Hedge fund manager Bill Ackman / Facebook
Bill Ackman, the billionaire activist investor who runs Pershing Square Capital, is high on the Tel Aviv Stock Exchange, singing its praises. Ackman and his wife Neri Oxman acquired a 5% stake in the exchange in January. And Bill Ackman has placed 37% of Pershing’s more than $10 billion of assets in just two companies: Alphabet (19%), the parent company of Google and Chipotle Mexican Grill (18%).
That’s right! Bill Ackman puts as much faith in a fast food chain as he does in Google.
Well, Yahoo reported that in the fourth quarter of 2023, Chipotle’s revenue increased 15% to $2.5 billion, operating margin expanded 80 basis points to 14.4%, and non-GAAP net income soared 25% to $10.36 per diluted share. The driving force behind that success was strong same-store sales growth of 8.4% driven by pricing power and a 7.4% increase in foot traffic.
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“Those numbers are truly impressive in context,” said Yahoo. “The average restaurant saw same-store sales increase just 1.1% in December, while customer traffic actually declined 1.7%, according to the National Restaurant Association. That means Chipotle brought more people in the door while the average competitor lost business, something the company does on a regular basis. That is a testament to the brand authority Chipotle has cultivated through its “food with integrity” strategy.”
The best businesses in the world are capital-light franchises which own the right to collect royalties on a compounding base of assets. TASE is a unique non-disruptible franchise in one of the most entrepreneurial economies in the world.
As for the TASE, Bill Ackman took to Twitter to acclaim it calling it, “a royalty on the growth of Startup Nation [Israel] available at a bargain price because of the war [in Gaza] and associated uncertainty.”
So, Bill Ackman is basically saying that the TASE is currently undervalued because of Israel’s current security woes so now would be a good time to invest in it.
Ackman went on to say that he was “very impressed with [TASE] management, their business plan and their technological capabilities.
As for his 5% stake in the TASE, Bill Ackman said that he and his wife wanted to buy more but “that’s all they had available for sale” and that they “view TASE as a permanent holding.”
Bill Ackman is the founder and CEO of Pershing Square Capital Management, a hedge fund management company. He’s known for his activist investing approach, which involves taking large stakes in companies and pushing for changes in their management or strategies.
