Why Bill Ackman's Pershing Square's Top 4 Holdings Are Consumer Stocks
Portfolio Pulse from Surbhi Jain
Bill Ackman's Pershing Square Capital, with $10.5 billion AUM, is heavily invested in consumer discretionary stocks, making up over 60% of its portfolio. Ackman believes in investing in companies with pricing power, especially in the current climate of high inflation and interest rates. Pershing Square's top holdings include Chipotle Mexican Grill (CMG), Restaurant Brands International (QSR), Hilton Worldwide Holdings (HLT), and Lowe's Companies (LOW), all of which have demonstrated the ability to raise prices without significantly affecting sales.
November 17, 2023 | 1:27 pm
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POSITIVE IMPACT
Chipotle has been successfully raising menu prices without affecting sales, demonstrating strong pricing power.
Chipotle's ability to raise prices while maintaining sales growth is a positive indicator of its pricing power and resilience to inflation, which is likely to be viewed favorably by investors.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
Hilton benefits from increased U.S. consumer spending and travel demand, demonstrating significant pricing power.
Hilton's increased profit forecasts and ability to capitalize on pent-up travel demand suggest strong pricing power, which is likely to positively impact investor sentiment.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
Lowe's is recognized for strong brand awareness and the ability to increase average spending and ticket size, indicating pricing power.
Lowe's strong brand awareness and the ability to increase consumer spending are key factors that could lead to increased revenue and a positive short-term impact on the stock price.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 85
POSITIVE IMPACT
Restaurant Brands benefits from pricing power due to a revenue model heavily reliant on rents and royalties from franchises.
With 57% of its revenue coming from franchise rents and royalties, Restaurant Brands is insulated from cost inflation, which could lead to a positive perception among investors.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 85