Billionaire hedge fund manager Bill Ackman thinks quality stocks are still cheap, even as the market recently set new all-time highs.
In a new CNBC interviewsays the founder and CEO of Pershing Square Capital Management that his company recently raised $5 billion and is actively deploying that capital, with about 35% already deployed.
“Interestingly, I think stocks, the companies we like, are still quite cheap despite the overall market movement. When people compare market multiples, today we might be somewhere in the low 20s, 20 to 21 times earnings, something like this. And while the market has averaged 16 to 17 times higher historically, the average company of 20 years ago is very different from the average company of today.
These are market capitalization weighted indices. In the past, very large companies could not grow so quickly. Now the largest companies are among the fastest growing, high quality companies in the world, so the mix of the market is much higher quality companies, much faster growing and much better companies, so if you pay a low twenty cents based on the total market it can be cheap.”
Ackman also notes that “every company today is an AI company.”
“The key is: will AI disrupt or improve your business?”
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