Bill Ackman’s Pershing Square has sold off most of its stake in Procter & Gamble (P&G) (PG). The size of the position was reduced from 27,123,893 in 3Q 2013 to 739,605 last quarter. The stock accounts for 0.73% of the fund’s portfolio.
Receive e-mail alerts for new research on APD:
Interested in APD?
Don’t miss the next report.
The stake was initiated in 2Q 2012. Pressured by activist investor Ackman, who criticized the management for almost a year for the company’s performance, P&G replaced CEO Bob McDonald in May 2013 with former CEO A.G. Lafley. Although McDonald had initiated a $10 billion cost-cutting program to improve margins, sales growth remained sluggish in a challenging business environment, and shares continued to lag behind rivals Unilever (UL) and Colgate Palmolive (CL).
In its recent 2Q 2014 results, the world’s largest household products maker saw lower profits, earning $3.43 billion, or $1.18 per share, down from $4.06 billion, or $1.39 per share, a year earlier. Revenue was up 0.5% to $22.28 billion. The maker of Pampers diapers and Gillette razors said organic sales grew 3%. Emerging markets sales grew 8% and outpaced developed markets. The company’s beauty division saw weaker results while the health care segment grew 5%.
Analysts expect the currency exchange movements to be major headwinds. However, a diversified portfolio of brands, growth in emerging markets, and strong dividend yield are positive drivers for the company.