Bill Ackman Stocks: 7 Top Picks From the Pershing Square Portfolio

  • Bill Ackman stocks could potentially rebound as the consumer discretionary sector gains momentum in the upcoming summer season.
  • Chipotle Mexican Grill (CMG): The recent price decline in CMG stock has improved the traditional price multiples for the Tex-Mex chain.
  • Domino’s Pizza (DPZ): As shares of the pizza chain have lost over a third of their value, investors have a better entry level into DPZ shares.
  • Hilton Worldwide (HLT): Increases in traveling demand mean long-term investment opportunities in hotel shares like HLT stock.
  • Howard Hughes (HHC): Master-planned communities builder is delivering consistent results with its robust business model.
  • Lowe’s (LOW): This dividend aristocrat has lost a quarter of its value and thus offers better prospects for buy-and-hold investors.
  • Netflix (NFLX): The widely-followed streaming giant covers less than half of the target market of broadband households, leaving ample space for top line growth.
  • Restaurant Brands International (QSR): This high-growth fast food restaurant offers significant earnings opportunity for patient investors.
Bill Ackman Stocks - Bill Ackman Stocks: 7 Top Picks From the Pershing Square Portfolio

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Bill Ackman stocks, our topic for today, have had a rough time so far in 2022. In contrast to the double-digit gains between 2019 and 2021, the stocks held by this well-known hedge fund manager have tumbled amid market turbulence.

The activist investor founded the investment adviser firm Pershing Square Capital Management in 2003. Ackmann also runs the FTSE 100-listed Pershing Square Holdings (OTCMKTS:PSHZF), a London, U.K.-listed closed-end equity fund focusing on long-term investments, mostly in North American companies.

According to the latest 13F filings with the U.S. Securities and Exchange Commission (SEC), Pershing Square Capital Management’s first quarter portfolio included 8 holdings that mostly came from the consumer discretionary sector.

Meanwhile, PSHZF stock hit a 52-low on May 9. It is down around 24% year-to-date (YTD). By comparison, the S&P 500 index has lost almost 14%. Yet, despite short-term macroeconomic headwinds, robust stocks in Ackman’s portfolio could potentially start recovering in the weeks ahead.

With that information, here are seven of the best Bill Ackman stocks to buy in June.

CMG Chipotle Mexican Grill, Inc. $1,394.49
DPZ Domino’s Pizza, Inc. $373.98
HLT Hilton Worldwide Holdings Inc. $141.72
HHC The Howard Hughes Corporation $82.26
LOW Lowe’s Companies, Inc. $194.86
NFLX Netflix, Inc. $204.91
QSR Restaurant Brands International Inc. $52.66

Bill Ackman Stocks to Buy: Chipotle Mexican Grill (CMG)

a pedestrian walks past a Chipotle (CMG)
Source: Northfoto / Shutterstock.com

52-week range: $1,230.91 – $1,958.55

Tex-Mex chain Chipotle Mexican Grill (NYSE:CMG) is one of the leading restaurant brands with roughly 3,000 locations stateside. During Covid-19, management was successful in growing to grow both top and bottom lines.

On April 26, Chipotle announced Q1 results. Revenue increased 16% year-over-year (YOY) to $2 billion, compared with 9% sales growth for comparable restaurants. Adjusted diluted earnings per share (EPS) came in at $5.70, a 6.3% increase from $5.36 in the prior-year quarter. Cash and equivalents ended the quarter at $646.7 million.

Restaurant-level operating margin declined 22.3% YOY to 20.7% due to increases in hourly wages and higher food costs. The chain opened 51 restaurants in the first quarter.

Readers may be interested to know that in 2022, the company plans to open 235 to 250 new restaurants. Management is forecasting Q2 comparable restaurant sales growth in the 10% to 12% range.

So far in 2022, CMG stock is down 21% YTD and up 2% in the past 12 months. Shares are trading at 39.5 times forward earnings and 4.7 times sales. Meanwhile, the 12-month median price forecast for CMG stands at $1,875.

Domino’s Pizza (DPZ)

A tall Domino's Pizza (DPZ) sign stands in Eau Claire, Wisconsin.
Source: Ken Wolter / Shutterstock.com

52-week range: $321.15 – $567.57

Domino’s Pizza (NYSE:DPZ) is the largest pizza group worldwide, operating in more than 90 international markets with more than 18,300 stores. In recent weeks, Wall Street has been watching the effects of commodity-linked cost inflation on margins.

Management released Q1 results on Apr. 28. Global retail sales grew by 1.2%, while same-store sales in the U.S. declined 3.6% during the same period. Diluted EPS fell by 16.7% YOY to $2.50. Cash and equivalents ended the quarter at $165 million.

The pizza play reported global net store growth of 213 stores in the first quarter. Management has put the blame for the profit decline on the Omicron surge and rising inflation, while estimating that the headwinds could continue throughout 2022.

DPZ stock has declined almost 35% YTD and 13% over the past year. It currently generates a dividend yield of 1.22%.

Shares are priced at 25.6 times forward earnings and 2.8 times sales. The 12-month price forecast for DPZ is at $400.

Bill Ackman Stocks to Buy: Hilton Worldwide (HLT)

the sign in front of a Hilton (HLT) hotel
Source: josefkubes / Shutterstock.com

52-week range: $114.70 – $167.99

Hilton Worldwide (NYSE:HLT) is one of the world’s largest hospitality firms that operate well-known hotel brands. It boasts more than 6,800 properties worldwide.

On May 3, Hilton reported Q1 results. Revenue grew by 97% YOY to $1.72 billion. Adjusted diluted EPS came in at 71 cents, compared to 2 cents a year ago. Cash and equivalents ended the quarter at $1.51 billion.

The hotel chain added 13,200 rooms to Hilton’s system, contributing to 7,800 net additional rooms, representing 5% YOY net unit growth. Management anticipates maintaining its 5% net unit growth throughout the year.

In 2022, adjusted diluted EPS is expected to come in between $3.77 and $4.02. Analysts would like to see sustained recovery from the pandemic.

HLT stock is down by 10.4% YTD, yet up 10.4% over the past year. The dividend yield stands at a modest 0.43%. Shares are changing hands at 30.5 times forward earnings and 5.5 times sales. The 12-month price forecast for HLT is at $155.

Howard Hughes (HHC)

Group of colleagues discuss something in an office conference room.
Source: GaudiLab / Shutterstock

52-week range: $77.00 – $108.67

Howard Hughes (NYSE:HHC) is a master-planned community (MPC) developer. It builds and operates homes, offices and retail stores in six states and currently has a market capitalization (cap) of $4.2 billion.

The real estate group released Q1 results on May 9. Revenue increased 10% YOY to $210 million. Diluted income per share came in at 4 cents, compared to a $1.20 loss per diluted share a year ago. The company ended the first quarter with $688 million of cash and total debt of $4.7 billion.

Seasoned real estate investors have been keeping a close eye on this MPC developer. Management has built a business model whereby it buys thousands of acres of lands. Then, it develops large or even mega-scale communities and creates value. For instance, the group recently acquired over 35,000 acres of land in Arizona, which has made headlines in real estate circles.

HHC stock is down 20% YTD and 25% over the past year. Shares are trading at 137 times forward earnings and 3.1 times sales. Lastly, the 12-month median price forecast for HHC stock is $126.

Bill Ackman Stocks to Buy: Lowe’s (LOW)

the front of a Lowe's store
Source: Helen89 / Shutterstock.com

52-week range: $179.22 – $263.31

Lowe’s (NYSE:LOW) is a leading retailer, offering home improvement products and services. The company operates more than 1,700 stores in the U.S. and roughly 450 corporate and independent affiliated dealers in Canada. During the pandemic, a large number of individuals spent money to fix or improve their homes, providing tailwinds for LOW stock.

The retailer reported Q1 metrics on May 18. Revenue declined 3% YOY to $23.7 billion, while comparable sales declined 4%. Diluted EPS increased to $3.51, up from $3.21 for the year-ago quarter. Cash and equivalents ended the quarter at $3.4 billion.

In 2022, management forecasts diluted EPS to come in between $13.10 and $13.60. Moreover, the company plans to repurchase $12 billion worth of shares during the fiscal year. Analysts currently debate how top line growth could be affected in the case of a cooling housing market stateside.

LOW stock is down 24.6% YTD, while up 1.5% over the past year. The company generates a dividend yield of 2.19% at present.

Shares are trading at 13.9 times forward earnings and 1.3 times sales. Meanwhile, the 12-month median price forecast for LOWE stands at $243.

Netflix (NFLX)

Netflix (NFLX) logo displayed on a phone which has a keyboard and red background behind it
Source: Pe3k / Shutterstock.com

52-week range: $162.71 – $700.99

Streaming giant Netflix (NASDAQ:NFLX) registered record growth during the lockdown period. However, it is currently suffering from a loss of paid subscribers as life turns back to normal. As a result, investors are concerned.

On April 19, Netflix released Q1 results. Revenue was at $7.87 billion, up 9.8% YOY. Diluted earnings came in at $3.53 per share, compared to $3.75 per share a year ago. Free cash flow (FCF) stood at $802 million. Cash and equivalents ended the period at $6 billion.

Yet, the company lost roughly 200,000 subscribers during the quarter, the first decline in almost a decade. Netflix attributed the downturn to increasing competition as well as high household penetration stateside. Families and friends sharing accounts have also created headwinds.

More than half of broadband households worldwide currently do not have streaming entertainment, implying significant growth opportunities for the company.

NFLX stock has lost over two-thirds of its value since the start of the year. Shares are priced at 17.2 times forward earnings and 2.8 times sales. Meanwhile, the 12-month median price forecast for NFLX is at $300.

Bill Ackman Stocks to Buy: Restaurant Brands International (QSR)

a burger king fast food restaurant
Source: Savvapanf Photo / Shutterstock.com

52-week range: $49.35 – $69.86

Fast-food chain Restaurant Brands International (NYSE:QSR) operates over 28,000 restaurants worldwide. Its brands include Burger King, Popeyes, Tim Hortons and Firehouse Subs. With a market cap of $23.8 billion, it is much smaller than McDonald’s (NYSE:MCD), whose market cap is $184 billion.

The restaurant group announced Q1 metrics on May 3. Revenue increased 14% to $1.45 billion. Adjusted diluted earnings per share stood at 64 cents, up from 55 cents in the prior-year quarter. Cash and equivalents ended the quarter at $895 million.

Management is keen on achieving growth through new restaurant openings and digital selling. During the quarter, digital sales in the U.S. reached their highest levels as a percentage of system-wide sales.

Meanwhile, the company saw a record number of first-quarter restaurant openings. Investors noted that global expansion was on track and profit margins were high.

Yet, analysts have been debating whether Restaurant Brands International can continue to grow the top line in the second half of the year. Cost management can be tricky in the current inflationary environment.

So far in 2022, QSR stock is down 13.2%. It has plunged 25.2% over the past year. At present, the stock generates a hefty dividend yield of 4.11%.

Shares are trading at 13.3 times forward earnings and four times sales. Finally, the 12-month median price forecast for QSR stands at $62.

On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.


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