Pershing Square is the largest holder, nearly 10%, of The Howard Hughes Corporation (HHC). Why would we be interested in an update on HHC? Well, of the four master planned communities it owns, one is The Woodlands. The Woodlands is a suburb of Houston, they also own another in the Houston area, I believe. But The Woodlands is especially interesting…and not just because I live close by.
I could be very clever in how I revealed this to you but instead I’ll just say it: Among the major corporations that have a large footprint in The Woodlands are Baker Hughes (BHI) and Anadarko Petroleum (APC) but I assure you the list in the oil patch goes on. In fact, Exxon Mobile (XOM) is moving it’s world headquarters about a stone throw’s away from The Woodlands (Probably because there wasn’t enough land IN The Woodlands to build it there). Interested yet?
I’d like to hear Ackman’s thoughts on Texas real estate. The Howard Hughes Corporation corporate headquarters also happen to be located in Dallas. One would think he could offer a perspective of the economic climate and if the oil bust will hurt Texas like it did in the 1980’s. This seems more relevant to me than backslapping over a company that was a trading vehicle for traders as most of us have never even seen an Herbalife supplement in person. Conversely, we’ve all read and seen the concerns over what lower oil could do to the economy in Texas and elsewhere. Does Bill agree?
HHC is now about 25% off its all-time highs and just above its 52-wk low so Ackman may not be in the mood to discuss it. But if you look at the performance over the past five years my guess is that Ackman and his investors are still making out quite well. So this recent pullback, one probably caused by the street sniffing out what I just noted above, is nothing to poke him about, Pershing has done quite well here. HHC is a well run company and has likely been one of his show ponies for a number a years. This could be a buying opportunity in HHC, I’m not sure there’s that many are interested in shorting HLF NOW that’s its gone from 80 to 30.
I’d honestly like to know what he thinks of the current economic climate where HHC does business, whether it be Texas, Nevada, Maryland or all points in between. Is he concerned about HHC’s exposure in Texas? Does he think housing is headed to another overall collapse? Is HHC seeing a slowdown in commercial development? These questions seem more pertinent today then say slide 67 of his Herbalife presentation or whether or not he thinks MCD can be spun into a REIT. Anyone else interested or is it just me?