Billionaire Bill Ackman has 37% of his FTSE 100-listed fund in these 2 superb stocks

Pershing Square shares are up 196% in five years. Ben McPoland looks at two top holdings that have been powering this FTSE 100 fund higher.

| More on:
The flag of the United States of America flying in front of the Capitol building

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Billionaire investor William ‘Bill’ Ackman manages the hedge fund Pershing Square Capital Management. Though based in New York, this fund is accessible to UK investors via Pershing Square Holdings (LSE: PSH), which is an investment trust in the FTSE 100.

Incredibly, Ackman has more than doubled the total return of the S&P 500 over the last five years. And the Pershing Square share price has rocketed almost 200% during this time.

This makes it the best-performing Footsie stock of the last half decade (just ahead of Ashtead and Frasers).

Many hedge fund managers run incredibly concentrated portfolios and Ackman is no different. As of December, he had 37% of his $10bn+ portfolio split between just two companies.

These were Alphabet (NASDAQ: GOOG)(NASDAQ:GOOGL), accounting for nearly 19% of his invested assets, and Chipotle Mexican Grill (NYSE: CMG), which made up just over 18%.

Here’s why Ackman owns this excellent pair of stocks.


Alphabet owns Google, which has a monopolistic 91% share of global internet search. It’s also the parent of YouTube, Google Cloud, and self-driving firm Waymo.

Last year, the tech behemoth made $73.8bn in net profit from $307bn in revenue. This makes it one of the most profitable businesses the world has ever seen.

However, that didn’t stop investors from dumping the stock early last year over fears that Google’s search dominance was under threat from ChatGPT and generative artificial intelligence (AI).

Ackman didn’t agree and started scooping up shares. That move has worked out well, with his position up more than 50% since. He said Google “will be a dominant player in AI for the very, very long term”.

While I agree with that statement due to the firm’s mind-boggling amounts of data, there are potential risks here. Google has released Gemini, its own AI chatbot, which has made some very public mishaps.

Moreover, it is far costlier and less profitable for Gemini to generate an answer than traditional search. That’s why Google is reportedly considering putting some of its core AI products behind a paywall.

Despite these risks, Wall Street still sees the firm growing its top line by 10% over the next few years. And the stock’s valuation looks reasonable at 23 times this year’s forecast earnings.

That’s cheaper than all the other ‘Magnificent Seven’ members: Apple (25.7), Amazon (43.1), Meta (25.5), Microsoft (36), Nvidia (34.8), and Tesla (55.1).

Therefore, Alphabet shares could be worthy of consideration for a portfolio (I invested in early 2023).


Similar to Alphabet, Ackman first invested in shares of Chipotle back in 2016 when they were going through a rough patch. This followed food poisoning outbreaks at some of its restaurants in 2015.

The stock has been a monster winner since then, proving that Ackman has a real knack for spying lucrative opportunities.

Chipotle’s organically grown produce and rejection of preservatives or artificial flavours (and freezers and microwaves) has resonated with customers, separating it from the competition. As a result, earnings growth has been strong for years.

Unfortunately, that growth comes with a hefty price tag today. At $2,965, the stock is trading at 66 times earnings. I wouldn’t invest at that price.

However, I’m happy to hold Pershing Square shares, and expect Ackman to sniff out more such bargains in future.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Ben McPoland has positions in Alphabet, Ashtead Group Plc, Pershing Square, and Tesla. The Motley Fool UK has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Photo of a man going through financial problems
Investing Articles

Down 15% in a week! What’s gone wrong with the National Grid share price?

The National Grid share price isn't supposed to crash but now it has. Harvey Jones is wondering whether to take…

Read more »

Group of young friends toasting each other with beers in a pub
Investing Articles

Taylor Wimpey just paid me £158.78. I’m aiming to turn that into a £100k yearly second income

Harvey Jones says small, regular dividend payments can turn a few pounds into a mighty second income, if he gives…

Read more »

A pastel colored growing graph with rising rocket.
Value Shares

These FTSE 250 shares are tipped to rise 14% to 18% in the next year!

Looking for the best FTSE 250 momentum shares to buy? Here are two that City analysts expect to soar in…

Read more »

Young mixed-race woman jumping for joy in a park with confetti falling around her
Investing Articles

Lloyds’ share price is up 20% in 3 months! How high can it go?

Lloyds’ share price has ripped higher recently. Here, Edward Sheldon provides his view on the level it could potentially climb…

Read more »

Investing Articles

Why the Rolls-Royce share price could continue to outperform

The Rolls-Royce share price keeps moving forward, but this Fool thinks it's still behind where it ought to be after…

Read more »

Fireworks display in the shape of willow at Newcastle, Co. Down , Northern Ireland at Halloween.
Investing Articles

The City expects explosive growth in earnings from this almost-penny stock

It’s rare to find earnings predictions as robust as those for this not-quite-a-penny stock, so I’d research and consider it…

Read more »

Investing Articles

As earnings rise 600%, is Nvidia still the best AI stock to buy?

With the supply and demand equation still looking strong for Nvidia, is the stock still the best AI opportunity for…

Read more »

Value Shares

Cheap UK stocks are soaring! Here’s 1 to consider buying now

In recent weeks, many UK stocks have surged. Here, Edward Sheldon highlights a blue-chip FTSE 100 share he believes could…

Read more »