12-month performance: -54% Insider activity: Bullish Buying pattern: Large purchase from 10% owner hedge fund Recent news: Raised capital
The Howard Hughes Corporation is an American real estate company that owns, manages, and develops commercial, residential, and mixed-use property. Its portfolio is strategically positioned to meet and accelerate development based on market demand, with the goal of generating sustainable, long-term growth and value for shareholders. The company is listed on the New York Stock Exchange and currently has a market capitalisation of $2.8 billion.
Like most real estate companies, Howard Hughes has experienced a significant level of disruption over the last few months. As a result of the coronavirus outbreak, the company has been forced to delay construction projects and reduce its workforce. However, the group has taken steps to ensure that it can survive a near-term economic slowdown. For example, in late March, the company shored up its balance sheet by selling two million common shares to the public at $50 per share, while also selling 10 million shares at $50 per share in a private placement.
Source: 2iQ Research
What stands out to us here is that it was Pershing Square Capital Management, the New York hedge fund run by Bill Ackman, that purchased the 10 million shares in the recent private placement. Ackman is also Chairman of the Board at Howard Hughes, so he is likely to have a very good understanding of the real estate company. This recent $500 million purchase from Ackman has boosted his stake in the company from 15% to 30%, which suggests the insider is confident about Howard Hughes’ future prospects. It’s also worth noting that four other insiders purchased HHL stock in late March, including CEO Paul Layne, who acquired an additional 4,040 shares. Overall, we see the recent pattern of insider buying as a bullish signal.
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