저자: SvenCarlin · 외국인
요약 보기
결론: 빌 애크먼의 장기 성과는 우수하나 최근 실적 부진으로 펀드 투자 판단은 장기 관점과 행동주의 리스크를 함께 봐야 한다. 펀드 성과: 퍼싱스퀘어 홀딩스는 2004년 출범 후 장기간 시장을 크게 웃돌았으나(영상 기준 연 14.4%, S&P500 8.7%), 2016~2017년 최근 실적은 부진했다. 2017년에는 주요 보유 종목 전반이 부진했고 S&P500에 뒤처졌다. 주요 보유 종목 분석: ADP는 경쟁사 공세로 시장점유율이 하락하고 있어 행동주의 시도가 실패했으나, 영향력 확보 가능성은 남아 있다고 봤다. 레스토랑브랜즈(팀홀튼·버거킹·파파이스)는 PER 22배로 동종 대비 저평가로 평가됐다. 몬델리즈는 공매도 잔고가 증가하며 주가가 부진했다. 하워드휴즈는 장기 보유 종목으로 소개됐다. 치폴레: 신임 CEO 영입 등 턴어라운드를 시도했으나 치즈 딥 출시 실패 등 경영 실패 사례로 제시됐다. 패니메이·프레디맥은 주택금융 개혁에 대한 비대칭적 베팅으로 소개됐다. 퍼스트데이타 계열 스핀오프 등 촉매가 언급됐다. 나이키: 고품질 사업으로 평가됐으나 이미 주가가 크게 올라 가격 부담이 있다고 봤다. 애크먼은 이 포지션으로 약 1억 달러 수익을 내고 청산했다. 허벌라이프: 5년간 공매도 전쟁을 벌였으나 칼 아이칸과의 싸움 끝에 자사주 매입 등으로 주가가 상승해 실패한 베팅으로 정리됐다. 투자 시사점: 첫째, 애크먼은 수수료 구조상 현금 보유가 어려워 리스크 대비 수익이 낮은 투자를 할 수 있다. 둘째, 행동주의 전략은 경영진 교체가 실패하면 가치 실현이 어렵다. 셋째, 장기 성과는 우수하나 단기 실적 부진을 감내할 수 있어야 한다. 출연자 전망: 애크먼 펀드 할인율(순자산가치 대비 23%) 등을 근거로 현 시점이 매력적이라고 봤으나, 장기 관점에서 평가해야 한다는 입장이다.
다듬은 글
good day fellow investors. Today we're going to talk about... hi, I'm Bill Ackman, I'm the CEO of Pershing Square Capital Management. Thanks, Bill. So let's dig into the annual report that was just released from Pershing Square, analyze the long-term and short-term performance of the fund, discuss the top 10 portfolio holdings, and finish with the possible implications for your investment strategy. Let's go.
Pershing Square Holdings is a closed-end investment fund run by Bill Ackman. He is very well known because he is a self-made billionaire with a 25-year record of beating the market. He launched his fund in 2004, and as you can see, he has beaten the market by more than double since then. Today it is so popular to say "invest in index funds, invest in ETFs," but if you invest in index funds you will just get average returns. On this channel we constantly see Buffett, Munger, and others prove that there is a way to beat the market consistently over time. You cannot call those Sigma events, because they do it constantly. By making smart investments in great businesses, as Ackman has been doing, you can beat the market. He is a little more activist, but that is the whole philosophy of this channel. Ackman's performance was 14.4% annually, and a few years ago it was 20% per year, while the S&P in that period delivered 8.7%. So he is still far ahead.
There are two types of hedge fund and investment managers. One is the passive investment manager like Buffett, who likes to buy a company and not interfere too much with management; he likes to buy good management. The other is Ackman, who likes a good business with bad management, so he can actively replace management with new people who do the job better and unlock the value of the great business.
A perfect example of how Ackman operates is his investment in Canadian Pacific Railway. He accumulated a large position, then convinced the board that management needed to make major changes to the business. When management resisted, Ackman convinced the board to fire the CEO and senior management and replace them with people willing to make the changes he prescribed. Needless to say, the stock rose from $46 when Ackman was buying to more than $150 when he sold his position. Ackman was right: the new management made the changes, they were successful, the business thrived, and the stock went up more than 300% in two years. Forbes magazine called it one of the great corporate turnarounds in recent memory.
Another big winner for Ackman was his short position in MBIA, a large mortgage insurer. He discovered in 2002 that MBIA had liabilities of $764 billion against only $5.5 billion in equity, a ratio of 139 to 1. Needless to say, this was insane and very risky. Ackman was shocked that the bond rating agencies had not changed their AAA ratings. He believed that if he simply brought this to the agencies' attention, they would downgrade it, and when that happened the company would essentially blow up. What he did not count on was that, as we found out in the housing crisis, the rating agencies were corrupt and bought and paid for by the companies they rated. So Ackman had to hold his short position all the way from 2002 until the housing crisis finally blew up the company, a seven-year wait. He was ridiculed and called a fool for almost the entire time, but he held to his conviction. He was right, and he was rewarded big time.
Now that we know something about Ackman's past performance, let's look at the recent performance, which is not that stellar. However, it may still be a possibility to invest in his fund or in one of his holdings that fits your portfolio. Pershing's return was negative 4% in 2017, negative 14% in 2016, and negative 20% in 2015. The reasons were some of his bad investments, like Valeant, Herbalife short, and others. Looking at his activist history over time: he started with Wendy's by spinning out Tim Hortons, then went on to Sears, Borders, Target, PNG, Chipotle, and ADP, the last two being the most recent. Looking at the 2017 performance, the underperformance was spread across all his holdings. He underperformed the S&P 500, which also shows that it wasn't just Herbalife or Valeant that hurt him; the bulk of his positions were not doing well.
So after the underperformance, should you invest with him or in his holdings? He says yes. He believes this is a particularly attractive time to invest in the fund, because the portfolio trades at a wide discount to intrinsic value with many catalysts that should contribute to value recognition. The shares were trading at a 23% discount to net asset value, the idea-generation engine is intact and productive, they have resolved the liabilities coming from Herbalife and Allergan, and management fees are reduced because of the higher watermark.
So should you invest with Ackman, like Ackman, or not? What matters is whether you look at a four-year track record or a 15-year track record. That's the key. If you look at the four-year record, as most investors do, you see that Ackman did badly in the last few years, and most investors are selling Pershing Square. But if you look at the 15-year record, he did extremely well. This is always the key difference between short-term and long-term investing. As we discussed a few days ago in the Graham video, we are hardwired for the short term, and we make decisions based on the short term rather than the long term, and that is very costly for long-term investment success, because investing is about the long term. So I don't know whether we should write Bill Ackman off or whether he will re-emerge. We will see, and we will follow. Please subscribe to the channel.
Now let's dig into the top 10 holdings Ackman has, and see whether they are overvalued, fairly valued, or undervalued, and whether they are actually great businesses as Ackman describes them.
**1. Automatic Data Processing (ADP)** ADP is the largest payroll processor in the world, but competitors are really eating into its margins and market share, and that is a big problem. ADP's market share has been falling, especially in the enterprise segment, which is the biggest and most lucrative and carries the highest margins. ADP's overall operating margins have been shrinking. Last fall Ackman made a big push to gain activist control of ADP's board to force management to make major changes or be replaced. The effort failed, and that's key. But Ackman believes he still accomplished something important: he got the attention of other ADP investors, and management will now be more responsive to his ideas. Here is what Ackman says about ADP: "The status quo is harming the long-term competitive position of the company. The company is losing market share and losing very material ground. The current legacy products and systems are really issues that need to be addressed." The current price-to-earnings ratio is 29, which is pretty high, but ADP has always been considered a great business, and that's why it deserves a premium to the market. Ackman believes margins and earnings will grow at about 7% over time, operating margins should expand from 19% to 45%, and he expects net margins to improve 500 basis points by 2022. That should lead to earnings per share of about $20 for ADP. If the market multiple applied is 25, even if it drops from the current 29, the implied price is around $500, so the potential return for Ackman is about 400%. But if the improvements are not implemented by management, and he doesn't manage to convince the board that urgent replacements are necessary, then ADP may no longer be a great business. It might just be a good business with deteriorating market share, and that's not such a promising story. So the risk-reward: ADP was clearly a great business in the past, and Ackman is right about much of what he says. If the company follows through, there could be positive surprises. We will have to follow what happens and whether Ackman manages to actively change management or direction.
**2. Restaurant Brands International (QSR)** Restaurant Brands International owns three major restaurant chains: Tim Hortons, Burger King, and Popeyes. Ackman believes there is much more scalability in their business, coming from acquisitions and organic growth. For example, Tim Hortons is a highly successful brand in Canada but hardly known in the US. The price-to-earnings ratio is 22 and the price-to-free-cash-flow is 21, so he sees it as undervalued relative to peers, which trade at a multiple of about 20.
**3. Mondelez International (MDLZ)** Another company Ackman has invested in is Mondelez, the international manufacturer of packaged foods and beverages, which includes familiar brands like Oreo, Nabisco, Cadbury, Toblerone, Trident, and Halls. As you can see from the chart, Mondelez has badly underperformed the market over the past year and a half. It's interesting that short interest in the stock has been rising lately, so we'll see how that works out for Ackman. With a P/E ratio of 18 times consensus 2018 earnings, Ackman says: "We expect continued acceleration in revenue growth, double-digit EPS growth, and clarity on the CEO's strategy will cause the multiple valuation to rise to levels approaching intrinsic value."
**4. Howard Hughes Corporation (HHC)** Howard Hughes is Pershing's long-standing portfolio holding. Ackman pitched the company at the 2017 Sohn conference as his top idea. It is a developer specializing in fully planned mixed-use development communities. You can check a detailed investment case on the company's website.
**5. Chipotle (CMG)** Ackman believes it is a perfect turnaround opportunity. If I had one cent for every time I heard that story, I would be rich. But let's dig into the company and see what Ackman has done and whether it worked. Ackman really helped management bring in a new CEO, Brian Niccol, the former CEO of Taco Bell. Ackman believes Niccol can bring superior knowledge of system efficiency to Chipotle. However, critics believe this is a classic mismatch: a CEO from a company that serves highly processed food, focusing on volume, brought in to run a company whose brand was built on healthy, fresh ingredients. The first big idea for the turnaround was adding a new queso dip to the menu. Historically the company had said it would never sell cheese dip, but now the CEO thought it could be a huge winner. Chipotle spent heavily promoting it as a big focal point, and Ackman personally promoted it on CNBC. Unfortunately, the dining public and the media did not agree. This is a case of inept management and poor execution. First, they obviously didn't properly test the product before launch. Then they made matters worse with a pre-launch media strategy that set expectations in the wrong place, which led to an embarrassing headline: "Chipotle exec admits its main selling point is the kiss of death for its chain," and the episode became, as another headline put it, a master lesson in how expectations cause failure. The end result is that consumer sentiment remains tepid, with the chain noting that only 15% of orders include queso, a paltry portion compared with the 40% that include guacamole.
**6. Fannie Mae and Freddie Mac** Here the bet lies on housing finance reform. Ackman believes the share prices could be multiples of the current level if reform happens. That makes it a bet, and such bets are usually asymmetrically priced: there is a potential for zero, and there is a potential for a much, much higher value. The stock price is also very volatile.
**7. Platform Specialty Products (PAH)** Ackman states that fair value for the company is $19, because the company generated 7% organic EBIT growth, driven by 4% organic revenue growth and cost savings. The company also refinanced $4 billion of debt, significantly lowering interest expense. In August 2017 the company announced it intends to separate its Agricultural Solutions and Performance Solutions businesses into two publicly traded companies by the second half of this year, in order to increase long-term value. A spin-off is a potential catalyst for unlocking value, and Ackman believes unlocking it could increase the price by 100%. We will follow the company and see what happens.
**8. Nike (NKE)** Ackman describes Nike as a high-quality business that he expects can compound long-term earnings at a high rate due to strong revenue growth and margin expansion. I must agree with Ackman. The only issue when investing in Nike is the price, and that price has risen a lot. I believe it is up about 30 to 40% since I made the video about Nike in August 2017. Ackman invested heavily in Nike, made about $100 million on that investment, and closed the position because he sees better opportunities elsewhere. So always check: yes, it's a great business, but always check the price. Remember that just six months ago Nike was under great threat from competitors, and now everybody seems to have forgotten that. It will fall again, and then you will have another opportunity to buy on the dip. Don't worry.
**9. Herbalife** Five years ago Ackman began building a short position, then publicly presented his case, saying the stock would drop like a rock and the company would go bankrupt. That didn't happen. He ended up in a five-year fight, including with Carl Icahn. He believes he was correct in his call but underestimated Herbalife's ability to access capital and use financial engineering. Combined with share buybacks that materially reduced the company's free float, this drove share appreciation. It was a fascinating battle with many investment lessons, so it deserves a special video, which I will make in the future. Please subscribe so you get notified when it comes out.
**10. Valeant** Icahn exited his position in S&P 500 (which he sees as another great business) but was unable to establish a full position due to share price appreciation. He also exited his investments in Air Products, Hilton, Nathan's Famous, and an additional undisclosed position, so we still don't know which one that is. Valeant, meanwhile, was one of the year's major disappointments.
I have three big takeaways from this story.
First, Bill Ackman can't stay in cash with a 3% management fee, so he has to stay invested, no matter the risk-reward. That means he may make investments where there are no real opportunities, which can hurt long-term performance. Nobody can comfortably sit in cash while charging a 3% management fee. Why would you pay someone 3% to do nothing? This contrasts with Buffett, who holds huge piles of cash and charges no management fee. When he managed other people's money through his partnerships, he charged only a performance fee, 50% of profits above a hurdle, and a 0% management fee. That is why he could sit in cash whenever he thought it was the best thing to do.
Second, the most significant risk when investing with Ackman, or in his businesses, is the success of his activism. He goes into a company and wants to change management or force certain actions. If he convinces the board to change management, the value can be unlocked. If he fails, the value won't be unlocked. That is the risk of investing alongside activist investors.
Third, we have seen Ackman's poor performance over the short term but huge outperformance over the long term. This is the key: good active management will outperform the market over time. However, I emphasize *good* active management, because Buffett also says that poor and mediocre managers underperform the market. The key to investing, and the purpose of this channel, is to give you as much knowledge as possible so that you become a good investor. When you are a good investor with a long-term view, you can outperform the market by investing in great businesses over time.
That's the message for today. I hope you enjoyed the video. If you like the content and the mindset, please consider subscribing. Feel free to ask your questions in the comments, I love those, and I'll see you in the next video.
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