Ackman's Firm Boosts Stake in Nike, Cuts Chipotle During Q4

Bill Ackman's Pershing Square Capital Management has made some significant moves in its portfolio during the fourth quarter of 2024. The hedge fund, led by the renowned investor, increased its stake in Nike, Inc. (NKE) while reducing its position in Chipotle Mexican Grill, Inc. (CMG). These strategic adjustments reflect Ackman's keen eye for value and his ability to capitalize on market opportunities.



Nike, the world's leading sportswear and footwear company, has faced challenges in recent years, but Ackman sees a compelling opportunity in the stock. Pershing Square Capital Management bought over 3 million shares of Nike during the fourth quarter, making it the ninth-largest position in the fund's portfolio. This move comes as Nike's stock has slumped 28% this year, following a disappointing earnings report that saw its stock tumble 20% in a single day. Despite the recent struggles, Ackman believes that Nike is still undervalued and has the potential for significant upside.



Ackman's investment in Nike aligns with his historical investment themes, such as margin expansion and competitive moats. Nike has consistently demonstrated strong gross margins and has been able to expand its operating margins over time. The company's brand recognition, global reach, and network effects create a powerful competitive advantage that is difficult for rivals to overcome. Additionally, Nike's commitment to innovation and sustainability sets it apart from competitors and positions it well for long-term growth.

On the other hand, Pershing Square Capital Management reduced its stake in Chipotle Mexican Grill during the same period. The hedge fund sold 8.38 million shares of Chipotle at an average price of $60.40, locking in substantial gains before the market downturn. This move suggests that Ackman was timing the market and taking profits on a position that had delivered a robust year-to-date performance of 37% through the end of June. Additionally, the recent departure of Chipotle's CEO, Brian Niccol, may have raised concerns about the company's future direction and growth prospects, prompting Ackman to reduce his exposure to the stock.

In conclusion, Bill Ackman's Pershing Square Capital Management has made strategic adjustments to its portfolio during the fourth quarter of 2024. The hedge fund increased its stake in Nike, Inc. (NKE) while reducing its position in Chipotle Mexican Grill, Inc. (CMG). These moves reflect Ackman's ability to identify undervalued opportunities and capitalize on market inefficiencies. As the market continues to evolve, investors can expect Ackman to remain at the forefront of value investing and continue to make strategic adjustments to his portfolio.