Bill Ackman’s new position in United Technologies
Bill Ackman, the prominent activist investor and the founder and CEO of Pershing Square Capital Management, recently disclosed in an interview with CNBC that he has taken a new position in United Technologies (UTX).
Ackman believes United Technologies is a “great” company. Earlier, we saw that Ackman has lost various bets on different companies. In the previous part of this series, we saw that he lost a bet against Herbalife (HLF) and closed his short position. Three months ago, he closed his long position in Valeant Pharmaceuticals (VRX). Bad bets on these two stocks were costly for Pershing Square Capital Management in 2017.
His fresh long position in United Technologies indicates that he is optimistic about the company’s future performance. On March 5, 2018, UTX was trading at $131.7. It has returned 18% over the past one year. Its 52-week high is $139.24 and 52-week low is $107.05. After the announcement of Bill Ackman’s position in this stock, the stock showed a normal reaction and rose 0.6% on that day.
UTX is trading at a trailing price-to-earnings multiple of 19.8x. The aerospace industry is trading at a trailing price-to-earnings multiple of 24.6x, and the broader market S&P 500 Index (SPY) is trading at 22.3x. As compared to its industry benchmark, UTX is trading at a lower multiple. The S&P 500 Index returned 14.7% in the past one year.
In the next part of this series, we’ll analyze Pershing Square Capital Management’s largest holdings in 4Q17.