Bill Ackman just sold a “Magnificent Seven” stock. Here’s what all that money could buy.

We recently got an updated look at the portfolios of many notable hedge funds, and there have been some moves from Pershing Square of billionaire standout Bill Ackman. These include some large sales of stock as well as some new positions.

One sale in particular stood out as it was one of the fund’s best performers and is a member of the ‘Magnificent Seven’. Here’s a rundown of Pershing’s latest moves and what Ackman might be looking to do next.

Pershing made big sales of stock in the second quarter

Once a quarter, US institutional investors managing portfolios of $100 million or more must file SEC Form 13F, which provides a fresh look at their holdings. Studying the moves of top managers like Bill Ackman can be a great source of ideas for your own portfolio. It’s especially noteworthy when they’re buying or selling big-name stocks — like one of the Magnificent Seven, the giant innovators who have driven the market higher in recent years.

Ackman actually decided to cut back four of Pershing’s stock positions in the second quarter. Here’s an overview of what they were:

Data source: Pershing Square SEC filings as of 06/30/2024. Estimated earnings are based on market value at the end of Q2. Alphabetical sales include Class A (GOOGL) and Class C (GOOG) shares.

While it wasn’t the biggest sale, the one that stood out to me was Alphabet, a member in good standing of the Magnificent Seven. Not only was Alphabet the company’s largest investment (it still is), but it was a stellar performance for Pershing, nearly doubling in just over a year of ownership since Pershing first reported that it owned Alphabet in the first quarter of 2023.

To be clear, we don’t know exactly why Ackman chose to sell some of his Alphabet stake (or any of these other stocks). Maybe it was profiteering. Perhaps Ackman thinks Magnificent Seven stock is getting a little too expensive. Or maybe Ackman wanted to raise capital for a future investment — more on that in a bit.

It’s also worth noting that both of these big sales happened sometime during the second quarter, at least two and a half months ago, which was happy timing. Alphabet’s latest earnings report sent shares plummeting a few weeks ago, and Chipotle recently lost its CEO to Starbucks.

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2 new additions to the portfolio

It’s also interesting to note that Pershing added two brand new equity positions during the second quarter. Ackman and his team bought a stake in the asset manager Brookfield Corp (NYSE: BN)as well as in the clothing giant NIKE (NYSE: NKE).

To be sure, these weren’t massive investments — at least not by Ackman’s standards. The two positions combine for about $500 million in market value, and all of Ackman’s existing investments are each worth more than $1 billion.

But it’s significant when Pershing buys a new stock because it traditionally maintains a small and focused portfolio. Even after adding these two, there are only 10 stocks in this portfolio worth more than $10 billion. In fact, these are the first new stocks added to Alphabet’s portfolio in over a year.

What could Ackman have in his sights?

A key takeaway is that Pershing Square was a net seller of stock in the second quarter, and while we don’t know the exact buy and sell prices, the company sold about half a billion dollars more than it bought.

While we don’t know exactly what Ackman’s plans are either, we do know that he recently initiated an attempt to take on a real estate developer. Howard Hughes Holdings (NYSE: HHH) private. Pershing already owns 37 percent of Howard Hughes, and buying the rest would cost several billion dollars, so Ackman could be hoarding cash in anticipation of a potential deal.

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Suzanne Frey, chief executive at Alphabet, is a member of the Motley Fool’s board of directors. Matt Frankel has positions in Brookfield Corporation, Howard Hughes and Starbucks. The Motley Fool has positions in and recommends Alphabet, Brookfield, Brookfield Corporation, Canadian Pacific Kansas City, Chipotle Mexican Grill, Howard Hughes, Nike and Starbucks. The Motley Fool recommends the following options: long January 2025 $47.50 for Nike and short September 2024 $52 for Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

Bill Ackman just sold a “Magnificent Seven” stock. Here’s what all that money could buy. was originally published by The Motley Fool