Market Overview

Bill Ackman Puts 18% of Assets into Procter & Gamble

Noted activist investor Bill Ackman announced his latest stock pick yesterday at CNBC's Delivering Alpha Conference. Ackman, who is well-known for being actively involved in the current J.C. Penney (NYSE: JCP) turnaround process, revealed that his Pershing Square fund owns approximately $1.8 billion worth of Procter & Gamble (NYSE: PG).

In the CNBC interview, Ackman said that, “We're going to take a hard look to see if we can add any value to Proctor & Gamble. [sic]”

Pershing Square's stake in Procter & Gamble is very sizeable, as it makes up about 18 percent of the firm's assets under management. However, Ackman is not concerned about this and states that it is very hard to lose money in Procter & Gamble at the current price levels. He also noted that Pershing Square acquired the shares at a lower price than they are currently trading.

The shares of Procter & Gamble have risen nearly 10 percent from lows of the year in the past three weeks. The stock recently broke back above its 50-day and 200-day moving averages, which are key technical levels. Procter & Gamble is expected to report its Q4 and full-year earnings on August 3 and strong numbers could further extend the recent rally.

Bill Ackman's interest in Procter & Gamble could indicate that its peers might be profitable picks as well. For example, Colgate-Palmolive (NYSE: CL), which is up 14 percent on the year, could continue its strong performance. On the other hand, traders who want to get exposure to the entire consumer staples sector might want to take a look at Consumer Staples Select Sector SPDR ETF (NYSE: XLP).

Posted-In: CNBC Long Ideas Short Ideas Hedge Funds Movers & Shakers Media Trading Ideas General

 

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