Seeking Alpha
Profile| Send Message|
( followers)  

Bill Ackman of Pershing Square Capital Management currently manages a portfolio valued at a little less than $6 billion dollars. As of 12/31/2011, his portfolio contained 12 stocks with a breakdown of 12% financials, 29.4% consumer services, 32.3% consumer goods, 4.5% industrials and 21.8% being “others.”

Of all the stocks in his portfolio. Ackman is most bullish about JC Penny Corporation (NYSE:JCP). The company makes up 19.33% of his portfolio. So what are the other names under-the-hood of this investing guru’s portfolio? Check out the list below, plus our valuation of his largest position. And as always, use the names as a starting point for your own due diligence.

Company

Ticker

Current Price

Total Shares Owned

Weighting of Portfolio

JC PENNEY COMPANY INC.

JCP

35.97

34919071

19.33

GENERAL GROWTH PROPERTIES INC.

GGP

15.18

69965786

18.55

FORTUNE BRANDS INC.

FO

60.16

16668636

17.2

CITIGROUP INC.

C

4.43

146514287

11.87

KRAFT FOODS INC.

KFT

31.47

19470089

10.51

TARGET Corp.

TGT

49.55

7399622

7.62

GENERAL MOTORS COMPANY

GM

30.85

7187740

4.54

CORRECTIONS CORP. OF AMERICA

CXW

23.52

7827430

3.36

THE HOWARD HUGHES CORP.

HHC

68.56

3568017

3.33

AUTOMATIC DATA PROCESSING

ADP

50.35

1404733

1.11

BORDERS GROUP

OTC:BGPIQ

0.18

10597980

0.16

GREENLIGHT CAPITAL RE

GLRE

27.62

250000

0.11

Looking at Ackman's largest position, rising cotton prices are not helping JC Penny's (JCP) bottom line; however, management has done a good job of cost and inventory control over the last few years.

Though the company doesn't maintain any competitive moat, we value shares at $38 apiece on a discounted cash flow basis, using a 10.5% discount rate. The company has a 2.2% dividend yield, and reasonable call premiums for covered call-sellers. The company has plenty of cash flow for a share buy back or a mild increase in the dividend to reward investors.

During 2008 and 2009, the company remained profitable despite the turndown. JC Penny generating cash flow of $186 million and $976 million and net income of $567 million and $249 million during these years. JC Penny trades at $36.18 at the time of writing.

Source: Looking Under the Hood of Bill Ackman's Portfolio