Diversification, schmiversification. That seems to be the attitude of billionaire hedge fund manager Bill Ackman. His Pershing Square Capital Management owns a total of 10 shares. Two of these shares are different share classes of the same company — Alphabet.
Ackman did not take any new positions in the third quarter of 2024. However, he did buy more of two dividend stocks over and over again.
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As we enter Q3, Brookfield Corporation (NYSE:BN) was by no means Ackman’s largest holding company. But the global investment firm was at the top at the end of the quarter (at least, if we don’t lump its holdings in Alphabet Class A and Class C shares together).
Pershing Square bought about 25.9 million shares of Brookfield in the third quarter, increasing its stake by nearly 378%. The shares now make up 13.5% of the hedge fund’s portfolio.
Brookfield is a dividend stock, but I doubt there’s an income investor on the planet who would get excited about the company’s dividend. The future dividend yield is a paltry 0.55%.
However, investors could be excited about Brookfield’s returns. The shares have grown approximately 18% annually over the past thirty years. In the last twelve months alone, Brookfield’s shares have skyrocketed 70%.
Nike (NYSE:NKE) was among Ackman’s smallest holdings before July 2024. However, the billionaire now owns a much larger stake in the footwear and apparel giant. Pershing Square bought more than 13.2 million shares of Nike in the third quarter, increasing its position by approximately 436%.
Income investors will find more sympathy with Nike than with Brookfield Corporation. Nike’s dividend yield is a respectable 2.11%. Believe it or not, that’s the second-highest dividend yield in Ackman’s portfolio.
Unlike Brookfield, however, Nike hasn’t made shareholders very happy lately. The stock is down 30% in the past twelve months. It is almost 60% below the late 2021 peak.
In Nike’s latest quarter, sales fell 10% year over year. Diluted earnings per share fell by 26%. The company brought in a new CEO in October in hopes of righting the ship.
Since the late 1980s, Nike’s slogan has been ‘Just Do It’. Ackman seems to think the company can make that phrase a reality by turning things around. Maybe he should be patient. CFO Matthew Friend said last month: “A comeback on this scale takes time.”
