3 Bill Ackman stocks to buy and hold for long-term gains
- Bill Ackman’s Pershing Square Capital has dropped by 24% YTD.
- All companies in the fund have dropped sharply this year.
- We explain whu Chipotle, Canadian Pacific, and Lowe’s are good buys.
Bill Ackman is having a bad year as most of his stock holdings crash. In the UK, Pershing Square Holdings’ share price has dropped by over 20% from its highest level in 2021. At the same time, his hedge fund’s returns have fallen by over 24%. Unlike most hedge funds, Ackman’s portfolio is highly concentrated, with just eight companies. Here are the best Bill Ackman stocks to buy.
Chipotle Mexican Grill
Chipotle Mexican Grill (NYSE: CMG) is a large company that operates almost 3,000 stores in the US. The company is well-known for its diverse Mexican foods like burritos, tacos, salads, and quesadillas among others.
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Chipotle stock price has been in a strong bearish trend as it has lost about 30% of its value since August 2021. This decline is mostly because of the soaring cost of doing business as the prices of top products like avocados has jumped. Chipotle has also been forced to boost salaries as wages rise. Most importantly, analysts believe that its demand will fall as inflation rises.
Bill Ackman believes that Chipotle, under the leadership of Brian Niccol, will continue flourishing as it boosts its digital offerings. CMG has been a good investment for Bill Ackman since he bought the shares at about $406 in 2016.
Canadian Pacific Railway
Canadian Pacific Railway (NYSE: CP) is a relatively tiny part of Bill Ackman’s portfolio. CP is a large rail company valued at over $66 billion. The company transports all types of commodities like coal, automotive, ethanol, forest products, and grain among others.
Canadian Pacific’s stock price has dropped by about 15% from its highest point this year as investors price in weak demand and high cost of doing business. While the company has seen its energy costs surge, it has compensated that by hiking prices.
CP is still a good investment because of the rising demand for its rail services and the ongoing merger with Kansas City Southern. The new company will have the advantage of linking Canada, the US, and Mexico.
Lowe’s (NYSE: LOW) is an American home improvement company valued at over $114 billion. It operates in a near duopoly with Home Depot, a company valued at almost $300 billion.
After benefiting during the pandemic, Lowe’s shares have plummeted since December. The stock has fallen by over 30% as demand for these products fall. The firm is also being affected by the substantial inflation that has lowered the number of home items that people buy.
Still, Lowe’s is a good Bill Ackman stock to invest in because of its strong market share and the fact that it will benefit when the economy recovers.
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