Procter & Gamble Rallies on Rumors of Pershing Square Stake
Shares of consumer goods giant Procter & Gamble (NYSE: PG) have surged nearly 4% on Thursday after the Federal Trade Commission gave clearance to hedge fund Pershing Square Capital to make a large investment in the company. FTC clearance is required for a large investor to take a significant ownership stake in a company. Pershing Square's intentions are unclear and the firm declined comment.
The hedge fund is run by noted activist investor Bill Ackman. If in fact, Ackman is looking to build a position in Procter & Gamble, it would make sense. He has previously invested in other major brands such as J.C. Penney (NYSE: JCP), Kraft (NYSE: KFT) and Target, (NYSE: TGT) among many others. Procter & Gamble owns consumer products brands such as Tide, Pampers, Dawn, Old Spice, Gillette, and many more.
The stock has traditionally been thought of as a defensive name. With a market cap of more than $174 billion and a host of steady, staid businesses, Proctor & Gamble tends to hold up well in down markets. Also, the company currently yields around 3.60%, which adds to its defensive profile. Year-to-date, its stock is down a little less than 5%.
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