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Bill Ackman buy alert, & Merry Christmas 🎅
Pershing Square purchased $3,600,000 worth of $HHC shares
Bill Ackman, known as the king of activist investing has made a name for himself running Pershing Square through his relentless contrarian style. However, I believe Ackman is a value investor at heart, as he has a focused style of investing: his goal is to maximize its long-term compound annual rate of growth in intrinsic value per share. So when he continues to add Howard Hughs Corp ($HHC), to his consolidated portfolio, I take notice.
After continuing to add to his position since early 2021, Ackman owns approximately 15.9 million shares of the stock with a market value of ~$1.191 billion. He also is now the largest shareholder in the company, owning 31.86% of all shares outstanding. And his activist mantra continues to come through. He has been pushing management to “simplify its business model and positioning it for long-term value creation."
What does the company do?
“Howard Hughes is a real estate development and management company based in Texas. The company owns over 118,000 acres, with over 9 million square feet of office and retail space, as well as over 5,587 residential units. This is spread across a multitude of states from Texas to Maryland, Nevada, New York and even Hawaii. When it comes to its residential units, Howard Hughes owns masterplan communities. In addition, the company owns a series of iconic operating assets such as the Las Vegas BallPark, the Bank of America (NYSE:BAC) Tower in Chicago and the Woodlands Resort in Texas.” - via Yahoo Finance
As we’re all aware, the real estate market has fallen off a cliff, and HHC 0.00%↑ has thus fallen as well. The stock price plummeted from $125 per share in February 2020 to just $40 per share by March 2020. However, Ackman had faith in the company, and it stock price has recovered by approximately 85% since those low levels. YTD it is down 25%.
Why is he buying?
As a Portfolio manager who takes pride in managing a focused portfolio of high-quality stocks and getting hands-on with companies. Ackman’s choice to continue adding to his HHC 0.00%↑ position is a reasonable one. The company’s fixed-rate debt profile means it should be in a solid position despite the rising interest rate environment. They’re trading at under book value while still printing cash. Subscribe to our newsletter and get our in depth research report on HHC 0.00%↑ next week.