The Howard Hughes Corporation (HHC) owns, manages, and develops commercial, residential, and hospitality operating properties in the United States. It operates through three segments: Operating Assets, Master Planned Communities, and Strategic Developments.
HHC has been in the news lately as they announced a 2 million share public offering of the company’s common stock at $50 on March 27, 2020. Along with that news, they announced a 10 million share private placement with Pershing Square International Ltd. The aggregate value of the net proceeds is $488 million.
That placement increased the number of shares that Bill Ackman’s Pershing is holding from just over 2 million to over 12 million. That investment was followed by a call from Bill Ackman to President Trump to work on the passage of the biggest-ever infrastructure spending bill. Of course, that places HHC in a great place as one of the nation’s largest real estate development companies in the U.S.
After falling from $130 to below $40, the price made a strong rally off of its March 23 low. The move attracted significant volume as the price rallied to around $60. The price has since pulled back to near $45 as volume slipped below the 20-day average on Thursday. As the price decline appears to be decelerating, it looks poised to advance.
Action to Take: HHC is a long opportunity with a target of $70. The price target is based on the 38.2% retracement level of the sell-off in February and March.