13F Filings: Ackman, Burry & Buffett

Reviewing what the big dogs bought and sold during the past quarter.

Over the past couple of days, a lot of investment managers have reported the latest Q2 13F Filings. This includes the likes of Bill Ackman, Michael Burry, Warren Buffett and more.

It’s true that the filings reflect the past, in that they have to report within 45 days of the close of the quarter, for the actions of the previous quarter. Despite this, it does give us a good finger on the pulse of what some of the long-term money managers are doing with their portfolios.

To end the week, we wanted to run through some specific trades that caught our eye.

What Are 13F Filings?

The filing is a quarterly report that institutional investment managers in the U.S. are required to file with the Securities and Exchange Commission (SEC). The mandated filing must be submitted by portfolio managers who manage assets of at least $100 million or more in securities.

The filing lists the investor’s equity holdings, including details such as the names of the securities, the number of shares owned, and their market value as of the end of the quarter. However, it does not reveal short positions or investments in certain asset classes like bonds, commodities, or foreign stocks.

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Pershing Square Capital Management (Ackman)

Ackman hadn’t made any changes to his portfolio since Q1 2023. So it naturally caught our attention when we saw two additions to his portfolio this time around.

The biggest change of note for Ackman was the initiation of a new position in Nike. This is reflected via a circa three million share purchase with a market value of $239m.

This interest us for a few reasons. We wrote about Nike a month ago, following up from the poor earnings call that saw the share price crater lower and hit the lowest level since the pandemic crash in early 2020:

We expressed a sceptical view of the firm, citing the lost market share to more nimble competitors like On Running, as well as the struggles with the internal reorganisation and even the unwillingness to accept the price sensitivity of the core client base.

Even though the share price appears to have found a floor for now, it’s still down 23.5% year to date.

Clearly, Ackman sees something that we don’t. His purchase of the stock came after the earnings call, potentially indicating to us that he saw this as a value purchase.

Yet Ackman doesn’t have a history of being a conventional value stock picker. Rather, it has been his activist approach that has garnered his reputation over the years.

It’s true that in recent years he has shifted somewhat to being a more passive long-term investor, shown by other holdings in the 13F such as Chipotle and Hilton that he has maintained a position in.

We’re fairly confident that his active nature on social media will mean he’ll drop some reasoning behind his Nike stake in the near future.

Aside from Nike, he also picked up 6.8 million shares of Brookfield, the Canadian alternative investment manager.

In terms of clues around why he choose to invest now, we quote the below from a recent Brookfield trading update:

“With interest rates anticipated to begin decreasing sometime this year and inflation well past peak levels, liquidity has returned to the capital markets. Most major economies are performing better than expected and the markets are assigning a relatively low probability to a global recession. This recovery has revived risk appetite and fostered an increasingly stable and constructive market.”

We feel this could be a macro play for Ackman, in that he can get exposure to a sentiment shift in markets. Further, Brookfield boasts a strong balance sheet, with potential outperformance here versus weak balance sheet alternatives if investors run scared and pivot to safety.

Current portfolio:

Scion Asset Management (Burry)

Next up is our old friend Michael Burry. Although he did add to his Alibaba position (more on that shortly), the main story from his 13F was his reduction in equity exposure.

Via Scion, he now only holds positions in a relatively undiversified pot of stocks. The total value the positions is around $52m, only half of the portfolio’s value last quarter. This is reflected through his cutting of positions including Citigroup, HCA Healthcare and Block.