackman also dropped his 6 million-share position in Kraft (KRFT[12]) spinoff Mondelez (MDLZ[13]), and dramatically decreased his stake in shipping company Matson (MATX[14]). Pershing had more than 3 million shares at the end of the first quarter, but that dwindled to around 200,000 at the end Q2 — a decrease of more than 93%.

Of course, considering Ackman’s most notable recent calls — his optimism surrounding JCPenney and his short call[15] on Herbalife (HLF[16]) — have been ill-advised to say the least, one might take his sentiment as a contrarian indicator.

Matson has soared around 12% since the end of Q2 — almost three times the broader market — while InvestorPlace contributor Tim Melvin[17], along with distressed investor Wilbur Ross and private equity firms like Blackstone and Apollo, are all fans of the shipping industry.

Other changes in Pershing’s portfolio: Ackman increased his calls on Procter & Gamble (PG[18]) — a jump from contracts covering less than 100,000 shares to more than 24 million — while his normal long position was a third of what it was at the end of Q1. Finally, he pared back his holding of real estate investment trust General Growth Properties (GGP[19]) by 10% or so.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.

  1. JCP:
  2. According to the Wall Street Journal:
  3. demanded the resignation:
  4. The Guardian:
  5. huge advocate of the hiring of Ron Johnson:
  6. stepped down from JCPenney’s board:
  7. BEAM:
  8. BKW:
  9. CP:
  10. HHC:
  11. APD:
  12. KRFT:
  13. MDLZ:
  14. MATX:
  15. short call:
  16. HLF:
  17. InvestorPlace contributor Tim Melvin:
  18. PG:
  19. GGP:

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