Billionaire hedge fund manager Bill Ackman thinks quality stocks are still cheap even though the market recently printed fresh all-time highs.
In a new CNBC interview, the founder and CEO of Pershing Square Capital Management says his firm recently raised $5 billion and is actively deploying that capital, with about 35% already deployed.
“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 notes that “every company is an AI company today.”
“The key is, is AI going to disrupt to or is AI going to enhance your business?”
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