Bill Ackman said Pershing Square Capital Management LP, his hedge-fund operator, owns about 15 percent of Fortune Brands Home & Security Inc. and recommended investors buy the shares.
Fortune Brands Home & Security added 5.5 percent to $14.48 at 4 p.m. New York time after advancing as much as 11 percent. It may reach $27 should the U.S. housing market stage a full recovery, according to Pershing Square’s analysis.
“In order for this to be a very attractive investment, the housing market has to partially recover in five years,” Ackman said at the Value Investing Congress in New York today. “That’s a very conservative assumption,” Ackman said.
Beam Inc., formerly known as Fortune Brands Inc., spun off the company this month.
Homebuilders in the U.S. were less pessimistic than forecast in October as near record-low borrowing costs and price decreases raised hopes the market will improve in the next six months. The National Association of Home Builders/Wells Fargo sentiment index climbed to 18, the highest level since May 2010, from 14 in the prior month, data from the Washington-based group showed today.