Bill Ackman Adds Netflix, Visa, and Mastercard to Pershing Square Portfolio
Key Takeaways
- •Pershing Square's latest 13-F filing reveals new positions in Netflix valued at $934 million, with Visa and Mastercard each at roughly $1.1 billion, within a concentrated 14-stock portfolio.
- •Pershing Square has produced cumulative net gains of 2,644% since its January 2004 launch, averaging about 16% annually compared with the stock market's 11% over the same period.
- •Netflix shares have fallen about 32% over the past year and traded near $79.84, roughly 21% below GuruFocus's estimated intrinsic value of $101.08, despite a GF Score of 90 and more than 300 million global subscribers.
- •Visa and Mastercard both trade at a P/E ratio of 33 and have each delivered average annual gains of about 22% over the past 15 years, though Visa rose 17% over the past year while Mastercard gained just 1.6%.
- •Crypto and potential regulatory scrutiny are identified as risks to Visa and Mastercard given their dominant positions in global electronic payments.
Bill Ackman, founder and CEO of Pershing Square Capital Management, has made one of his biggest portfolio changes in years. His latest 13-F filing shows that he added Netflix, Visa, and Mastercard to a concentrated portfolio of just 14 stocks.
Pershing Square has delivered cumulative net gains of 2,644% since launching in January 2004. That works out to an average annual return of about 16%, compared with the stock market’s 11% average over the same period.
The fund’s largest positions include Uber at $2.5 billion, Microsoft at $2.3 billion, and Amazon at $2.0 billion. Netflix has a market value of $934 million, while Visa and Mastercard each sit at around $1.1 billion.
Ackman is known for buying stocks he sees as undervalued and holding them long term, and that approach appears to be behind the three new positions. The additions also place him in businesses with very different operating models: Netflix relies on subscriber growth and content monetization, while Visa and Mastercard sit at the center of global card-based payments.
Netflix: Down 32%, but still seen as undervalued
Netflix shares have fallen about 32% over the past year. The stock’s current price-to-earnings ratio is 26, below its five-year average of 36.
According to GuruFocus, Netflix has a GF Score of 90 out of 100, with perfect marks for profitability and growth. Its estimated intrinsic value is $101.08, compared with a recent trading price near $79.84, suggesting the stock may be trading at a 21% discount.
The company has more than 300 million subscribers globally and continues to expand internationally. It has also introduced ad-supported subscription tiers to broaden its revenue base, an important detail for investors watching how streaming companies balance growth with monetization.
Despite those fundamentals, the stock’s momentum score is just 2 out of 10, indicating near-term pressure. Insider selling has also exceeded $49 million over the past three months.
Visa and Mastercard: Large payment networks facing new risks
Visa trades at a P/E ratio of 33, close to its five-year average of 32. The stock is up 17% over the past year and has averaged annual gains of nearly 22% over the past 15 years.
Mastercard also trades at a P/E ratio of 33, slightly below its five-year average of 37. Its 15-year average annual return matches Visa at 22%, although it is up just 1.6% over the past year.
Both companies process a large share of global electronic payments and are often viewed as long-term growers as more financial activity moves online. Their scale also means any shifts in payment rails, regulation, or consumer payment preferences can attract close attention from the market.
Crypto is identified as a risk to both firms. Regulators may also increase scrutiny given the two companies’ dominant positions in the payments industry.
Ackman’s net worth recently reached $8.9 billion, according to Forbes.
