Ackman Places Bets on Visa, Mastercard, and More Amid Inflation Fears
Bill Ackman's Pershing Square Capital Management has disclosed six new positions, including four financial stocks. The quartet consists of payment card titans Visa (NYSE:V) and Mastercard (NYSE:MA), data and analysis specialist S&P Global (NYSE:SPGI), and securities market operator Intercontinental Exchange (ICE).
Ackman's enthusiasm for these companies is rooted in their 'capital-light toll taker' business model, where they facilitate transactions without assuming any risk. This setup allows them to earn small fees from every transaction.
He also highlighted the pair's inflation-resistant nature, as higher consumer prices translate into increased revenue for both Visa and Mastercard. Additionally, Ackman praised their value-added services, such as fraud detection and authentication solutions, which contribute significantly to their operations.
Pershing Square has a long history with S&P Global, having previously owned the company in 2017. Ackman expressed admiration for its three dominant businesses: ratings, indexes, and Platts. These segments generate revenue from credit ratings, securities market gauges (including the benchmark S&P 500 index), and price reporting agency services for commodities and energy markets.
Intercontinental Exchange is another key holding, with a dominant position in futures and options exchanges. Its gold-standard ICE Brent Futures contract is widely used for crude oil trading worldwide. The company also has high-margin businesses in fixed income and data services, as well as mortgage technology segments.