By Barbara Kollmeyer, MarketWatch
AFP via Getty Images
We’ve got a meaty call of the day from Pershing Square Capital Management hedge-fund manager Bill Ackman, who told investors on a call on Wednesday that he is dumping shares in Warren Buffett’s Berkshire Hathaway /zigman2/quotes/208872451/composite BRK.A +0.74% /zigman2/quotes/200060694/composite BRK.B +0.69% .
While Buffett is always the main attraction in a room, Ackman said they “still like what we own,” and offers up plenty of ideas for investors who have “differentiated between companies that are survivors [of the pandemic] that in some cases will benefit from a competitive standpoint” due to the virus.
Ackman said they bought more stock in life sciences and equipment group Agilent /zigman2/quotes/207081878/composite A -0.45% . And they upped a stake of Restaurant Brands International /zigman2/quotes/202094900/composite QSR -4.40% /zigman2/quotes/202094900/composite QSR -4.40% , owner of Tim Hortons, Burger King and Popeye’s, by more than 50%. Pershing Square said as budget-conscious consumers trade down due to the pandemic, they’ll head to cheaper eateries like those.
Pershing is sticking to fast-food chain Chipotle /zigman2/quotes/200781108/composite CMG +1.42% for its “fortress balance sheet” and zero debt. Their stake in home-improvement retailer Lowe’s /zigman2/quotes/205563664/composite LOW +0.62% also rose by just over 50% and Pershing likes that as a longer-term beneficiary from the pandemic. Hilton /zigman2/quotes/202780307/composite HLT +3.38% got some high praise, though investors will need to be patient, for its “resilient business model,” and the fact the company is working hard on technology, such as keyless rooms to bring back its clients.
Then there is Starbucks /zigman2/quotes/207508890/composite SBUX +0.38% , where Pershing completely rebuilt a stake. The coffee giant has seen a huge COVID-19 hit, but will “weather the current storm and emerge even stronger.” Pershing also bought more real-estate development company Howard Hughes /zigman2/quotes/206056706/composite HHC -2.00% , which will face some tough times due to the crisis. On the upside, people still value homeownership now, said Ackman.
This Goldman Sachs chart shows the recovering, but bumpy trajectory for China consumer activity — includes hotels, movie, theater, retail sales, airline seat miles — post pandemic, versus the U.S., where it is obviously deeply depressed. Is China the shape of things to come?
Goldman Sachs Global Investment Research
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