Investors typically pay close attention to shares held by renowned hedge fund managers, especially when volatility on the Street increases. Therefore today, we discuss three Bill Ackman stocks. By following the strategies of seasoned investors like Ackman, we can gain valuable insights and potentially uncover hidden gems. Known for his concentrated portfolio and long-term approach, Bill Ackman’s Pershing Square Capital Management has consistently delivered impressive returns. He is also at the helm of the UK-listed Pershing Square Holdings (OTCMKTS:PSHZF), a closed-end equity fund that mostly invests in North American companies.
His investment strategy involves taking large stakes in companies and working closely with management teams to unlock value. At present, Ackman’s portfolio consists of eight holdings. Today, we delve into three top Bill Ackman stocks that deserve a place on your watchlist this April as these picks offer a blend of growth potential, stability and potential value.
Alphabet (GOOGL, GOOG)
One of the leading Bill Ackman stocks is Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG), offering a piece of Google’s dominance in search, cloud computing and its foray into artificial intelligence (AI). Alphabet holds a commanding presence in the online advertising market through Google Search and YouTube, generating consistent revenue streams and solidifying its position as a market leader.
Alphabet kicked off the year with a strong performance, demonstrating its resilience amid volatility on Wall Street and continued growth. In its fourth-quarter and full-year 2023 earnings report, Alphabet reported impressive revenues of $86.3 billion, marking a 13% year-over-year (YoY) increase. Diluted earnings per share (EPS) also saw significant growth, reaching $1.64 compared to $1.05 in the same quarter the previous year.
Demonstrating its commitment to shareholder value, the company distributed a substantial $61.5 billion through stock repurchases. In other words, Alphabet boasts a robust financial position with consistent revenue growth, healthy profit margins and a substantial cash reserve. This financial strength allows for continued investments in future growth initiatives and provides stability during economic uncertainties.
Understandably, such positive momentum is reflected in GOOGL’s stock price performance, with a year-to-date gain of 13%. While the shares are currently trading near all-time highs, the valuation remains attractive compared to many other tech names at 26 times forward earnings. Analysts also remain bullish, with a 12-month median price forecast of $166.68. This potential upside of 7% makes GOOGL stock a compelling addition to any growth-oriented portfolio.
Canadian Pacific Kansas City (CP)
Renowned as one of Bill Ackman stocks, Canadian Pacific Kansas City (NYSE:CP) stands as a leader in the North American rail industry with a vast transcontinental network. The company plays a crucial role in transporting essential goods, including bulk commodities, merchandise freight and intermodal traffic.
Canadian Pacific’s most recent financial results announced in late January showcased its robust performance and competitive advantage. Revenues reached an impressive $3.8 billion, a significant increase from $2.5 billion in the same quarter of the previous year. While adjusted combined diluted EPS was slightly lower year-over-year at $1.18 compared to $1.36, management remains optimistic about future growth.
CP’s stock performance reflects this positive outlook, with a year-to-date gain of 8%. At present, shares are changing hands at 27 times forward earnings. While the 12-month median price forecast indicates a potential upside of about 2%, it’s also important to consider the broader context of CP’s expanding network, operational efficiency and strategic positioning.
Restaurant Brands International (QSR)
The final company among our Bill Ackman stocks is Restaurant Brands International (NYSE:QSR), known for iconic brands like Tim Hortons, Burger King and Popeyes. With a strong focus on sustainable outcomes, the company boasts over $35 billion in annual sales. In other words, the restaurant group has a loyal customer base and strong brand recognition, providing a solid foundation for long-term growth in the consumer space.
Recently, management of the fast-food giant released fourth quarter and full 2023 results. Global sales went up 10% for the fourth quarter and over 12% for 2023. Adjusted diluted EPS for the fiscal year was $3.24 versus $3.14 in 2022. Meanwhile, the company returned $1.5 billion to shareholders.
So far in 2024, QSR stock has declined about 9% and currently has a forward price-to-earnings (P/E) ratio of 21x. Yet, Wall Street remains optimistic about QSR shares, giving it an upside potential of around 20%. Readers should also note that the current dividend yield stands at 3.2%
Restaurant Brands’ revenue streams are diverse, encompassing retail sales from company-owned restaurants, royalties, lease income from franchised stores and supply chain operations. This diversification could help mitigate risk and provide a more stable revenue base in economically challanging times.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines