Billionaire Hedge Fund Manager Bill Ackman Believes Quality Stocks are Still Undervalued

In a recent interview on CNBC, billionaire hedge fund manager Bill Ackman shared his perspective on the current state of the market. Despite reaching new all-time highs, Ackman believes that quality stocks are still undervalued.

As the founder and CEO of Pershing Square Capital Management, Ackman revealed that his firm recently raised $5 billion and is actively deploying that capital. Approximately 35% of the raised funds have already been invested.

During the interview, Ackman stated, “Interestingly, despite the overall market move, I think stocks – the companies we like – are still pretty cheap. When people compare market multiples, today we’re maybe something in the low 20s, 20-21 times earnings, something like this. And while the market averages 16-17 times in history, the average company of 20 years ago is very different than the average company of today.

These are market-cap weighted indices. It used to be really big companies couldn’t grow very quickly. Now the biggest companies are among the fastest-growing high-quality businesses in the world, so the mix of the market is much higher-quality, much faster-growing, much better businesses, so if you’re paying a low 20s multiple on an overall-market basis, it can be cheap.”

Ackman also highlighted the significance of AI in today’s business landscape, stating that “every company is an AI company today.” He emphasized the importance of understanding whether AI will disrupt or enhance a business.

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