5 Pershing Square Stocks Trading Below Fair Value

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Platform Specialty Products Corporation (NYSE: PAH) and Howard Hughes Corporation (NYSE: HHC) are among the top stocks that Bill Ackman owns which appear to have the most upside potential based on consensus street estimates. Value investors may want to take a closer look at the names below.


Pershing Square’s 7 Bullish Analyst Targets

Banks and brokerages often release 12 to 18 month price targets for the stocks they cover. Analyst upgrades and downgrades alone can often impact a company’s stock price.

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” – Benjamin Graham

The table below ranks stocks in Pershing Square’s portfolio with most bullish analyst targets:

Pershing Square 7 Bullish Analyst Targets
Ticker Name Upside (Analyst Target) % Of Portfolio
PAH PLATFORM SPECIALTY PRODS COR 25.3% 8.1%
HHC HOWARD HUGHES CORP 22.1% 6.3%
UTX UNITED TECHNOLOGIES CORP 20.3% 5.1%
QSR RESTAURANT BRANDS INTL INC 17.5% 28.6%
MDLZ MONDELEZ INTL INC 17.3% 14.0%

Platform Specialty Products Corporation (NYSE: PAH) appears to be the most undervalued stock in the fund based on the average price target from Wall Street analysts.

Howard Hughes Corporation (The) (NYSE: HHC) appears to be the second most undervalued stock in the portfolio. The company’s upside of 22.1% is very intriguing. With 20.3% margin of safety, United Technologies Corporation (NYSE: UTX) is the third most attractively priced security.


Why Follow Bill Ackman’s Portfolio?

Herbalife (NYSE: HLF). Valeant Pharmaceuticals (NYSE: VRX). Target (NYSE: TGT). These are just a few of the companies that activist investor Bill Ackman has muscled his way into, some of which have left him tattered and others have catapulted him to billionaire status.

When Ackman invests, he places billion-dollar bets on a handful of companies. This Indiana Jones approach has led to some bruising defeats, including a nearly $4 billion loss from a misplaced Valeant position. With rare humility, Ackman apologized to his investors for what he coughed up as a mistake.

One of Ackman’s most infamous bets was his multi-year $1 billion short position on weight loss and nutritional supplements play Herbalife, a position he abandoned amid the rise of the company’s stock despite Ackman’s cries of a pyramid scheme. Although Ackman and Pershing Square have struggled recently, the hedge fund does have a track record of producing strong returns for investors.

The ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed above at the Pershing Square page.

As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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