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This article is part of a series that provides an ongoing analysis of the changes made to Pershing Square's US stock portfolio on a quarterly basis. It is based on Ackman's regulatory 13F Form filed on 05/15/2013. Please visit our Tracking Bill Ackman's Pershing Square Holdings article for an idea on how his holdings have progressed over the years and our previous update highlighting the fund's moves during Q4 2012.

Ackman's portfolio increased 10% from $9.15B to $10.07B this quarter. The number of positions went up from 8 to 9 as a small (1.82% of US long portfolio) new position in Mondelez International was added in the quarter. The portfolio remains heavily concentrated with a few large bets: the top five positions account for close to 90% of the total portfolio value.

New stakes:

Mondelez International (MDLZ): MDLZ is a small 1.82% of the US long portfolio position established this quarter at prices between $25.45 and $30.62. The stock currently trades above that range at $31.50. Investors attempting to follow Ackman should also consider that Warren Buffett reduced his long position in MDLZ by around 50% this quarter - Buffett acquired the position as a result of the spin-off from Kraft.

Stake Disposals:

None.

Stake Increases:

Burger King Worldwide (BKW): BKW is 7.28% of the US long portfolio stake that was established in Q3 2012 at prices between $13.03 and $15.88. The position was increased marginally this quarter at prices between $16.31 and $19.95. The stock currently trades at $19. Ackman's investment in Burger King Worldwide started with a transaction to acquire 29% of the company for $1.4B in April 2012. The acquisition was done through Justice Holdings, a British company controlled by Ackman. That stake is not reported in the 13F filings as Justice Holdings is a UK listed investment vehicle - it is not a 13F security. Including that, the investment in BKW rivals his stakes in Procter & Gamble (PG) and Canadian Pacific Railway (CP), his largest positions.

Stake Decreases:

Procter & Gamble Co CALLS: PG is a huge 22.12% of the US long portfolio activist position established in Q2 2012 at a price-range between $59.27 and $67.57. The stake was increased by 28.55% in Q3 2012 at prices between $61.19 and $69.76. Last quarter, the long position was kept steady while the call options were reduced by one-third. The pattern continued this quarter as the call options were reduced by another 78%. The stock currently trades at around $81. Activist roles are effective when a good portion (over 10% ideally) of the outstanding shares are acquired or otherwise controlled by the investor concerned. This is not the case with Ackman's position in PG as he controls only about 1% of the outstanding shares. Even so, the position has worked so far, as the stock is trading well above his cost-basis. In the Ira Sohn conference earlier this month, Ackman indicated that the shares could be worth $125 per share in two years, if financials improve and PG achieves $6 EPS. He also called for the need to separate the CEO and Chairman roles at the company.

Matson Inc. (MATX): MATX's stake was acquired as part of its spin-off from Alexander & Baldwin Inc. (ALEX). It is a small 0.74% stake that was reduced by around 17% this quarter at prices between $24.25 and $27.41. The stock currently trades at around the spin-off price of ~$26.

The remaining five positions were untouched during the quarter:

General Growth Properties (GGP): GGP is one of Ackman's biggest wins at Pershing Square. He acquired the stake during bankruptcy in Q2 2009 in the $1 price-range and the stock currently trades at $22.86! The stake was kept steady this quarter after it was increased by around 3.5% in Q3 2012 at prices between $17.20 and $20.99. The position accounts for 14.76% of Ackman's US long portfolio. Investors attempting to follow Ackman should wait for a better entry point.

J C Penney (JCP): JCP is 5.86% of the US long portfolio stake established in 2010 at a purchase price of around $25. JCP has been very volatile with the stock trading as high as $43 in February 2012 and dropping to as low as $13.93 last month. It currently trades at $18.97. Ron Johnson (of Apple fame) was brought in as CEO but was replaced as his initiatives resulted in a 25% drop in sales. In the last month, the stock rebounded as George Soros revealed a new 7.9% stake in the company.

Canadian Pacific Railway: CP is his largest 13F position at 31.31% of the US long portfolio. The stake was established in Q3 2011 with the bulk purchased in Q4 2011 at prices between $46.05 and $71.82. The stock currently trades at around $135. Ackman reigned in management and board changes at the company by winning a proxy battle in May last year. Ackman is sitting on huge gains on this position.

Beam Inc. (BEAM): BEAM is a spin-off from Fortune Brands and the stock is up around one-third since the spin-off in September 2011. Ackman acquired the stake in Fortune Brands in 2010 and his cost-basis is well below the spin-off price. It currently accounts for 13.14% of the US long portfolio. Ackman is sitting on huge gains on this position as well.

Howard Hughes Corp (HHC): HHC is a small 2.97% of the US long portfolio position that was first purchased in 2010. The stake has remained untouched during the whole period. The stock is currently in an uptrend having increased around 45% YTD. Ackman called HHC one of the best kept secrets on Wall Street at the Harbor Investor Conference in February 2013.

The spreadsheet below highlights changes to Pershing's US stock holdings in Q1 2013:

(click to enlarge)

Source: Tracking Bill Ackman's Pershing Square Portfolio - Q1 2013 Update