Pershing Square Capital Management, a major holder at The Howard Hughes Company (HHC), recently added another 1,560,205 shares. The buy increased the fund’s stake by just over $109 million, an increase of 11 percent.
The fund was also the last buyer of shares, picking up about 150,000 shares back in September 2021. Back then, they paid about $13.8 million for a position that’s now down nearly 20 percent. Other company insiders have been fairly quiet this year.
Overall, company insiders own 0.9 percent of shares, and institutions like Pershing Square account for 96 percent of outstanding stock.
Shares of the real estate development company are down 17 percent in the past year, as rising interest rates are leading to a slowdown in activity for the sector, from lending to new construction.
However, the company owns a large mix of land assets and is still coming off a strong year, with revenues up 191 percent, and earnings up over 2,500 percent.
Action to take: Investors may like shares for the long haul, as it may take some time for the real estate market to turn around. At present, the company doesn’t pay a dividend.
For traders, shares have been trending higher over the past few weeks. That move is likely to continue. The April 2023 $85 calls, last carrying a bid/ask spread around $3.50, could deliver mid-to-high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.