Canadian Pacific Steals the Heart of a Huge Hedge Fund

A Canadian Pacific Railways (NYSE:CP) SEC filing disclosed that billionaire Bill Ackman’s Pershing Square hedge fund has grabbed a 12.2 percent stake in the company.

In the filing, the hedge fund states that Canadian Pacific’s (NYSE:CP) shares are “undervalued and are an attractive investment; ” however, the filing doesn’t include language suggesting a takeover interest by the fund. Ackman did note that he expects to conduct talks with a number of parties including Canadian Pacific’s management, board and shareholders and “other relevant parties” about the railroad’s future business and finances.

The hedge fund has been building its stake in Canadian Pacific (NYSE:CP) since last September. The filing disclosed that the fund has spent $1.07 billion for nearly 20.7 million shares, including nearly 2.7 million shares of call options.

Canadian Pacific’s stock is up 4.31% to $64.57 on the news. Shares are down 0.37% year to date. The stock has traded in a 52-week range between $44.74 and $69.92.

If the economy indeed avoids a collapse, here are other top rail stocks hedge funds will be watching: Norfolk Southern Corporation (NYSE:NSC), CSX Corporation(NYSE:CSX), Kansas City Southern (NYSE:KSU), Union Pacific Corporation (NYSE:UNP), Providence & Worcester Railroad Co. (NASDAQ:PWX), and Canadian National Railway (NYSE:CNI).

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