Ackman's Strategy on Alphabet, Brookfield, and Hilton Revealed

A recent report explores Bill Ackman's focus on three high-potential stocks: Alphabet, Brookfield, and Hilton. With significant investments, Ackman's strategy highlights factors influencing value appreciation and investors' interest in these companies.

Date: 18-12-2024

AI Rating: 7

The report centers on Bill Ackman and his investment strategy through his hedge fund, Pershing Square Capital. Ackman maintains a concentrated portfolio, with significant stakes in three companies: Alphabet, Brookfield, and Hilton. Let's break down the key financial aspects presented in the report.

Alphabet

Ackman's investment in Alphabet is notable, as he holds about $2.2 billion worth of the company. The report highlights Alphabet's strong performance amidst concerns regarding AI's impact on its core business. Notably, Alphabet's revenue growth is impressive, with its 'Google Search and other' segment increasing by 12% last quarter. Additionally, Google Cloud's revenue soared 35%, subsequently leading to a profitable operating shift from a $440 million loss to a $1.95 billion profit. This demonstrates robust growth and a turnaround in profit margins.

Brookfield

Ackman’s stake in Brookfield spans about $1.9 billion. The report discusses expected free cash flow growth of over 20% annually, projecting $47 billion over the next five years. A significant emphasis is placed on Brookfield's strategic decisions to make its shares more investable, alongside its strong outlook. The report indicates the potential for stock price appreciation with current trading nearly 15 times distributable earnings, underlining Brookfield’s positive growth trajectory.

Hilton

Ackman also has a notable investment in Hilton, valued at roughly $1.9 billion. Hilton's ongoing expansion and increasing member base for its loyalty program create a competitive advantage. The hotelier has seen significant property growth, from 6,110 to 8,301 properties, which further strengthens its market position. However, the report suggests Ackman is taking some profits amidst a valuation of about 30 times enterprise value-to-EBITDA, signaling a strategic maneuver in light of market conditions.

This comprehensive look at Ackman’s strategy showcases a focus on long-term value, highlighting revenue growth, profit margins, and the positive outlook for free cash flow for Brookfield specifically. However, potential regulatory challenges for Alphabet and valuation concerns for Hilton could impact investor sentiments in the near term.

Stocks: GOOG BN HLT