Bill Ackman is one billionaire investor many follow closely. There are good reasons for this, from the outspoken nature of the hedge fund manager on a range of topics (including politics), to his high-profile feuds with others in the hedge fund world (which has been entertaining to watch, to say the least).
Quick Read
-
Restaurant Brands (QSR) trades at its cheapest valuation in recent history and offers a 3.5% dividend yield.
-
Uber (UBER) is Ackman’s largest holding at $2.8B with gross bookings surging 21% last quarter.
-
Amazon (AMZN) remains a top Ackman holding due to its cloud infrastructure scale and profitability growth.
-
If you’re thinking about retiring or know someone who is, there are three quick questions causing many Americans to realize they can retire earlier than expected. take 5 minutes to learn more here
That said, Bill Ackman has made some intriguing bets in the past, many of which have paid off handsomely. I think three of his recent picks are certainly ones worth considering.
Without further ado, let’s dive in!
Restaurant Brands (QSR)
The fifth-largest holding of Bill Ackman’s Pershing Square Capital Management Holdings, Restaurant Brands (NYSE:QSR) is one I’ve seen more news flow on than I have in some time. Other billionaire investors also appear interested in diving into this name, with the company’s robust revenue and earnings growth profile amid a shaky market for tech stocks driving higher demand for this company’s shares than I’ve seen in some time.
With some of the top world-class fast food banners within the company’s portfolio (including Burger King, Popeye’s, Tim Horton’s and others), Restaurant Brands benefits from not only solid same-store sales growth around the country, but global expansion efforts which have paid off in key markets, particularly in Asia.
With a very defensive business model (those eating away from home may choose to trade down to a Restaurant Brands location when dining out in times of economic turmoil), I’d argue the company’s future earnings and cash flow profile is more attractive than other restaurant chains.
And with a dividend yield of 3.5% and a reasonable valuation (actually one of the cheapest valuations in recent history), this stock does indeed look like a screaming buy to me right now.
Uber Technologies (UBER)
Ride-hailing giant Uber Technologies (NYSE:UBER) is actually Ackman’s largest holding, with the hedge fund manager currently holding 30.3 million shares of the company, valued at more than $2.8 billion at the time of writing.
This position certainly makes sense, given Uber’s impressive free cash flow and profit growth in recent years. The company has completely pivoted from a loss-generating machine, to one that’s effectively monetized its impressive base. And with gross bookings surging 21% this past quarter (the fastest growth in recent years), it’s clear that the market has been offsides in valuing this stock more as a mature tech company rather than a higher-growth name.
As the company’s margins improve as it scales further, Uber looks like an intriguing bet to make right now. As its earnings growth profile gets more consistent as well, I’d expect the company’s investor base to broaden further over time.
I agree with Ackman’s pick here, and this is an excellent top holding in terms of the world of growth stocks that are out there for investors to choose from right now, at least in my view.
Amazon (AMZN)
Another one of Bill Ackman’s top holdings, Amazon (NASDAQ:AMZN) also remains a top pick of mine right now.
The e-commerce and cloud giant has seen very impressive growth in recent years, despite growing to an eye-watering market capitalization. One of the most valuable companies in the world, Amazon’s reach in its cloud business has been on display, with a recent outage shutting down significant parts of the internet.
Good or bad, this scale and importance to the global infrastructure supporting key industries is a key reason why many long-term investors continue to hold this name. And while Amazon has yet to issue a dividend, the company’s profitability (and return on invested capital) means this money is likely better spent in continuing to grow its business.
As far as quality growth stocks are concerned, it’s hard to find a better option to buy today and sit on for a decade or two, in my view.
The New Report Shaking Up Retirement Plans
You may think retirement is about picking the best stocks or ETFs, but you’d be wrong. See even great investments can be a liability in retirement. The difference comes down to a simple: accumulation vs distribution. The difference is causing millions to rethink their plans.
The good news? After answering three quick questions many Americans are finding they can retire earlier than expected. If you’re thinking about retiring or know someone who is, take 5 minutes to learn more here.