The billionaire investor's Pershing Square fund bought about 2 million Domino's shares in March 2021, securing a roughly 5% stake in the fast-food chain. It held roughly the same number of shares at the end of June this year, but it has fully exited the $800 million position since then.
Ackman and his team, longtime admirers of Domino's, pounced on the stock when it tumbled as low as $330 last year. It surged to north of $560 by the end of 2021, but has dropped by about 27% this year to trade around $400 today.
The Pershing Square boss explained the sale in his fund's recent interim report.
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"In light of the company's relatively high valuation in the context of a volatile market environment, we decided to exit our investment to raise cash for alternative investment opportunities," he wrote.
Pershing Square has made several major changes to its stock portfolio in recent years. For example, it invested in Warren Buffett's Berkshire Hathaway in 2019, only to sell the entire position in May 2020.
Moreover, it cashed out a nearly 1% stake in Starbucks to finance its bet on Domino's last spring. It also amassed then dumped a roughly $1 billion position in Netflix within three months this year.
The hedge fund commanded a $7.5 billion stock portfolio at the end of June. Along with Domino's, it held billion-dollar stakes in Lowe's, Chipotle, Hilton Worldwide, and Burger King-owner Restaurant Brands, as well as smaller positions in Howard Hughes and Canadian Pacific Railway.
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Pershing Square has trailed the wider market this year. It returned -10.8% in the year to August 16, exceeding the S&P 500's 8.8% decline over the same period.
Bill Ackman has sold his entire stake in Domino's Pizza after establishing it only last year, a Securities and Exchange Commission filing confirmed this week. The billionaire investor's Pershing Square
Pershing Square
Pershing Square Tontine Holdings was a blank check company formed by Bill Ackman that went public on July 22, 2020, at a value of $4 billion and traded under the ticker symbol PSTH.U before the split of its warrants and shares. In 2020, PSTH was the largest SPAC to IPO to date.
https://en.wikipedia.org › wiki › Pershing_Square_Capital_Ma...
Bill Ackman started to build up the position in Dominos Pizza in Q1 2021 and continued to invest until Q3 2021. Since then they sold 2.09 Million shares.
The intrinsic value of one DPZ stock under the Base Case scenario is 438.64 USD. Compared to the current market price of 408.49 USD, Domino's Pizza Inc is Undervalued by 7%.
In Bill Ackman's current portfolio as of 2024-06-30, the top 5 holdings are Hilton Worldwide Holdings Inc (HLT), Chipotle Mexican Grill Inc (CMG), Restaurant Brands International Inc (QSR), Alphabet Inc (GOOG), Canadian Pacific Kansas City Ltd (CP), not including call and put options.
In Bill Ackman's portfolio as of 30 Jun 2024, the top 5 holdings are (HLT) HILTON WORLDWIDE HOLDINGS IN (18.76%), (CMG) CHIPOTLE MEXICAN GRILL INC (17.34%), (QSR) RESTAURANT BRANDS INTERN (15.64%), (GOOG) ALPHABET INC-CL C (13.30%) and (HHH) HOWARD HUGHES HOLDINGS INC (11.74%).
The chain suffered its worst one-day stock decline in more than a decade last week after unexpectedly suspending its store-growth target due to some international store closures by a major franchisee.
The company reported fourth-quarter and full-year 2023 results before the bell, and beat earnings expectations. Management also reiterated how it plans to continue to grow. Investors cheered the report, pushing the pizza chain's shares up by as much as 10%.
As a result, Ackman believes that DPZ is relatively overvalued in light of a volatile investing environment. The cash generated from the sale will be used for other undisclosed alternative investment opportunities.
Domino's Pizza has a consensus rating of Strong Buy, which is based on 3 buy ratings, 1 hold ratings and 0 sell ratings. The average share price target for Domino's Pizza is 371.67p. This is based on 4 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
(NYSE: BN) and Nike (NYSE: NKE). Pershing Square bought 6.85 million shares of Brookfield valued at $284.7 million at the end of Q2. This was Ackman's first time to own the stock.
Pershing Square Capital Management, L.P. has disclosed 9 total holdings in their latest SEC filings. Portfolio manager(s) are listed as Bill Ackman. Most recent portfolio value is calculated to be $ 10,411,823,523 USD. Actual Assets Under Management (AUM) is this value plus cash (which is not disclosed).
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