Bill Ackman's Largest Position

I have recently done a ton of work on Bill Ackman’s largest stock position and the stock looks dead cheap.

• The stock has collapsed from a high of $125 per share to currently $77 per share.

• The reason for the drop is from higher interest rates impacting cap rates on their income producing properties.

• However, the underlying value of their real estate has continued to appreciate and as inflation increases the value will only continue to increase.

• Net operating income at their income producing properties remains strong and covers all corporate and interest payments while land sales are reinvested back into the business.

• Bill Ackman has been buying aggressively in the open market and there are rumors he will buy out the entire company.

• The company is also aggressively repurchasing shares.

The company has significant owned assets that will appreciate significantly in an inflationary environment. Debt is mostly fixed and nonrecourse to the corporation. In addition, the company is trading well below NAV, giving investors a significant margin of safety.

Finally, with the Central Bank of Poland cutting interest rates, along with Canada halting rate hikes, any movement in global interest rates lower will act as a catalyst and send the stock price much higher. Lower interest rates will mean cap rates will fall and the NOI that the income producing properties generate will only increase in value.

This is a very interesting name with a ton of margin of safety.

Oh and did I mention, there are rumors that Bill Ackman might make a bid for the entire company?

Let’s dig in…